Telegraph/Paul Kelso
Pub landlady's European case threatens to scupper Premier League's £1.78 billion TV deal
The Premier League faces a protracted legal battle to defend its lucrative television rights after a top lawyer in the European Court of Justice (ECJ) advised that the present arrangements are illegal. Advocate general Juliane Kokott advised the court that British pubs and consumers should be free to screen Premier League matches using overseas satellite feeds rather than more expensive domestic services from Sky and ESPN.
If upheld, the ruling could undo the principles that underpin the league's £1.78 billion domestic television deal. It could also see the end of the protected 3pm window on Saturday afternoons when no matches can be broadcast live in the UK.
With overseas broadcasters free to show games in this time slot, the UK ban would be rendered unenforceable, with potentially damaging effects for live attendances throughout the leagues.
Kokott was asked to offer her opinion in the case of Portsmouth publican Karen Murphy, who is appealing against an £8,000 fine for breach of copyright after she broadcast Premier League matches using a Greek satellite decoder card rather than subscribing to Sky.
Kokott's advice is likely to be the beginning of a protracted process. The ECJ will give its verdict in the next three to six months, and the UK High Court in London will then use that ruling to inform its decision on Murphy's case. That decision will then be subject to appeal by either party, potentially all the way beck to the ECJ.
Sky's charges to publicans start at about £1,000 but the Greek Nova feed was significantly cheaper, and Murphy argued that the European single market meant she should be free to use an overseas feed.
Murphy has appealed the case up to the ECJ despite fierce opposition from the Premier League but Kokott's advice, though non-binding, means it is likely that the court will find in her favour.
If it does it will undermine the fundamentals of the model by which the Premier League and all other media rights holders in sport, music and film, sell their rights across the continent.
The Premier League trades on the principle that domestic broadcasters have exclusivity within their territory, allowing it to sell rights at a huge premium in the UK, while also generating significant income from international rights sales across Europe and the rest of the world.
Kokott said that she believed that went against European law: "The exclusivity agreement relating to transmission of matches are contrary to European law," she said.
"The exclusivity rights in question have the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of the freedom to provide services."
If the ECJ rules that commercial users, such as pubs, and individual consumers are free to access satellite feeds from anywhere in Europe it could drastically hit the value of the next television deal.
If the court agrees with Kokott and the decision is upheld in the British courts it could lead to cheaper subscription fees for consumers, but the reduction in revenue to broadcasters – analysts predicted Sky could lose as much as £70 million annually – would almost certainly cause the value of rights to fall.
This would lead to a dramatic reduction in the wages paid to players, the primary beneficiaries of the boom in television rights over the last two decades, but investment into other areas of the game would also be expected to fall.
The Premier League is in the first year of a three-year £1.78 billion deal with Sky and ESPN and would have to completely redraw its model if defeated in the ECJ.
It will vigorously contest any adverse ruling, however, and insisted that its broadcast deals are within European law. It also demanded that such a fundamental change to European law should be undertaken
through the European Commission rather than forced by legal precedent.
"The Premier League's initial view is that this opinion is not compatible with the existing body of EU case law and would damage the interests of broadcasters and viewers of Premier League football across the EU," it said in a statement.
"If [Kokott's] opinion were to be reflected in the ECJ's judgment, it would prevent rights holders across Europe from marketing their rights in a way which meets demand from broadcasters whose clear preference is to acquire, and pay for, exclusive rights within their own territory only, and to use those rights to create services which satisfy the cultural preferences of their viewers within that territory.
"If the European Commission wants to create a pan-European licensing model, it must go through the proper consultative and legislative processes. The ECJ is there to enforce the law, not change it
www.telegraph.co.uk/sport/football/competitions/premier-league/8302315/Pub-landladys-European-case-threatens-to-scupper-Premier-Leagues-1.78-billion-TV-deal.htmlOWEN GIBSON/THE GUARDIAN
EC official's court advice in TV rights case worries Premier League
• Court case against Portsmouth pub landlady worries league
• Victory for Karen Murphy could lead to collapse of revenues Some call her a consumer champion; others say she has opened a Pandora's box that could ruin the economic model that has made Premier League clubs among the richest in world football.
