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Advocate General’s Opinion on Free to air Broadcasting of Sports in the EU

By Seshank Shekar

Introduction

On December 12, 2012, Advocate General Niilo Jääskinen delivered a non-binding opinion on the arguments put to the Court of Justice of the European Union (“CJEU”) in respect of a long standing dispute between the Fédération Internationale de Football Association (“FIFA”) and the Union of European Football Associations (“UEFA”) on one side and the United Kingdom (“UK”), Belgium and the European Commission on the other. The dispute centred around the decision of the UK and Belgium to designate two major footballing tournaments, namely the FIFA World Cup and the UEFA European Championship as events of major national importance in line with the powers granted to members of the European Union (“Member States”) under the Television without Frontiers Directive, now renamed the Audiovisual Media Services Directive (2007/65/EC) (“AVMS Directive”).

The AVMS Directive

Article 14 of the AVMS Directive grants Member States the power to take measures in accordance with the law of the European Union to ensure that broadcasters under its jurisdiction are not allowed exclusive rights to broadcast events which are regarded by that Member State as being 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 by live coverage or deferred coverage on free to air television. The Member State is further permitted to draw up a list of designated events, national or non-national, which it considers to be of major importance for society.

Member states are required to notify the European Commission about the restrictions they wish to impose under Article 14, whilst the European Commission is in charge of verifying the compliance of such measures with EU law.

Of the eight Member States who drew up and submitted such lists to the European Commission in 2008 as permitted by the AVMS Directive under Article 14, the lists prepared by the UK and Belgium were the only ones which included the whole of the FIFA World Cup and European Championships, whereas the lists of other Member States contained only important or ‘prime’ matches such as the finals and the semi-finals of the tournaments. The FIFA and UEFA accordingly challenged the validity of the UK and Belgium lists and the decision of the Commission before the General Court of the European Union (“EGC”), primarily on the grounds that not all the matches in the tournaments could be regarded as events of major importance as provided for under Article 14 of the AVMS Directive.

Procedural Background

UEFA and FIFA first initiated action against the legality of the AVMS directive and the lists drawn up by the UK and Belgium in 2008 in response to a European Council decision (2007/730/EC) which had previously endorsed the UK’s list. Several actions and appeals have followed, with the each matter following broadly similar lines of argument. The main contentions of FIFA and UEFA being:

(i)                 That the listing of the entire FIFA World Cup and the European Championships tournaments on the free-to-view list of Member States is disproportionate and that only “prime” matches (i.e., only those that the national team is playing in, or the games that attract the highest audiences) should be considered important enough to be listed; and

(ii)               That the listing system provided under the AVMS Directive impairs FIFA’s, UEFA’s and the content rights owners’ freedom to provide services and is not in line with EU competition law; and

(iii)             That the power conferred to Member States negatively affects competition among broadcasters and reduces the potential revenue that may be generated by organisers of major sports events.

The EGC first ruled on the issue on February 17, 2011 in FIFA v European Commission (Case T-385/07). While ruling in favour of the European Commission, the UK and Belgium the EGC held that any match in tournament could have an impact on which matches the respective national teams of Member States would play in at the latter stages of that tournament. Further, The EGC acknowledged that the tournaments themselves could be regarded as single events rather than a series of individual events and the participation of national teams in ‘prime’ matches such as the knock out rounds or the final, might depend on the results of ‘non-prime’ matches. Therefore, it would be practically impossible to determine which matches would actually be decisive for a given national team at the time when the national lists are outlined. With respect to the sports organisers’ (such as FIFA and UEFA), freedom to provide services, the EGC concluded that this freedom was outweighed by the public’s right to freedom of information and access to events of major importance.

The Present Appeal

On April 27, 2011, FIFA and UEFA submitted an appeal (Case C-204/11 P) in the CJEU against the EGC judgment delivered in February 2011 and the arguments for all sides were heard by the CJEU on September 13, 2012. It was for this application by UEFA and FIFA that the Advocate General delivered the opinion on December 12, 2012.

