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The Premier League’s geographic restrictions on broadcasters such as British Sky Broadcasting Group Plc (BSY) showing its soccer matches breach European Union antitrust rules, the bloc’s highest court said in a ruling that may still limit what pub and bar owners can show customers.
The EU Court of Justice in Luxembourg ruled that territorial licenses are “contrary” to competition law “if the license agreements prohibit the supply of decoder cards to television viewers who wish to watch the broadcasts.” While the court said anyone can watch such broadcasts, pubs can’t show the feeds via foreign decoder cards without the permission of the copyright owner, such as the broadcasters and the league.
The Premier League, home to some of Europe’s most successful clubs including Manchester United and Liverpool, started a three-year 1.8 billion-pound ($2.8 billion) U.K. television contract in August 2010, and receives a further 1.4 billion pounds from the sale of international broadcast rights. The ruling offers something for the league and the U.K. pub owner who tried to show local matches from a Greek provider.
“On one hand now it’s very blunt and very clear that absolute territorial restrictions on how right holders license their exclusive rights are not permitted,” said Daniel Geey, a lawyer at Field Fisher Waterhouse LLP in London. “The Premier League will get some comfort that the actual feed that goes out, which does contain copyrighted aspects, cannot be shown without the right holder’s permission.”
Red, White and Blue Pub
The EU court case was triggered by two cases pending at the U.K. High Court. In one, Karen Murphy, the owner of the Red, White and Blue Pub in Southsea, England, faces a criminal lawsuit after buying a decoder card that allows her to show league games from Greek television. BSkyB, the U.K.’s biggest pay-TV operator, said the cards are “illicit” because they’re being used outside their specified area.
The current system is “not a fair, free choice,” said Murphy today in an interview with British Broadcasting Corp., adding she paid about 800 pounds a year for the Greek service compared with the 700 pounds a month that a Sky package would have cost. Sky and the league would “do anything, obviously, to protect their income.”
Audio-Visual Rights
The Premier League said that the judgment “makes it clear that the screening in a pub of football-match broadcasts containing protected works requires the Premier League’s authorization.”
“The Premier League will continue to sell its audio-visual rights in a way that best meets the needs of our fans across Europe and the broadcast markets that serve them but is also compatible with European Law,” the top U.K. soccer organization said in an e-mailed statement.
BSkyB spokesman Robert Fraser declined to immediately comment. Shares of the Isleworth, England-based company fell as much as 4.3 percent after the ruling before recovering. Shares closed down 2.7 percent at 239 pence in London trading. Sky Deutschland AG fell 7.9 percent to 1.631 euros in Frankfurt.
“This could drive a coach and horses through Sky’s business model for broadcasting of Premier League matches,” said Stuart Adams, a partner at law firm Rouse.
“This is going to lead to more football on the telly for fans to watch, and less money for clubs to lavish on the salaries of their top players,” said Adams. “That will please most fans. But it will also lead to smaller clubs going out of business which is not good news for fans at all.”
In the future, the Premier League may end up selling to BSkyB, which could then market it across Europe, said Guy Bisson, an analyst at IHS Screen Digest in London.
Pan-European Right
“Sky would bid for it as a pan-European right and then, through this ruling, sell it in all EU markets,” he said. “It may raise awareness for some people in England who want to get it cheaper, but do they really want a Polish-language pay-TV package?”
The court’s ruling “strikes at the heart of the business model that many an industry is built on -- particularly the broadcasting and entertainment industries,” said Tom Scourfield, a partner at law firm CMS Cameron McKenna LLP, who specializes in intellectual property and media law.
“Is this good news for consumers? Possibly so, if it involves greater choice in the market, but the true issue is the value of those rights and how they are distributed,” said Scourfield.
Copyright-Protected Material
Even if a U.K. bar showed a feed of a soccer match via a Greek broadcaster’s decoder card, without any of the copyright- protected aspects, such as the credits, there would still be the broadcaster’s logo on the screen.“Practically, the feed comes with copyright-protected material” and “ it would be very difficult to separate the two,” Geey said in a telephone interview. “It will be interesting to see how the English court reconciles those two issues.”
While today’s case mainly focused on the use by pubs in the U.K. of Greek satellite decoder cards to show Premier League games, “there now seems to be little to stop individual members of the public from appropriately acquiring cheap EU decoder cards from Greece or another EU country and watching the games in their homes,” said Graham Shear, a partner in the litigation department of Berwin Leighton Paisner LLP in London.
The cases are: C-403/08, Football Association Premier League Ltd, v. QC Leisure and C-429/08, Karen Murphy v. Media Protection Services Limited.
Report from Bloomberg.com
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