Football broadcasting rights in Europe competition beyond the pitch

Written on 9 May 2016

German Football league abandons the “no single player” broadcasting rule

German football fans will have greater choice between providers showing live football games, as media rights for German football games will be available to more than one broadcaster from the 2017/2018 season.

The German Federal Cartel Office (Bundeskartellamt) accepted commitments from the German Football League Association (GFLA) and the German Football League (DFL), after it had voiced concerns that competition for innovation could be restricted if there was only one right holder in the market for live games.

DFL is responsible for the joint marketing of media rights of the 1st and 2nd Bundesliga clubs. In the past, media rights for all football games were granted to only one single bidder as a package. In order to maintain the joint marketing of broadcast rights for football matches the GFLA and DFL had offered a number of commitments, including a so-called “no single buyer” rule. The Bundeskartellamt accepted these commitments as legally binding in April 2016.

As a consequence, a significant number of attractive Bundesliga matches (up to one third of 306 games) will be offered to and broadcasted by a different bidder – instead of a single bidder being allowed to acquire all rights to broadcast live Bundesliga matches.

Enhancing competition

By accepting the commitments, the Bundeskartellamt intends to enhance competition, particularly through internet-based offers, which it considers are still at the development stage. Given that the Sportschau programme of the ARD TV channel offers near real-time highlights immediately after the matches, and the strong position of German free TV, the Bundeskartellamt has not called for a total abolition of the joint media marketing of football clubs – yet.

The packages offered to alternative bidders do not necessarily have to include all distribution channels but could be limited to internet and mobile streaming only. The Bundeskartellamt will carefully observe whether competition from online channels to traditional football commentary will actually enhance competition, for example, by leading to a broader choice of broadcast formats for consumers, or whether further action should be taken.

Lessons to be learned from the English Premier League?

A “no single buyer” rule in the joint selling of media rights to football matches is already well established in England.  However, as recent issues in the live broadcasting of English Premier League (EPL) matches have shown, the introduction of a “no single buyer” rule and a package of rights may not solve all of Germany’s competition issues.

In England, the Football Association Premier League (FAPL) sells the audio-visual rights for the broadcasting of EPL matches with a no single buyer rule imposed to ensure that at least two broadcasters win rights to show matches live.  Moreover, certain matches are reserved for “free-to-air” channels, to ensure that not all EPL matches are shown on subscription-pay TV channels.

However, in November 2014, following a complaint by Virgin Media, Ofcom launched an investigation into how the media rights are sold by FAPL and whether this infringes UK competition law.  Virgin Media alleged that the current collective selling mechanism (whereby FAPL member clubs have pooled the media rights to their matches into FAPL for joint selling to distributors) had resulted in:

  • a lower proportion (41%) of EPL matches being made available for live broadcasting as compared with other leading European leagues);
  • higher prices for consumers of pay-TV packages that include premium sport channels, as broadcasters are submitting increasingly higher bids in order to outbid each other and win the packages of rights.  The most recent rights auction for the 2016-19 season hit £5.1 billion, a 70% increase on the previous rights auction; and
  • football fans feeling compelled to buy pay-TV services from more than one broadcaster (Sky and BT in the UK) to watch more matches featuring their chosen team, as matches are shown exclusively by one broadcaster.

Ofcom’s investigation remain ongoing with a decision expected later in 2016.  The duration of this investigation demonstrates both the complexity and seriousness of the subject matter.

Infringement decision in Italy

Finally, football broadcasting rights have also come under scrutiny in Italy, resulting in total fines of EUR 66 million in April 2016 for the main pay-TV operators Mediaset Premium and Sky Italia, as well as the national A league (Lega Calcio) and their advisors.

The Italian competition authority found that the two competing broadcasters had allocated the 2015-2018 live rights amongst each other, thereby preventing the market entry of other competitors. Mediaset, whose share in the fines accounts for more than three quarters, said it would appeal the decision.

Open and fair competition for football broadcast rights continues to be a hot topic across Europe.  If you would like to discuss the implications of these developments for your business, please contact one of our experts.