Access to live sports coverage in the digital media landscape: has media law become redundant?
by Katrien Lefever
24/7 access to sports coverage
The last decade, the media sector has changed fundamentally. In the past, sports fans could only watch sports events at the venue or on a traditional television set in their living room or in a pub. Technological developments, however, have greatly affected the way how sports fans could be informed about sports events. During the day, fans can consult highlights on websites, receive news alerts or pictures on their mobile phone, and listen to downloaded podcasts with the most recent sports news. In the evening, they can watch the live game on their television set at home. As a result, the public can now be informed about sports events “24/7”, accessible at any place and time that suits them. Furthermore, the digitalisation process has drastically lowered the cost of content production. Every sports fan now has the opportunity to become content producer.
When dealing with the public’s access to live sports coverage, both media and competition law play an important role. However, due to the recent changes in the media landscape, the relevance of media law has been questioned. For example, the digital media environment has provided the public with the opportunity to decide where, when and through which means they will watch (sports) content, while in the analogue past, the professional media decided which programmes and when they would be broadcast. As a result, some authors have been arguing that this shift from one-to-many to many-to-many communication undermined the ratio legis of media regulation. According to them, the basic principle of media regulation, i.e. spectrum scarcity and one-way selection of information at the level of traditional broadcasters could no longer be upheld in the new media landscape. Hence, due to the increased participation of the public in creating and distributing content, government intervention in the broadcasting sector to guarantee the public’s right to information would no longer be justified. Additionally, it was often argued that the regulation of the broadcasting market could be left to competition law. In this article, it will be analysed whether competition law is indeed the right legal instrument to ensure the public’s access to live sports coverage in the new media environment.
Economic and societal dimension of sport
Sport is characterised by a dual nature: sport embraces both an economic and a societal dimension. Over the years, the sports sector has transformed into an important economic activity. The cost of becoming an official sponsor of a team or of major sports events is higher than ever before, the value of sports broadcasting rights has increased sharply and the same goes for the transfer fees and salaries of professional athletes. However, sport is more than big business. Sport is also characterised by a societal dimension fulfilling an important role in our society. The European Court of Justice, for example, emphasised that sporting activities, and in particular football, are of “considerable social importance”. In particular, it has been recognized that sport has a significant social role to play in our society in bringing people together and contributing to social cohesion. Instead of watching major sports events alone, everybody is gathered around the television set at home or in the pub and after winning an important game people come out into the streets and celebrate the victory together. Furthermore, sports events stimulate conversations for days after the event with friends, at the office and even with strangers. However, as indicated by different authors, a necessary precondition for the achievement of these social goals is that sport would be available and affordable to all citizens.
Exclusive sale of sports broadcasting rights
The interests of actors of the sports sector are often opposed to the interest of the public. Sports organisations sell their broadcasting rights for a high price to media companies. If a pay-television operator is willing to pay a huge amount of money for exclusive sports broadcasting rights, sports organisations will probably accept that offer. However, the public’s main interest is to have access to sports coverage on television, preferably for free or for a very low price. Given that a part of the public is not keen on or not able to pay extra for a subscription to a pay-television channel, a part of the public will be denied access to this content if the exclusive rights are awarded to pay-television broadcasters.
In the past, such exclusive contracts were accepted commercial practices. Such deals were often seen as crucial to protect the value of the broadcasting rights for both the sports organisations and the broadcasters. Nevertheless, concerns have arisen about the negative effects those exclusive contracts could have on the public and new media operators not having enough financial resources to buy exclusive broadcasting rights. As a result, competition authorities and media legislators have intervened and imposed conditions on the selling and exploitation of sports broadcasting rights.
Media law versus competition law
In order to guarantee free-to-air access to live and full sports coverage on television, the European legislator introduced the “list of major events” mechanism. In the past, important sports events, such as the Olympic Games or FIFA World Cup, could be watched on free-to-air television. In the early 90’s, concerns have arisen that the broadcasting rights of these sports events would be bought by pay-television broadcasters and, thus, would disappear behind a decoder. Households unable or unwilling to pay an extra subscription fee could be deprived of access to those important events endangering their right to information. Given that sport can only create a shared experience when a large number of people watches the sports event, the European legislator decided to intervene and allowed Member States to draft a list of events of major importance that could only be broadcast in an exclusive way on free-to-air television. The regulation of the broadcasting sector and the access to live sports coverage could only be left to competition law, if competition authorities, when dealing with the sale and exploitation of sports broadcasting rights, could take into account the public’s access to live sport on television. Unfortunately, different decisions of the European Commission and the national competition authorities have indicated that competition law is not the right tool in order to protect this objective.
