On 4 October 2011, The European Court of Justice (“the ECJ”) ruled in the joined cases of Football Association Premier League Ltd (“the Premier League”) and others v QC Leisure and others; and Karen Murphy v Media Protection Services Ltd.
These cases concerned the (current) agreements by which the Premier League grants exclusive live broadcasting rights for Premier League football matches to different broadcasters on a territorial basis. These agreements oblige the broadcaster to receive an encrypted satellite signal to ensure that only those subscribers within the defined territory are able to view the live football matches. Accordingly, broadcasters are also prohibited from supplying decoder devices to persons outside of their territory which would allow them to view the transmissions.
Karen Murphy, a publican from Portsmouth, obtained such a decoder card and screened coverage of Premier League football matches, transmitted from Greece, in the Red, White and Blue public house. The Premier League began legal proceedings in order to protect the exclusivity of their agreements reached with the broadcasters within the UK which were being eluded by publicans such as Karen Murphy. Proceedings were also brought against others, including the Greek suppliers of the equipment. In the course of those proceedings, the High Court referred a number of questions to the ECJ in order to clarify the application of EU law in respect of the territorial exclusivity arrangements central to these disputes.
Judgment
The ECJ held that “a system of licences for the broadcasting of football matches which grants broadcasters territorial exclusivity on a Member State basis and which prohibits TV viewers from watching the broadcasts with a decoder card in other Member States is contrary to EU law.”
In parts, the ECJ has ruled against the Premier League and some commentators have declared this as “a victory for the common man” and a blow for the power brokers of football within England and Wales; namely, the Premier League and BSkyB. Others have stated that publicans will now be able to utilise such decoders moving forward.
Are these reasonable conclusions to draw? Upon further inspection of the complicated judgment it appears not.
In summary, the ECJ decided that:
National legislation which prohibits the import, sale or use of foreign decoder cards is contrary to the EU principle of the freedom to provide services. This cannot be justified by reference to either the objective of protecting intellectual property rights or encouraging the public to attend football matches.
Provisions of exclusive licences which forbid the supply of decoder cards to persons outside of the Member State are contrary to EU law. Restricting the cross-border provision of services relating to the sporting event concerned is anti-competitive. Such prohibitive agreements inevitably frustrate the objectives of the EU internal market.
Certain aspects of the broadcasts are protected by copyright and so the transmission of broadcasts containing such works in a public house (as a “communication to the public”) will amount to an infringement of those rights unless the author of the works has provided authorisation for their use. As a result, the Premier League may still be able to prevent publicans from broadcasting coverage transmitted from other Member States which include those protected elements, or to demand a license fee before they do so.
Comment
Firstly, in interpreting this judgment it is important to note that the proceedings are yet to reach their conclusion. It is for the English High Court to apply the ruling of the ECJ to the facts of the case. It is generally accepted, however, that the High Court will follow the ECJ’s guidance.
The Premier League’s territorial approach
It appears almost certain, therefore, that the ECJ’s judgment will have a real effect on the way the Premier League sell broadcast rights within the EU in future. As a result of the ruling, the legality of the Premier League’s current model of licensing arrangements will be doubtful. In all likelihood the same will apply to other sports rights holders, for example, those within Formula One. Consequently, the Premier League (and potentially others too) will have to adapt their methods in terms of their licensing arrangements.
The Sports Rights Owners Coalition has stated that the ruling could lead to a concentration of dealings within markets where there is a substantial following, i.e. those which produce the highest revenues, a move which would prove to be detrimental to those consumers within the smaller markets. An alternative is a pan-EU package; again, this could also hurt consumers within the smaller markets as, for example, the associated higher fees in order to secure the license to broadcast the coverage may deter the broadcasters from securing licenses within those Member States. Irrespective of the model adapted, the rhetoric from the Premier League suggests that they are confident in retaining their current level of revenue. Therefore, despite individuals being free to obtain a decoder from another Member State the cost benefit of this is likely to be nullified.
The practical impact of copyright
Practically, the most interesting aspect of the judgment is what the ECJ considers to be capable of protection under copyright law. Sporting events are deemed unable to be regarded as intellectual creations capable of being classified as works protected by copyright. However, the ECJ has concluded that the Premier League could assert copyright in various works contained within a broadcast, such as the opening video sequence, the Premier League anthem (some may say that this is a loose use of the term “anthem”), pre-recorded films showing highlights, or various graphics. In effect, this decision has created a division between the individual use and commercial use of decoders to broadcast the coverage of Premier League football matches. Individual persons will be entitled to purchase decoder cards from other Member States and view the coverage within their own home. Publicans whilst enjoying the same right to purchase a decoder will, in screening the coverage (which contains the above copyright protected works) to the public, infringe the Premier League’s copyright protected works. In order to prevent this they will require the permission of the rights holder – something which is extremely unlikely, short of an expensive license agreement!
This distinction between the home and commercial viewer is crucial in terms of protecting the Premier League’s revenue streams. For example, the decoder used by Karen Murphy cost £188pcm whereas a similar package provided by BSkyB would have cost £480. Obviously, widespread use of such decoders in a commercial environment would seriously impact on BSkyB’s revenues within the UK market. Within a domestic context, the saving on fees for the individual is smaller. The domestic package from the same Greek supplier utilised by Karen Murphy cost £42pcm, more expensive than some of the packages offered by BSkyB. Arguably, in future, individuals may be able to find cheaper deals but there are other considerations to take into account; for example, offsetting any saving against the loss of English coverage. This may be irrelevant within the atmosphere of a public house yet in a person’s home this could reduce the entertainment factor as well as proving to be extremely irritating. Considering this further, the ruling could therefore provide an opportunity for BSkyB. They could begin to offer their services in Member States where there is a large concentration of expatriates such as France and Spain, those persons may be willing to pay a premium for BSkyB’s coverage.
In order to reinforce the protection offered by copyright, the Premier League may introduce requirements within future licence arrangements which mean that broadcasters are obliged to use additional graphics throughout the live coverage so as to protect the broadcast as a whole. In any event, it could be arguable that there are already sufficient graphics present throughout the broadcasts to offer this protection, for instance the logos emblazoned on the sleeves of the players’ shirts - the same logo also periodically appears on the hoardings surrounding the field of play.
In conclusion
Irrespective of some of the news reports on the effect of this case, publicans, in particular, must proceed with caution since screening coverage containing copyright protected material could result in a copyright infringement claim being brought against them. Such claims would appear more likely considering the clarification by the ECJ as to what can be categorised as a copyright protected work in respect of sports broadcasts, in particular Premier League football matches.
The outcome of the judgment appears to be no more than a score draw. Football matches culminating in such an outcome tend to be followed by both sides staking claim to a moral victory. Essentially, the outcome appears the same in the ECJ. Individuals should be able to shop freely within the EU for the cheapest sports television package which offers the opportunity of more competition and lower fees, in theory. Nevertheless, the rights holders, thanks in no small part to the ruling on copyright, appear to be confident that their revenue streams will not be dented.
Undoubtedly, it is going to be interesting to see how sports rights holders collectively develop and adapt their arrangements and coverage of live sports broadcasts in light of the ruling. Moving forward a consideration must be: what next? Having taken on public houses it is possible that the Premier League and sports rights holders will seek to protect their rights against those eluding the licensing arrangements for commercial gain on the internet.
For more information or advice on copyright protection, please contact Iain Colville on 01926 880753.
