Decoding Sports Broadcasts – Recent Cases
By Roshan Gopalakrishna
Case reviews: Football Association Premier League v. QC Leisure and Others (Case C-403/08); Karen Murphy v. Media Protection Services Ltd (Case C-429/98)
On October 4, 2011, the Court of Justice of the European Union (‘ECJ’) held that licences for the broadcast of football matches which granted broadcasters territorial exclusivity and which prohibited television viewers from watching the broadcasts with a foreign decoder card were contrary to the free movement of services and to EU competition law. The ECJ held that the Football Association Premier League (‘FAPL’) which organises the (English) Barclays Premier League (‘BPL’) could not claim copyright in BPL games, but pre-recorded highlight sequences, graphics and accompanying music constitute ‘works’ as defined under relevant copyright laws and are therefore copyright protected. Finally, the ECJ ruled that the transmission of BPL games in pubs and public houses constitutes ‘communication to the public’ for the purposes of European Union (‘EU’) copyright law and requires consent from the rights holder, i.e., the FAPL.
The BPL is home to some of Europe’s most successful and famous football clubs. The BPL is organised by the FAPL and consists of over 38 rounds of ‘home and away’ matches beginning in August and ending in May the following year. In addition, the FAPL organises the filming of BPL matches and licences exclusive rights to broadcast the matches for three-year terms on a territorial basis through an open competitive tender procedure. In August 2010, the FAPL began its association with BBC and BSkyB (‘Sky’) for the broadcast of BPL matches in the United Kingdom. These rights were valued at GBP 1.8 billion. In addition, the FAPL also receives a further GBP 1.4 billion from the sale of international broadcast rights. Each BPL match is filmed by the broadcaster and the broadcast signal is then compressed, encrypted and transferred by satellite to each licensed broadcaster. Under the current access system, subscribers with a satellite dish can decrypt and decompress the signal with a decoder card.
The FAPL commercialises BPL matches by granting exclusive rights to broadcasters on a per-territory basis, requiring them (i) not to exploit their rights outside their allocated areas, (ii) to encrypt their programmes so that they cannot be seen outside their territory and (iii) not to sell decoding cards outside their territories. The issue in the present matters arose from the fact that, in the UK, the price for subscription to Sky’s broadcast services, especially for pubs and other public houses, was considerably high as a result of the monopoly enjoyed by Sky. Therefore, many pubs and public houses in the UK resorted to using foreign (especially Greek) decoder cards to access the BPL games at a lower price and subsequently air the games.
In Football Association Premier League v. QC Leisure and Others (Case C-403/08), the FAPL brought civil actions against pubs that screened BPL matches, and suppliers of Greek decoder cards to public houses and bars in the UK which made possible access to the broadcast. In Karen Murphy v. Media Protection Services Ltd (Case C-429/98), the FAPL initiated a criminal proceeding against the landlady of a pub who used a Greek decoder card to publicly transmit BPL matches. Mrs. Murphy was subsequently fined GBP 8,000. These two cases came before the ECJ following preliminary references made by the High Court of England and Wales under Article 267 of the Treaty on the Functioning of the European Union (‘TFEU’). The main issues that came up for consideration were whether preventing pub owners from using decoders in the UK restricted the freedom of non-UK broadcasters to provide goods or services in the UK, a fundamental freedom protected by the TFEU; and that the exclusive licences entered into by the FAPL with non-UK broadcasters breached EU competition law because they prohibited those broadcasters from supplying decoder cards for use in the UK and so limited the markets in which those broadcasters could make sales.
The opinion provided by the Advocate General of the ECJ Julianne Kokott in February 2011 concluded that the exclusive territorial broadcasting restrictions imposed by the FAPL’s exclusive broadcasting agreements constituted an impairment of the freedom of other broadcasters which could be justified on the basis of protecting commercial interests.
The ECJ ruled that while an exclusive broadcasting agreement by itself would not be anti-competitive, contractual provisions contained therein that aimed at bestowing absolute exclusivity to national markets thereby rendering access to that national market difficult for non-domestic competitors contravenes the common market principles on which the EU is based. Therefore, the exclusive broadcasting agreements entered into by the FAPL with broadcasters were restrictive by their very nature.
In addition, the ECJ also held that the restrictions imposed by the FAPL could not be justified on the basis that they protect the rights of the intellectual property holders by ensuring that they are appropriately remunerated. It is relevant to note that current EU law provides only for rights holders to be “appropriately” remunerated. The payment of a premium by broadcasters to secure exclusive territorial rights results in artificial price differences between national markets that are irreconcilable with the fundamental aim of creating an internal, common market within the EU.
Further, the ECJ held that national legislations such as UK Copyright, Designs and Patents Act 1988 that render unlawful, the import, sale and usage of foreign decoding devices that provide access to broadcasts from other EU member states, restrict the freedom to provide services within the EU which cannot be justified either by the need to ensure that rights holders are appropriately remunerated or by the objective of encouraging the public to attend football stadiums.
Interestingly, the ECJ held that there is no copyright in sports matches themselves but there is copyright in the opening video sequence, BPL anthem, pre-recorded highlights and onscreen graphics, which can be considered “works”, thereby implying that the screening of BPL matches in pubs and bars constitutes “communication to the public” within the meaning of the Copyright Directive, and the authorisation of rights holders is therefore necessary in order to show the works.
In the final judgment, the ECJ has permitted pub owners to use the decoding devices and allowed the viewing of matches so far as they were used only for viewing and not broadcasting. The ECJ has suggested that live feeds transmitted to foreign broadcasters that display FAPL branding may be sufficient to ensure that additional copyright authorisation would be required from the FAPL, especially in the UK, before any public broadcast of BPL matches.
For the FAPL, the judgment couldn’t be more ill-timed. The auction process for future broadcast rights is expected to commence at the end of 2011. In addition, Ian Ayre, Liverpool FC’s managing director, suggested that England’s top clubs should receive a greater share from international television rights because of their popularity among fans and even be able to negotiate their own TV agreements. The FAPL has to consider whether it can maintain the current licensing structure based on national territories. The FAPL may license broadcast rights to BPL matches on a pan-European basis, or to broadcasters in Member States more selectively, or even (although this is considered unlikely) to run its own European channel.
© The Sports Law & Policy Centre