Football footage and freedom

Football is money. Rules and cases on transmission rights attest to the economic interests involved in the broadcasting of football matches, such as the ones of the ongoing Euro championship.

Television channels may acquire exclusive rights to broadcast events of high interest to the public, such as football matches, but the Audiovisual Media Services Directive allows member states to ensure that events, which they regard of major importance for society, are not broadcast in such a way as to deprive a substantial proportion of the public of following such events by live coverage or deferred coverage on free-to-air television.

Furthermore, a channel that has such exclusive rights must allow other channels established in the EU to use short extracts so that they may transmit short news reports on those events.

Pay TV provider Sky Austria acquired exclusive rights to broadcast certain UEFA Europa League matches in the 2009-2010 to 2011-2012 seasons within the licence territory of Austria for which it paid substantial licence and production costs.

It had subsequently negotiated a deal for paid use of short clips of matches in news bulletins with Austrian public broadcaster ORF. However, after the directive came into force in Austria, ORF sought to get out of the deal and take the broadcast excerpts for free off the Sky satellite feed.

Austria’s regulatory authority in the field of communications ordered Sky to let the national public broadcaster air short clips of games of Europa League matches involving Austrian teams in news reports. On the basis of the directive, Sky was allowed only to charge for the costs of access to the satellite signal, but Sky balked because such access equalled zero.

The matter was brought before the Austrian Federal Communications Board.

The Austrian broadcaster argued that no payment was due by it to Sky Austria for airing short clips of matches as the directive allowed it to take the clips on a fair, reasonable and non-discriminatory basis for a compensation fee that does not exceed the additional costs directly incurred in providing access. It maintained that there are no such costs because it can access the satellite feed at no additional cost to Sky.

On the other hand, Sky Austria claimed that it was unfair to give another broadcaster free access after it had paid millions for exclusive rights, and cast doubt on the legality of the obligation imposed by the directive, dubbing it a violation of its fundamental property rights.

The case was referred to the Court of Justice of the European Union which, as is customary, awaits the opinion of its appointed legal adviser before delivering judgment. The Advocate General’s calling was to analyse the conformity of the directive with the freedom to conduct a business and the right to property.

In his opinion, Advocate General Yves Bot considered that the right to property, similarly to the right freely to exercise an economic activity, is one of the general principles of law of the union.

However, he qualified that statement by proposing that those principles are not absolute and must be viewed in relation to their social function. Consequently restrictions, permissible even under the Charter of Fundamental Rights of the European Union, may be imposed.

Inroads to these principles, however, must correspond to objectives of general interest pursued by the EU and must not constitute a disproportionate and intolerable interference affecting such rights.

In making it obligatory for sport clips to be accessible, the directive imposes a limit to the right holders’ freedom to conduct a business, of which freedom of contract forms part, and a limit to the use that broadcasters who hold exclusive transmission right may wish to make of their property.

After conducting a weighing and balancing exercise of the fundamental rights at stake, the Advocate General came to the conclusion that the obligations imposed by the directive are justified, intended as they are to ensure the freedom to receive information and media pluralism.

In relation to the amount of compensation payable for such clips, the Advocate General opined that leaving the determination of compensation to free negotiation between the primary (Sky) and secondary (ORF) broadcasters would have the disadvantage of putting the holders of exclusive rights in a position of strength, especially when the event in question is of particular importance.

This would create a risk that the price charged to secondary broadcasters that wish to produce short news reports may reach such proportions as to deter them from exercising that right.

Yet, the Advocate General’s conclusion does not give secondary broadcasters the green light to transmit unlimited footage of events for which the primary broadcaster owns exclusive rights.

The ruling of the Court of Justice is expected later this year.

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Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.