Pay-TV Ruling Marks ‘The End of a Monopoly’

Wednesday, 05th Oct, 2011

Selling TV rights for soccer on a nation-by-nation basis? Illegal, ruled Europe’s highest trade court on Tuesday. The landmark decision will open up the market for pay-TV services and could result in much lower prices for consumers. German editorialists welcome the birth of real competition in the market.

A landmark ruling by the European Court of Justice on Tuesday could mean that viewing professional football matches on television will soon get cheaper in Europe — a decision that will please consumers but cause a collective shudder in soccer leagues and at pay TV providers in a market that is worth billions of euros.

Under current practice in Europe, national football leagues issue contracts licensing the broadcast of professional matches in individual European Union countries that prohibit the licensing companies in those countries from marketing or airing those games in other EU countries. But on Tuesday, the court said practice of selling rights territory by territory in Europe was “irreconcilable” with the aim of a single market.

The ruling means that football fans across Europe will have a choice in the future of whether they subscribe to games of Britain’s Premier league, Germany’s Bundesliga or other leagues from a German, Greek, British or other Pay TV service, thus creating greater competition.

The case made its way through the courts in a legal dispute between the Premier League and Karen Murphy, who in 2007 showed British football matches at her pub in Southsea using a decoder card for Greek pay TV service Nova, which had the rights to broadcast the games only to its subscribers in Greece. Satellite TV provider BSkyB, however, held the exclusive rights for broadcasts in Britain. By subscribing to the Greek TV service, Murphy managed to save around €6,000 per year. The legal dispute lasted several years, but the European Court of Justice decision is final and cannot be appealed.

For pay TV services and football leagues, the decision is a major blow given that national broadcasters will now be forced to compete with foreign services. After Tuesday’s ruling, the price of shares in German pay TV service Sky Deutschland fell by as much as 5 percent, with similar declines for BSkyB in Britain.

In addition, prices for television rights sold by football leagues are likely to drop. Indeed, British broadcaster BSkyB had already threatened to alter its contracts with the Premier League if the court ruled against it.

According to the British daily Guardian, it is believed that British pub owners pay as much as £1,000 (€1,160) a month to Sky for the privilege of showing the matches in their establishments. In Murphy’s case, the barkeeper paid an estimated £800 a year for the Greek card. The paper also reported that the Premier League makes in excess of £1 billion on TV deals outside Britain.

The ruling could also affect television rights for Hollywood films and US television programs, many of which are likewise issued on a country-by-country basis. The EU’s commissioner for the digital agenda, Neelie Kroes, already stated in the run-up to the ruling that she would address the issues surrounding the licensing of other programming and content within the internal market.

Editorialists in Germany on Wednesday celebrate the decision, arguing it may be a gift to television viewers in Britain and all across Europe.

Source: Spiegel On-line Staff, spiegel.de (excerpt)

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