The Premier League tried to prevent Karen Murphy showing illegal foreign feeds of matches in her Portsmouth pub. She took her case to the highest court in Europe and today a European Commission advocate general threatened to undermine the League's forthcoming multibillion-pound television rights auction. In the latest twist to a long-running legal saga, Juliane Kokott – one of eight EC advocate generals – advised the European court of justice to find in Murphy's favour in a judgment that was headed with the words "territorial exclusivity agreements relating to the transmission of football matches are contrary to European Union law".
At the Premier League's Gloucester Place headquarters, where every move is calibrated to oil the wheels of the most successfully marketed league in the world, they are not used to surprises. But the small core of executives, lawyers and advisers who have masterminded English football's boom in TV revenue were shocked by the strength of Kokott's language. What particularly disturbed them was her view that the Premier League's existing territory-by-territory rights model – which, the UK deal included, yielded £3.5bn for member clubs under the current three-year deal – was "tantamount to profiting from the elimination of the internal market".
Kokott's advice is not binding but lawyers said today that the opinion of the advocate general was followed in around 70% of cases. She argued that separating the European market on a country by country basis and selling the rights exclusively to a single operator was "something which constitutes serious a impairment to the freedom to provide services".
In plain English, that means that the regulars at the Red, White and Blue who today raised a glass to their plucky landlady will be able to continue watching Premier League matches on Saturday afternoons, through a Greek broadcaster. And if the opinion of Kokott is carried by the ECJ, it will mean that consumers will be able to follow their lead and watch more live football for less (380 matches are broadcast in Europe, compared to 138 in the UK). It remains to be seen how many will vault through the practical hoops required to do so – purchasing a new decoder, subscribing to a European provider and pointing a satellite dish in the right direction.
"If followed by the full court, this opinion has serious implications for the Premier League and Sky," said Becket McGrath, a partner in EU and competition law at Edwards Angell Palmer & Dodge. "In the short term, Sky will face more defections from subscribers to foreign sources of Premier League football. In the longer term, the Premier League is likely to receive less money when it next auctions off its TV rights, as no bidder will be prepared to offer as much for UK rights. It may ultimately be forced to abandon territorial licensing all together."
That course of action is seen as the most likely by rights experts, if the opinion of Kokott is adopted by the ECJ and survives the appeals process. If the Premier League was forced to sell its rights on a pan-European basis, to avoid a doomsday scenario in which consumers scoured Europe for the cheapest deals, it could still hurt its bottom line, as it would be less able to extract maximum value out of each market. Such a scenario would also force the Premier League to decide whether to turn its back on the 3pm-5pm blackout agreement and sell all 380 live matches on a pan-European basis.
The battle between the media giants who could compete in such a scenario – perhaps News Corporation, MediaSet, Canal Plus and Disney, which owns ESPN – would still drive substantial value. Also, the major growth markets are Asia and the US. Paradoxically, though, such an arrangement might result in concerns over competition at European Union level. If the Premier League was ultimately forced to abandon pan-European deals but also agree that each national broadcaster could sell its rights across the continent, that really would spell trouble.
Premier League lawyers will fight the judgment. But lawyers today warned that they were in uncharted territory. Alex Haffner, a senior associate and EC competition law expert at SNR Denton, said: "It's a clash between commercial justifications and the law. It's one of those things that has challenged the whole principle of how rights are sold."
The Premier League will be fighting on a number of fronts in the coming months and years to protect the model that has served it so well for 20 years. The ever-worsening problem of online piracy and the possibility that regulators will once again open up the question of the way it sells its rights will remain live threats and figure prominently in the in-tray of the incoming general secretary, Nic Coward.
In the meantime, Murphy's law will continue to breed unease and uncertainty at a time when the Premier League is gearing up for its next lucrative rights auction.
Could 3pm Saturday games be shown live?
Since the first live matches were shown on British television, long before they became the driver of a pay TV industry that would pay £1.7bn for domestic rights alone, there was collective agreement that a "blackout" from 3-5pm on Saturdays was desirable to protect lower-league attendances and participation.
But today's intervention by the EC's Juliane Kokott in the case brought against Karen Murphy will revive the debate about whether it has become an anachronism that does more harm than good. Kokott suggests it "cannot be ruled out" that the agreement is based on maintaining rights value rather than protecting small clubs.