In respect of the argument that sports organisers such as FIFA and UEFA are being limited in their freedom to provide services, the Advocate General noted that it was clear that a restriction on the freedom to provide services was understood as “an inherent consequence of the power conferred on the Member States to draw up national lists for events of national importance”. Further, the Advocate General opined that it was entirely possible that legislators of the European Union considered that restriction under Article 14 to be indispensable so as to ensure access to a large audience to events of major importance for society within the meaning of the AVMS directive. As such, the restrictions may be considered justified and, therefore, proportionate, subject to compliance by the Member States with the conditions laid down for drawing up national lists, a matter which the Commission is required to verify.

In addressing the argument that the European Commission should have undertaken closer scrutiny of the national lists, the Advocate General observed that the AVMS Directive and other such European Directives, are only binding as to the final result to be achieved by Member States, but that national authorities of such Member States may chose “the form and methods used to achieve that result”. Considering that the European Commission only has a “power to review the conformity of the national lists and not a power to substitute or to harmonise which would include the power to determine the national list itself”, the Advocate General was of the opinion that any objections or reservations that FIFA or UEFA may have had with the lists, should be addressed to the relevant national authorities who draw up the lists (such as OFCOM in the UK) rather than the European Commission.

The Advocate General also discussed UEFA and FIFA’s right to property and freedom to pursue an economic activity which was the basis for their claims of loss of earnings brought against the lists of UK and Belgium. While disagreeing with the contentions of UEFA and FIFA, the Advocate General’s opinion concluded that “the European Union legislature is justified in imposing limitation or restriction 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 public interest”, and goes on to state that “even where intellectual property rights are recognised, the rights holders concerned are not guaranteed the opportunity to demand the highest possible remuneration”.

As noted earlier, the opinion of the Advocate General is not binding on the CJEU, however, regardless of how the current appeal to the CJEU pans out, the case may assist other Member States in determining which events may be classified as ‘important’ and may also address the wider concerns that have emerged such as the possibility that Article 14 of the AVMS Directive may be in violation of the EU competition law and that such provisions may undermine the value of broadcasting rights and adversely affect the future investment in sport.

The Indian Scenario

There are several parallels that may be drawn between the controversy surrounding the AVMS Directive and the circumstances leading up to the enactment of Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (the “Act”) in India. The Act was passed by the Parliament in March 2007, explicitly for the purpose of providing access “to the largest number of listeners and viewers, on a free to air basis, of sporting events of national importance” in response to several disputes between content rights owners and the Government with respect to sharing of video of feeds on free to air television for ‘important’ sports events.

In brief, the Act provides that no content rights holder broadcasting service provider can telecast live a “sporting event of national significance” unless it simultaneously shares the live broadcast signal (devoid of advertisements) with Prasar Bharati which is the State run national free to view television broadcaster. Notably, the Act, unlike the AVMS Directive, provides for the sharing of television advertisement revenue between content rights owner and Prasar Bharati in the ratio of not less than 75:25 in favour of the content rights owner.

It should be noted that like the AVMS Directive, the criteria to determine what constitutes ‘sporting events of national importance’ has not been specifically addressed in the provisions of the Act. The list of sporting events to which the Act applies is determined and notified from time to time by the Ministry for Information and Broadcasting in consultation with the Ministry of Youth Affairs and Sports and Prasar Bharati. According to a Government notification issued on February 8, 2008 [S.O. 281(E)], the list of events which are of national importance includes inter alia the Summer Olympics, the Commonwealth Games and the opening match, semi-finals and finals of the FIFA World Cup and certain other events such as the Champions Trophy in Hockey and the Davis Cup in Tennis.

As per a separate notification issued on August 23, 2012 [S.O 1957(E)], the ‘sporting events of national importance’ with respect to cricket include:

(i) All official one day and Twenty-20 matches played by the Indian Men’s Cricket Team and such test matches as are considered to be of high public interest by the Central Government; and

(ii) The Semi-finals and Finals of the ICC Men’s World Cup and the International Cricket Council Championship Trophy, regardless of whether the Indian team is participating therein.

Non-compliance by the content rights owners of the aforementioned rules enables the Central Government to impose penalties, including fines, suspension or revocation of licence and revocation of permission or registration.

Conclusion

Hence, while the right to have information is significant and crucial, it is equally important that a balance be struck between the interests of the broadcaster and viewers. Organization of a sporting event of the magnitude of the FIFA World Cup requires huge investments. A lack of balance in this scenario could pose a significant disincentive to potential investors for sporting events.

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