Out-Law News 3 min. read
18 Mar 2014, 10:29 am
Pay-TV provider SingTel agreed an exclusive licensing deal with FIFA, the world governing body of football, over the broadcasting of matches from the World Cup later this year. The broadcaster will, however, have to agree to sub-licence the rights to some matches under terms agreed with FIFA and, in accordance with an agreement with a regulator in Singapore, allow the "cross carriage" of matches on rival channels.
The Media Development Authority (MDA) in Singapore granted SingTel, the pay-TV subsidiary of telecoms business SingNet, the permission to agree its deal with FIFA providing the broadcaster sub-licenses the right to show the opening match, semi finals and final from the World Cup to free-to-air broadcaster MediaCorp "at a mutually agreeable rate".
In addition, the MDA granted SingTel permission to provide its subscribers with access to the other World Cup matches as part of a bundled package of other content it already sells.
The regulator granted SingTel an exemption from general rules that would generally have required it to ensure that the bundled packages of content had to be cross-carried on rival StarHub's channels. Instead, the MDA has required SingTel to ensure that the standalone World Cup content it broadcasts can also be seen by StarHub subscribers.
"This represents another extension of the issues relating to the acquisition of ‘must-have’ content which crop up every time a new set of content is made available, which the broadcasters and regulators have to grapple with," said technology law expert Bryan Tan of Pinsent Masons MPillay, the Singapore joint law venture partner of Pinsent Masons, the law firm behind Out-Law.com.
The fact FIFA was keen to contract with just one broadcaster, albeit to also ensure that the exclusive licensee sub-licensed access to the opening match, semi finals and final from the World Cup to a free-to-air broadcaster, was one factor that persuaded the MDA to grant the necessary regulatory exemptions to allow SingTel to agree its contract with FIFA.
In addition, the exemption from the general cross carriage requirements was in the public interest, the regulator said.
SingTel's agreement with the MDA over the cross carriage of content by its rival StarHub is similar to the one agreed last summer over the broadcasting of English Premier League football matches in Singapore.
SingTel has announced that it is to sell access to the standalone World Cup content to subscribers for SIN$105 ($83), up to 59% more than Singaporeans had to pay to watch matches from the 2010 football World Cup in South Africa, according to a report on the TodayOnline website. However, SingTel has offered a deal by which consumers can access the content for free by signing up to or renewing deals for access to some bundled content packages the company already sells, the report said.
However, StarHub criticised the arrangements put in place between SingTel and FIFA and said its rival should have made a joint bid with it to secure the broadcasting rights to the forthcoming World Cup.
"We are concerned that customers will have to pay more for 2014 FIFA World Cup," StarHub's chief marketing officer Jeannie Ong said, according to a report by goal.com. "At a time of escalating sports content costs, we made a sincere offer to our competitor for a similar arrangement as the last World Cup. A joint bid would have spread the cost of the content and allowed both operators to offer the tournament at a more affordable price, benefitting all viewers in Singapore."
"Unfortunately, our competitor chose to acquire the rights exclusively. The higher price our competitor paid for the exclusive rights for this year’s World Cup (compared to 2010 World Cup) exacerbates this trend," Ong said.
SingTel said, though, that it had looked into a joint bid with StarHub but found it would not have met the expectations of FIFA, according to the TodayOnline report.
"SingTel wanted Singapore to have certainty with regard to the World Cup," the company said, according to the report. "With a very real threat of Singapore not having the World Cup, we had to proceed with the next option, which was to go on our own. The price eventually secured was reflective of global sports content costs - contrary to our competitor’s unsubstantiated comment, we did not overbid. We negotiated as low a price as we could achieve."
Editor’s note 19/03/14: The MDA in Singapore contacted Out-Law.com to point out that, in addition to requiring SingNet to cross-carry the standalone World Cup at over SIN$100, SingNet is also required to let StarHub cross-carry a separate package of content which includes both the World Cup content and the English Premier League content. It said that the effect of this is that StarHub customers will also be able to access the World Cup content for no extra cost by signing up for or renewing their subscription to the packaged content. We are happy to provide this clarification.