In the past, sports associations sold their broadcasting rights in one large exclusive contract to a single broadcaster. This mechanism is better known as the joint selling practice. Over the last few years, the European Commission has accepted several agreements concerning the joint selling of sports broadcasting rights under the European antitrust rules, albeit with strings attached. While recognising that this practice leads to efficiency gains, the European Commission indicated that this practice constitutes a restriction of competition under article 101 (1) of the TFEU. Given that joint selling agreements could foreclose the market and, thus, limit viewers’ choice, the European Commission intervened and the joint selling bodies amended their joint selling agreements. For example, broadcasting rights can only be sold via an open tender procedure and the duration of the contracts is limited to maximum three seasons. Furthermore, the broadcasting rights should be sold in different smaller packages order to give new media operators, such as internet and mobile operators, the opportunity to buy rights. In the UEFA Champions League case, German Bundesliga case and FA Premier League case, the European Commission decided that the amended joint selling agreement could be exempted under article 101 (3) of the TFEU, because new media operators as well as viewers benefit from such agreements. In the press releases coinciding the three decisions, it was stressed that the amended agreements offer sports fans greater choice. For example, the European Commission emphasised that “applying the competition rules to sport ensures that the interests of both fans and leagues are fairly balanced”. However, when we take a closer look at these decisions, it can be concluded that the European Commission, when exempting those agreements, takes into account the public’s benefits, particularly its choice, but it does not explicitly refer to the public’s access to sports events on free-to-air television. In fact, the European Commission only alluded to the general assumption that guaranteeing competition in the upstream market will ultimately result in benefits for the public. Hence, as indicated in the Study on the Lisbon Treaty and EU Sports Policy, it seems that the exemption decisions were made with reference to the economic exemption criteria established in article 101 (3) of the TFEU and not to wider social-cultural concerns. However, national competition authorities have used antitrust rules as an instrument to foster competition while taking into account the public’s right to information with regard to sports events. The German Competition Authority’s decision of 2008 stating that the highlights of the national premier league should be broadcast before 8 p.m. can be considered as an interesting example of the application of a more explicit citizen-orientated approach. The same goes for the 2005 Belgian Competition Council decision in which it attached high value to the principle that the public could see at least one live match on free-to-air television.
Competition authorities have also influenced the way sports broadcasting rights are exploited by imposing must-offer obligations. In practice, the must-offer obligation requires vertically integrated companies active as a pay-television operator as well as a distributor to offer, at wholesale or retail basis, sports content to competitors. Technological convergence has triggered a wave of horizontal and vertical concentration. A problem could rise where a mergerd entity owns a portfolio of premium sports content being necessary to attract subscribers and, thus, forecloses third parties’ access to this content. Furthermore, viewers wishing to have access to specific sports content are forced to subscribe to one specific platform at the (high) price established by that platform operator. In order to further the interests of the public and to give new media operators chances to enter the market, competition authorities have imposed must-offer obligations on the vertically integrated companies holding exclusive broadcasting rights of premium content. Although one should realise that the imposition of this obligation is a very intrusive measure, Harbord and Ottaviani stressed that the competitive advantage of the industry leader is reduced, but that the additional surplus is captured by the public. However, just as in the three European joint selling agreement decisions, in the must-offer decisions, the viewer is especially seen in its role as consumer, focussing on its economic interests (price, choice etc.) and not on its free access to live coverage on free-to-air television.
Old habits die hard
Not only these decisions indicate that media law is still needed in order to guarantee the public’s access to sports events. Even practice indicates that the concerns about access to sport content in the digital media environment remain valid. In the past, it has often been argued that internet would kill traditional television and, thus, that old media would be replaced by new media. However, different studies have indicated that traditional television consumption has even increased over the years and, thus, still remains the most important source of information. Furthermore, television is about shared emotions in familiar surroundings, whereas internet is about individual media consumption. And practice shows that people prefer watching sports events with their friends instead of alone. Although the digital media landscape offers a lot of opportunities, the public sticks to its old habits. Or as stated by Berte: e.a.: “[t]he saying ‘old habits die hard’, can clearly be applied to watching television”. Furthermore, Internet has offered the public and the fans the opportunity to become both producer and receiver of information and content. The precondition for this shift is that sports fans are allowed to film during sports events and upload this content. At first sight, it seems that the evolution from one-to-many to many-to-many communication has offered the fans access to a plenitude of sports coverage and sports information. However, terms and conditions of different football teams and sports organisations contain the prohibition for ticket holders to bring recording material into the stadium. Additionally, in June 2011, it was announced that Apple is developing software to stop iPhone users from filming live events, such as sports events or concerts, with their smartphone. Such new evolutions limit the fans’ ability to become legitimate providers of online sports content. Given that traditional, linear television remains an important source of access to sports content, it could be dangerous, as indicated by Helberger, that regulatory policy will jump from one extreme to the other and, thus, to conclude that media regulation would no longer be needed. In other words, even in the internet era, the basic principles and foundations of media law have not become redundant and media regulation is still needed to guarantee access to important and diverse content.
A never ending story…
One should realize that the debate about the selling and exploitation of sports broadcasting rights has not come to an end. In October 2011, the Court of Justice put a (little) bomb under the principle of territorial exclusivity. In June 2012, the Advocate General decided that the limitation of the compensation payable by a television channel for the use of short extracts of high-interest events to the public, such as football matches, is justified. It is now up to the Court of Justice to (not) follow this advice. As you can see: sport and television: “it’s a never ending story”.
 Legal councel at the Vlaamse Media Maatschappij (VMMa)
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