ECJ Case Note: The European Court of Justice upholds the principle of the so-called ‘crown jewels’ of sport in the recent FIFA and UEFA cases by Prof. Ian Blackshaw

ECJ Case Note:  The European Court of Justice upholds the principle of the so-called ‘crown jewels’ of sport in the recent FIFA and UEFA cases

by Prof. Ian Blackshaw

 

The commercialisation and marketing of sport, which includes sports sponsorship, merchandising, endorsement of products and services, and corporate hospitality, is big business globally and also in Europe. Perhaps the most important and lucrative side of sports marketing is the sale and exploitation of sports broadcasting rights around the world, which contribute mega sums to many sports and sports events, including the FIFA World Cup and the UEFA European Championship. Indeed, without the mega sums contributed from the exploitation of sports TV rights, many major sports events could not be organised and staged, much to the disappointment of sports persons and fans worldwide.

 

The commercialisation of sports broadcasting rights may, therefore, be considered as the ‘oxygen of sport’. There is a symbiotic relationship between sport and TV broadcasting and, according to David Griffith-Jones, QC: “This marriage between sport and television is one made in heaven.”[1] And as far as Professor Richard Parrish is concerned: “The broadcasting sector and sport have……revolutionised each other.”[2]

 

The significance of new technology – especially broadband and quicker access to the Internet – in the development and financial importance of sports broadcasting rights cannot be over emphasised as Richard Verow, Clive Lawrence and Peter McCormick rightly point out:

 

“In many ways, the rise of new platforms for the dissemination of media products and the inevitable rise of sport as the global media property it now is have been intertwined. Just as the formation of the FA Premier League and the rise of satellite pay television through BSkyB seemed inextricably linked, so when new platforms, such as the proliferation of digital television channels or the exploitation for broadcast or quasi broadcast purposes of internet and mobile telephony platforms, come to the fore, their usual test bed in terms of content is in sport..”[3]

 

According to the media magnate, Rupert Murdoch, sport is the “battering ram and a lead offering in all our pay television operations”.[4] In fact, the UK Government has just approved (3 March, 2011) the proposed takeover by Murdoch’s News Corporation of BSkyB, which has a very significant amount of sports content, including the English FA Premier League live matches, for which it paid £1.782 billion for the 2010-2013 Seasons.

 

Against this background, on 17 February, 2011, the General Court (formerly the Court of First Instance) (Seventh Chamber) of the European Court of Justice (ECJ) handed down two landmark Judgements in the so-called ‘Crown Jewels’ cases brought by FIFA, the World Governing Body of Football, and UEFA, the European Governing Body of Football.

The case turned on the interpretation and application of Article 3a of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (OJ 1989 L 298, p. 23), as inserted by Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 amending [Directive 89/552] (OJ 1997 L 202, p. 60), generally known in shorthand, as ‘The Television Without Frontiers’ Directive.

Para. 1 of this Article provides as follows:

“1.      Each Member State may take measures in accordance with Community law to ensure that broadcasters under its jurisdiction do not broadcast on an exclusive basis events which are regarded by that Member State as being of major importance for society in such a way as to deprive a substantial proportion of the public in that Member State of the possibility of following such events via live coverage or deferred coverage on free television. If it does so, the Member State concerned shall draw up a list of designated events, national or non-national, which it considers to be of major importance for society. It shall do so in a clear and transparent manner in due and effective time. In so doing the Member State concerned shall also determine whether these events should be available via whole or partial live coverage, or where necessary or appropriate for objective reasons in the public interest, whole or partial deferred coverage.”

In the present cases, The United Kingdom and the Belgian Governments had decided to list all the FIFA World Cup matches and the UEFA European Championship as sporting events considered to be of “major importance for society” and should, therefore, be shown on ‘free-to-air’ television. The effect of these listings was to preclude these sports events from being sold exclusively to subscription and ‘pay-per-view’ channels.

 

FIFA and UEFA argued that the listing of these events, which are money-spinners for them, as ‘free-to-air’ under ‘The Television Without Frontiers Directive’ restricted their bargaining rights with TV companies for football content, which is much and widely in demand, and were contrary to EU Law, in particular, the Competition Rules under the renumbered articles 101 & 102 of the Lisbon Treaty.

 

The ECJ held that the World Cup and the European Championship were single sporting events and could not, therefore, be divided up (known, in the jargon, as ‘siphoning off’) at the will of FIFA and UEFA. In other words, a ‘pick and mix’ approach could not be followed. The Court also held that the Governmental measures, taken after full public consultation, to list these events as ones to be broadcast on ‘free-to-air’ television were proportionate and served the public interest; and, moreover, did not go any further than was necessary to attain that objective. In other words, they were not anti-competitive and, therefore, compatible with EU Law.

 

Not unnaturally, FIFA and UEFA were “disappointed” with these Rulings, and they are considering whether to appeal against them. They have two months in which to do so.

 

As mentioned in the Editorial of this issue of GSLTR, a full analysis of the legal arguments presented by FIFA and UEFA in these important Cases and the legal grounds on which the Rulings of the ECJ are based will be included in the June issue of GSLTR.

 

So, as they say: watch this space!



[1] Griffith-Jones, D., ‘Law and the Business of Sport’, 1997, London, Butterworth and Co, at p 289.

[2] Parrish, Richard, ‘Sports law and policy in the European Union’, 2003, Manchester and New York, Manchester University Press at p 11.

[3] Verow, Richard, Lawrence, Clive, McCormick, Peter, ‘Sports Business’, Second Edition, 2005, Bristol, Jordan Publishing Limited, at p 321.

[4] Address by Rupert Murdoch at the News Corporation AGM on 15 October, 1996.