UK: A European Premier League: Final Whistle Blows On Football Rights At The CJEU

Last Updated: 12 October 2011
Article by Tom Scourfield and Alex Bowtell

The highest court in the European Union, the Court of Justice of the European Union (CJEU) yesterday effectively found against the Football Association Premier League (FAPL). The CJEU ruled that it was not illegal for customers to buy set-top box decoder cards from foreign broadcasters, and that the FAPL cannot stop individuals from seeking better foreign deals for TV sports subscriptions than those offered by BSkyB.

However, the court also ruled that pub landlady, Karen Murphy, could no longer continue to use a Greek decoder to screen live Premiership Football matches in her UK pub, on the basis of copyright infringement.

This decision is likely to have wide economic as well as legal implications. Ultimately, it could shake up how UK and European broadcasters buy rights to not just sport, but also films and foreign TV shows.

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Kick off

The FAPL markets the television broadcasting rights for Premier League matches. It grants exclusive live broadcasting rights for the matches on a territorial basis, under an open competitive tender procedure. Each broadcaster is required to encrypt its signal so that as a result, television viewers can watch only the matches transmitted by the broadcasters established in the Member State where they reside. The licence agreements also prohibit the broadcasters from supplying decoder cards to people wanting to watch their broadcasts outside the Member State for which the licence is granted.

These cases concern attempts to circumvent that exclusivity.  In the first case, the FAPL brought proceedings against the two Greek companies which exported to and sold the Greek decoders in the UK. The FAPL also brought proceedings against the British publican Karen Murphy who purchased a Greek decoder card to show Greek broadcasts of live FAPL football to her customers in order to avoid paying the higher UK subscription fees.

From these two joined cases, C-403/08 Football Association Premier League Ltd, NetMed Hellas SA, Multichoice Hellas SA v QC Leisure, David Richardson, AV Station plc, Malcolm Chamberlain, Michael Madden, SR Leisure Ltd, Philip George Charles Houghton and Derek Owen and C-429/08 Karen Murphy v Media Protection Services Ltd, the High Court of Justice of England and Wales referred a number of questions concerning the interpretation of European Union law to the CJEU.

Competition Issues

Murphy argued that she was entitled to show the matches because she was legitimately paying for a subscription from a Greek broadcaster and that to impose national borders to sell rights on a territory-by-territory basis and allow Sky's exclusivity in the UK would be contrary to European competition and free trade laws.

The CJEU, which largely agreed with Mrs Murphy, said in a press release from Curia that "A system of licences for the broadcasting of football matches which grants broadcasters territorial exclusivity on a Member State basis and which prohibits television viewers from watching the broadcasts with a decoder card in other Member States is contrary to EU law" and that this "cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums."

Copyright

However, the decision was not totally in Mrs Murphy's favour. The court ruled that the Portsmouth pub landlady could no longer continue to use a Greek BSkyB decoder to screen live Premiership Football matches in her UK pub, on copyright grounds. "The screening in a pub of football-match broadcasts containing protected works requires the authorisation of those works."

The Court found that, although the FAPL could not claim copyright in the matches themselves because they could not be considered to be an author's own "intellectual creation" and therefore "works" for the purposes of copyright law, the FAPL anthem, opening video sequences, pre-recorded films showing highlights of other FAPL matches and on-screen graphics were "protected works", which would attract copyright protection.

The transmission in a pub of the broadcasts containing those protected works would constitute a "communication to the public" within the meaning of the Copyright Directive 2001/29/EC, for which the authorisation of the author of the works is necessary, because "when a pub transmits those works to the customers present on the premises the works are transmitted to an additional public which was not considered by the authors when they authorised the broadcasting of their works." Therefore, in practical terms, the showing of such broadcasts would always infringe copyright.

The CJEU took the view that, even if there was copyright in the sporting events themselves, banning the use of foreign decoder cards "would go beyond what is necessary to ensure appropriate remuneration for the holders of the rights concerned" because this practice may result in artificial price differences between the partitioned national markets which would be irreconcilable with the fundamental aim of a harmonised internal market.

Full time?

The CJEU judgment (which cannot itself be appealed) will now be passed back down to the UK High Court for interpretation.

The case against the UK pub landlords who used the foreign equipment to show FAPL games and avoid the commercial premises subscription fees for Sky has now been settled, but the FAPL is continuing action against the suppliers of foreign decoders.

So, what does the ruling mean in practical terms?

Rights Holders

The FAPL currently sells TV rights to broadcasters on an exclusive territory by territory basis. Although the CJEU did not say exclusive licensing by territory was unlawful per se, it did say that contractual restrictions to enforce that exclusivity were unlawful. On that basis, the current model has been undermined and exclusivity which cannot be enforced has a greatly reduced value. Following this ruling, licences are now likely to be on a pan-European basis, meaning that some broadcasters may only want to sell in the most lucrative markets to maintain value, or that they will continue to sell across Europe, but at a single price and in the language currently offered in the largest markets (thus potentially deterring purchasers in smaller, or non-English speaking markets who were used to paying less).

Individuals

Individuals wanting to watch paid-for TV in their own homes can now shop around across Europe and may be able to purchase foreign decoders that have been imported into the UK (albeit the coverage will be in a different language). The effect could also be felt on a broader basis, with potential effects on the sale of rights in music, film, books and e-books. Although, whether there is an appetite amongst current UK BSkyB customers to switch, remains to be seen.  There may be technical limitations as to what signals can be received.

Public Screening

In addition, in practical terms, this will not change the position with regard to public screenings. Rights holders should be able to work around this and protect their rights in the context of public screenings of their programmes in pubs and clubs. Because of the copyright issues, the inclusion of additional copyrighted elements throughout the broadcast could make it practically impossible for such foreign broadcasts to be broadcast publicly without infringing copyright.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 05/10/2011.

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