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UK free to draw up list of sports events for broadcast on 'free-to-air' TV, says EU court adviser

Out-Law News | 13 Dec 2012 | 5:01 pm | 5 min. read

Sports governing bodies will challenge the "importance" that EU member states place on restricting the sale of broadcast rights for some sports events but will find it hard to win their case if the EU's top court backs the views taken by an adviser, an expert has said.

Earlier this week an Advocate General (AG) to the Court of Justice of the European Union (CJEU) said that the UK and other EU member states should be free to determine the sporting events they think should be broadcast on free-to-air television.

AG Jääskinen urged the CJEU to reject claims by football governing bodies FIFA and UEFA that it is an infringement of their rights to property to place restrictions on how they can sell broadcast rights to all matches contested in the World Cup and European Championship finals respectively.

Jääskinen said that it is "justified and, therefore, proportionate" under EU law for member states to restrict the way some sports events can be broadcast as long as those countries comply with conditions set out in those laws. Advocate General opinions are not binding on the CJEU but are often followed in the final judgment.

Under EU television broadcasting laws, member states can elect to prevent broadcasters from showing "on an exclusive basis" any events that they consider to be "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 a member state chooses to place such restrictions on broadcasters it must form a list of the "designated events ... which it considers to be of major importance for society ... in a clear and transparent manner in due and effective time ... [and] 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".

Member states are required to notify the European Commission about the restrictions it wishes to impose, whilst the Commission is charged with verifying that the measures taken are compliant with EU law.

FIFA and UEFA have argued that the UK and Belgium should not be able to prevent all the matches in the World Cup and European Championships from being sold to broadcasters on an exclusive basis. In the UK 'crown jewel' events including the Open Golf Championship, the Rugby World Cup and the two major international football tournaments must be made available on free-to-air channels.

FIFA and UEFA said that the Commission was wrong to verify lists that covered all the games played at the tournaments because some games could not be considered to be important enough to society to restrict the way the matches are broadcast. However, the AG said it was his view that the Commission could not intervene unless there has been a "manifest error of assessment" or if the procedures the member states followed in drawing up their lists are flawed.

FIFA and UEFA have argued that the restrictions amount to an infringement of their right to property under the EU's Charter of Fundamental Rights. However, the Advocate General said that the CJEU should dismiss the sports governing bodies' claims. He said that there was nothing in EU law which provided the organisations with a right to exploit intellectual property rights to the fullest commercial extent when negotiating contracts with broadcasters.

"It seems to me that the European Union legislature is justified in imposing limitations or restrictions on the right to property invoked by UEFA and by FIFA, either on the basis of the fundamental rights of others, such as the right to information, or on the basis of the public interest," Jääskinen said. "Moreover, I note that the right acknowledged in the present instance is far from an essential concept of the right to property covered by protection from legislative interventions."

Sports law specialist Trevor Watkins of Pinsent Masons, the law firm behind Out-Law.com, said that it will be hard for sports governing bodies to challenge the list of protected events that member states draw up if the CJEU follows the Advocate General's opinion in its ruling.

"If a member state follows a transparent, clear and logical process in deciding what to put on its protected list of selected events for 'free to air' television and also ensures that the 'importance to society' qualification is assessed and a reasoned view taken, then it will be very hard for a sports governing body to successfully challenge that decision," Watkins said. "From a governing body perspective I would be looking closely at how a member state defines 'importance' and 'society', particularly given how the census results recently published demonstrated how society, its values, make up and views change."

"A successful challenge is made much more unlikely given that the member state is given a wide margin of appreciation in assessing whether or not an event is of 'major importance for society' – a governing body is limited to challenging the conclusion reached which, given it is for the member state to make the determination, must involve demonstrating that the member state got it clearly wrong," he added.

Watkins also said that questions remain unanswered about how the rules relating to free-to-air broadcasting of sport will be interpreted in the future with the emergence of the internet and other mediums for showing sport.

"The fast moving digitalisation of sport and the accompanying rights, technological advances and the hunger for the creation of new revenue streams makes for an increasingly complex landscape. An event may well be placed on a protected list but with the pace of change and the ability to view on multiple platforms the concept of freedom of access, currently through 'free-to-air' television will itself need to adapt and evolve if the original intention is to be properly protected in future," Watkins said.

"It is very much tied to the significant changes we are seeing as battle lines are drawn up in an attempt to control data, own technologies and consequently create and drive revenue through live sport which itself remains the ultimate 'must see as they happen' events and which cannot easily be relegated to iPlayer or Sky+,” he said.

Watkins said that it is critical to sports governing bodies that they can generate revenues from exploiting their rights in order to "underpin" investment in their sports.

"The underlying issue here is a fear on the part of rights holders that being forced to make events available on free to air lessens the amount they get paid for those rights," he said. "What is interesting, however, is the emergence of Channel 4 as a prominent sports broadcaster which in itself could further affect the bidding for rights and that other new bidders, besides the BBC and ITV, may also enter the market. It is yet possible that in time and with the development of new viewing patterns and devices the whole concept will shift and change."

"Requiring events to be shown on 'free-to-air' television can on the one hand undermine the value of broadcasting rights, but on the other hand attract a greater range of advertisers within stadiums because the matches will generally attract higher audiences," he said. "This case will re-ignite the debate over which events to have on and off the UK list pending the digital strategy review scheduled for next year. I’d also expect rights holders to also seek to challenge 'importance' particularly for events that are not iconic or part of the finals of a competition."