The Bosman ruling of TV rights - A disaster for football?
Comment: In the beginning of February the Advocate General of the European Court of Justice (ECJ) made strong statements that, if she is right, will revolutionize the future of media rights in sport, and may diminish revenues of football clubs in Europe.
In a press release on 3 February 2011, Advocate General Juliane Kokott states that according to EU laws on free movement of goods, there are no territorial restrictions in the EU when it comes to television rights.
This is a statement directly related to the ongoing case between the English Premier League and the English pub owner Karen Murphy. If this view holds good in court in June, this will be the Bosman ruling of world media!
This is the case: Karen Murphy has imported Greek decoder cards to save money on the Premier League broadcasts. This saves her more than 6000 Euro a year. Although she must bear with Greek commentators, many have followed Murphy’s example. This has made the Premier League react.
In this case two principles are in conflict: free movement of goods and services between EU countries and content producers’ right to differentiated sales of own products.
The Premier League believes that pub owners violate copyright laws, while Murphy's lawyers believe that BSkyB (who owns the TV rights) and the Premier League (supported by the La Liga, Serie A and the Bundesliga) prevent competition and act as monopolists.
Should the pub owner win, the new media market could take several paths:
1) Europe can be one single market and we get one single market price across Europe. This will lead to a loss of income for football clubs.
2) Television companies continue to sell exclusive rights to different countries, and accept a growing grey market. In the short run this will also lead to reduced revenues. In the long run, the Asian market will probably be more important than Europe. Looking at the Premier League broadcasts today, it looks almost like this is already the case. A great share of existing stadium advertising is already aimed at the Asian market.
3) The international and national sports federations and the strongest leagues establish their own TV companies and split the market into different platforms - mobile, internet, television, etc.. It will take time before this generates more money than today.
The biggest winner
The paradox of such an outcome is that it will most likely favor the largest and most powerful television channels in Europe, the channels with the largest spending power. Today, there are probably only two TV companies that can afford to buy the rights to major sports events in Europe; Canal Plus and BSkyB.
Sports organisations take power?
An alternative is that the international sports organisations such as FIFA, IOC, UEFA etc. start their own TV companies. This will give these organisations not only all power over the content of sports broadcasts, but it will also give them total power over commercial rights to these events.
Either way, a verdict in favour of Karen Murphy will affect football’s revenue (and other sports that sell exclusive rights in different countries) negatively. Most experts believe that the total media revenues will go down with such a verdict. In the longer term this will mean less money for football, and this will again influence the negotiations on a new media deal at the next crossroads.
This article first appeared on Andreas Selliaas' blog 'Sportens Uutholdelige Letthet' on 3 February 2011. Follow Andreas' blog (in Norwegian) on sportensuutholdeligeletthet.blogspot.com