Premier League face potential 'Bosman' of TV rights
- 3 October 2010
- From the section Business
The European Court of Justice will this week hear a landmark case brought by a Portsmouth-based pub landlord, which could change the landscape of how sports broadcasting rights are sold across Europe.
Five years ago, Karen Murphy would try to draw punters to her Portsmouth pub, The Red, White and Blue, by showing Premier League football matches on the pub TV.
However, she found the monthly subscription to Sky Sports increasingly unaffordable - pubs can pay more than £1,000 a month.
Instead, she found a cheaper means of screening English football - a subscription to a Greek satellite broadcaster, NOVA. This imported satellite card was around one 10th of the cost Karen was paying to BSkyB.
She says she's not the only one saving money in this way:
"I think you'll find that most publicans will try and find another way of showing football. In fact quite a lot of them do.
"I think it's only the larger chains that can afford to pay the Sky prices. A lot of pubs have taken Sky out - they simply can't afford it."
However, using these foreign subscription cards puts publicans like Ms Murphy in breach of UK copyright law, because the means by which they screen football is not via the authorised broadcaster - Sky Sports.
As a result, Ms Murphy was taken to court and ended up having to pay nearly £8,000 in fines and costs after being caught by enforcers working on behalf of Football Association Premier League Limited (FAPL) - the private company which represents the broadcasting interests of the 20 English Premier League clubs.
Five years on from her first appearance in a magistrates court, she has taken her appeal all the way to the grand chamber of the European Court of Justice (ECJ) - a court reserved only for the most complex and important cases of European law.
"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," she told 5 live Investigates.
"The law needs changing. If I don't fight who is going to fight?"
Sitting in her pub, she puts her case into perspective:
"If I wanted to go and buy a car, I could go to any garage I like. Me, as a publican, if I want to show football, I can only go to the Sky garage, and have to pay 10 times the price of anybody else [in Europe]. I don't believe that's fair."
Freedom to choose
The case Ms Murphy is taking to the ECJ is based on freedom of trade.
She claims by restricting her choice of satellite TV providers to a single broadcaster - BSkyB - the Premier League contravenes European Union principles of free movement of goods and services between member states of the EU.
Furthermore, such practice also prevents free and open competition in the UK broadcast market.
If Ms Murphy wins, the future value of the Premier League's broadcasting rights could be undermined.
"The Premier League is probably the most aggressive defender of its copyright in the world of sport," says analyst Frank Dunne, acting editor of TVSportsMarkets.com.
"The Premier League's action is part of a wider battle to protect its copyright, which is being fought on three fronts.
"First, is the battle against UK pubs showing matches from foreign satellite services. Second, there's the battle to stop pirate coverage of league matches being streamed online using peer-to-peer technology. Third is the battle against unauthorised use of match clips on YouTube."
The Premier League says this fight to protect its interests is about maintaining standards:
"Without this protection it is the consumer, or fans as we prefer, that ultimately suffer as the investment in quality content will inevitably be diminished. It is also unfair on those licensees that respect the law."
While some 80,000 unauthorised internet streams of football matches have been shut down over the past two years, the FAPL has not always been successful in its pursuit of those it deems to have infringed its copyright and earlier this year failed in its attempt to sue YouTube in a US court.
However, the Premier League says the forthcoming ECJ hearing will provide an opportunity to clear up issues that have long been used to confuse publicans and licensees.
The FAPL also has the endorsement of BSkyB, which told the BBC:
"This is primarily a case about how rights are licensed to broadcasters across Europe. While Sky is not a party to this case, we welcome the Premier League's determination to seek a definitive ruling on this issue."
But the impact of a decision against the FAPL cannot be overestimated, according to Mr Dunne.
He says: "This case has the potential to become the Bosman of broadcasting." The Bosman ruling was another landmark decision made by the ECJ in 1995, which had a profound effect on the transfer of professional football players within the EU.
A decision against the Premier League would lead to a similarly radical shake-up in the way the broadcasting industry works.
"The doomsday scenario for rights-holders [such as the Premier League] is that their ability to sell their content on an exclusive basis by individual European territory, charging different rights fees according to the size of the individual market, will be undermined," says Mr Dunne.
"Nobody seems really sure how rights sales would work if that system were ruled to be in breach of European law on the free movement of goods and services.
"The Premier League is confident that it is going into the case with strong arguments. But it was also confident of its arguments when doing battle with YouTube in the New York courts, and it lost that one."
One criticism of the current market model is that the FAPL insists that broadcasters include clauses in their subscription contracts with consumers that forbid the use of broadcasters' decoder cards outside the designated territory. The effect of such restrictions is that it creates territorial monopolies.
However, should Karen Murphy win, it is possible that these territorial monopolies could be consolidated further.
Because if football rights - or any media rights - have to be sold on a Europe-wide basis, then only a handful of companies will be able to afford to bid.
What this will mean for the average consumer is not clear but up to now the money generated from the sale of broadcast rights of Premier League matches has revolutionised English football, turning it into the most lucrative league in the world.
Anything which undermines this revenue stream is seen as potentially harmful to the future success of English football, and concerns over the use of foreign satellite decoders is not limited to copyright infringement.
Anyone using the imported boxes can side-step the Premier League's Saturday afternoon broadcasting blackout.
Officially, no UK-based broadcaster can show premiership football at the traditional kick-off time of 1500. This is because the Premier League wants to encourage attendance at live games.
However, European broadcasters do not have to abide by this restriction and the foreign decoders allow landlords to show games that are prohibited to Sky subscribers.
So, does Karen Murphy think her case is potentially damaging to the game?
"I'm not damaging football. Football is damaging itself by dictating when matches are shown. Supporters don't want a match on a Tuesday night - which suits the broadcaster - they want a match on a Saturday afternoon. The whole thing has got way out of control. It's pure greed."
Ahead of the ECJ hearing, which begins on Tuesday, the Premier League is remaining tight-lipped.
In a statement it said: "It is not appropriate for us to comment in any detail on this matter given the close proximity of the ECJ hearing, however after this process has been concluded we will, of course, place our full position on record."
But how confident is Karen Murphy? Does she think she will win her case?
"Absolutely. I think I should have freedom of choice. It's not like I went to buy something illegal. I just went to buy it from a different company. I just made a choice."