She said: "It is, in fact, doubtful whether closed periods are capable of encouraging attendance at matches and participation in matches. Both activities have a completely different quality to the following of a live transmission on television". It has not been adequately shown to the court that the closed periods actually encourage attendance at and participation in matches."
The voluntary agreement – backed by the English football authorities, the government and Uefa – has held. But as the number of live matches has mushroomed so has the number of fixtures rescheduled as a result, in many cases angering fans.
If the Premier League was forced to start selling on a pan-European basis, it might have to take the decision to scrap the blackout to make the same number of games available across Europe. That could open up for the first time the possibility of selling club-by-club "season tickets" to watch every match on television or online – which might even increase revenue for clubs at all levels.
www.guardian.co.uk/football/2011/feb/03/ec-tv-rights-premier-leagueOWEN GIBSON & Mark Sweney - THE GUARDIAN
Pub landlady goes 1-0 up over cheaper TV football
Karen Murphy's Greek decoder at Red, White and Blue pub in Portsmouth wins European court leg on Premier League rights A south coast pub landlady has gone 1-0 up in her longrunning battle against the multibillion-pound English Premier League, after the EU's highest court was advised to rule in her favour.
The case, which began with Karen Murphy defending her right to show English Premier League matches beamed in from Greece to a handful of drinkers at the Red, White and Blue pub in Portsmouth, could have far-reaching ramifications for sport, broadcasting and consumers.
In a decision that could change the way sports rights are sold across the continent, the European court of justice was advised that forbidding pubs from buying in cheap football coverage from overseas operators was incompatible with European law.
If the advice is followed, it will affect everyone from armchair football fans to pub landlords and well remunerated players and potentially undermine a model that has fuelled the Premier League boom years.
Murphy was taken to court by a company representing the league over her decision to import a Greek decoder to show the games rather than paying Sky, which holds the rights in the UK. She has fought the case all the way to the highest European court.
As well as the criminal case against Murphy, civil cases against two importers of the decoder cards are being considered in parallel.
Juliane Kokott, one of the eight advocate generals of the European court of justice, advised that selling on a territory-by-territory basis represented a "serious impairment of freedom to provide services", adding that the "economic exploitation of the [TV] rights is not is not undermined by the use of foreign decoder cards as the corresponding charges have been paid for those cards".
Because Murphy had paid the legitimate rights holder in Greece, she was entitled to receive its satellite broadcasts. "Whilst those charges are not as high as the charges imposed in the UK there is ... no specific right to charge different prices for a work in each member state," Kokott said. Selling on a basis of territorial exclusivity was "tantamount to profiting from the elimination of the internal market".
In the short term, the decision could allow pubs to show matches on a Saturday at 3pm, which the football authorities have long argued wouldresult in lower league attendances. It could also allow consumers to buy cheaper subscriptions from continental providers, assuming they had the correct kit, in preference to Sky.
In the longer term, that would probably force the Premier League to sell its rights on a pan-European basis to a single media group – a scenario that could impact on its revenues and throw up its own European competition issues.
While Kokott's opinion is not binding, the Luxembourg court follows the advice of advocate generals in most cases. The court is expected to deliver its verdict later this year, which will then be handed down to the high court in London.
Given any appeals, it is likely the legal process will continue beyond the Premier League's next rights auction. The current three-year deal runs until next season and brought in £3.5bn, of which £1.4bn was paid by overseas broadcasters.
The Premier League will fight its corner, backed by other rights holders including sporting bodies such as Uefa and the Hollywood studios. A spokesman said it did not believe the advice of the advocate general was compatible with EU case law and accused it of trying to force a pan-European licensing model through the courts rather than going through "the proper consultative and legislative processes to change the law".
Murphy's solicitor, Paul Dixon, said the development was "a huge boost to our case" but he remained cautious. "This is only an opinion and the judges do not have to follow it."
When the case reached Europe last year, Murphy said she planned to fight to the end: "I think it's unjust. I think it's a greedy private company trying to dictate to the small people what they can and cannot do, purely for profit. The law needs changing. If I don't fight, who is going to fight?"
www.guardian.co.uk/football/2011/feb/03/pub-landlady-premier-league-television-rights