How sporty is the joint sale of sports broadcasting rights? A critical reappraisal of the status of joint selling agreements under the EU antitrust rules Ben Van Rompuy Institute for European Studies – VUB Sport and EU conference, Ghent July 2, 2010

Overview Introduction The European Commission’s approach The interests of professional team sports / leagues The interests of broadcasters The interest of sports fans Conclusions

1. Introduction Article 101 TFEU: general prohibition + exemptions – Contribute to improving production/distribution of goods or promoting technical/economic progress – Consumers must receive fair share of the benefits – Restrictions are indispensable – Competition is not eliminated European Commission’s decisional practice – UEFA (2003) – DFB (2005) – FAPL (2006) – White paper (2007): consolidation of the doctrine Modernization of antitrust law enforcement: NCA

2. The Commission’s approach Non-discriminatory and transparent tendering – Italy – Monitory Trustee (FAPL) Limitation contractual duration: three years – Spain Limitation of the scope of exclusivity: – Segmentation of the rights in several, meaningful packages – Earmarked packages for new media markets – Reduction in hold back of rights Fall-back option and no unused rights No single buyer obligation (FAPL) = ‘fairly balance of the interests of leagues, broadcasters and fans’ ?

3. The interests of clubs / leagues Major source of income: Branding of the output: wider recognition, league product > supporters, sponsors,.. The competitive balance defense: greater revenue distribution, financial solidarity Ofcom (2007)

3. The interests of clubs / leagues Acceptance of the financial solidarity argument? European Commission: – Issue addressed in policy discourse – Helsinki Report (1999): need to examine the extent to which a link can be established – White Paper (2007): ‘collective selling can be important for the redistribution of income and thus could be a tool for achieving greater solidarity within sports’ … ‘or alternatively a system of individual selling by clubs … linked to a robust solidarity mechanism’ – Issue not addressed in actual decisions Collective selling indispensable? – US – Netherlands, Italy,...

4. The interest of broadcasters Incredible rise in the prices paid for the rights, eg – UEFA: 1992/4 (€ 71 million) /9 (€ 638 million) – Olympic Games: 1992 (€ 20 million) – 2000 (€ 350 million) – 2012 (€ 566 million) Internet and new media – Increasing importance, eg Verizon / Wireless deal NFL in US (€ 720 million) – Triple play (France) – Business models – Territorial exclusivity of rights Competition between different platforms & within individual platforms – Italy : – Decision ANC (2009) + Conto TV (2010) – Unfair bidding process, abuse of dominant position (no individual sales) – Serie A games now sold separately for free-to-air / satellite / digital terrestrial television

5. The interests of sports fans UK: remedies in FAPL decision: practical effects very limited – Remedies facilitated market entry – FAPL auction : 2 – FAPL auction : 1 – viewers: additional subscription – ESPN on Sky Platform (satellite) + Virgin media (cable)  Ofcom Pay TV Consultation Presumed causality market level playing field – consumer benefits = questionable

5. The interests of sports fans Suggestion for a stronger consumer-interest approach: impact on consumer choice? – German Bundeskartellamt: 2008 assessment DFB joint selling arrangements – Article 101(3) TFEU Improve production/distribution of goods or promote technical and economic progress Consumers receive fair share of the benefits Restrictions are indispensable Competition not eliminated – Claimed efficiencies adequately passed-on to final consumers? – Concept of ‘consumers’

6. Conclusions Anticompetitive horizontal restraints continue to hamper European media and TV markets = illegal unless shown to be reasonably necessary to achieve stated objectives Need for sound arguments and evidence Quid legitimacy of collecting selling? EU vs. national level Reduction of cross-platform exclusivity

7. Questions, comments Ben Van Rompuy Institute for European Studies – VUB Pleinlaan 2 – 1050 Brussels