The EU's Premier League Ruling Explained

The Court of Justice of the European Union yesterday issued its long-awaited judgment in the so-called 'pub football' cases. This may have a huge impact on the way all media rights are licensed in the EU.

Background

  • The cases centre around certain pubs in the UK using foreign decoder cards to access foreign broadcasts of FA Premier League (FAPL) matches, instead of paying a subscription to the broadcasters who have acquired the exclusive TV broadcasting rights in the UK, Sky and ESPN.
  • The attraction of the foreign decoder cards to the UK pub market is clear: foreign subscriptions are cheaper. The foreign broadcasters also show live Saturday 3pm matches which may not be shown by UK broadcasters according to rules intended to encourage fans to attend live lower league games played at that time.
  • The threat to the FAPL is equally clear: if the UK broadcasters’ exclusivity is undermined, and pubs and domestic consumers in the UK can shop around the EU for the cheapest available deal, then the value of the FAPL’s TV broadcast rights will suffer.
  • The FAPL therefore sought to bring proceedings against the UK pubs and the importers of the foreign decoder cards, arguing that:
    • since the foreign decoder cards are being used in an unauthorised manner, they are "illicit devices" as defined by the Conditional Access Directive and which are prohibited under EU and domestic law, and
    • the UK pubs were infringing the copyright of the FAPL.
  • The pubs and importers of the foreign decoder cards argued that:
    • the foreign decoder cards did not fall under the definition of "illicit devices" in the Directive, and
    • the exclusive territory-by-territory basis upon which the FAPL sells its rights within the EU contravenes basic principles of EU law, and
    • there was no infringement of copyright or, in the alternative, that the activities fell within certain permitted exceptions

The Decision

freedom to provide services

  • National legislation which places any restriction on the import, sale or use of the foreign decoder cards internally within the EU which cannot be justified is contrary to the freedom to provide services.
  • The justifications put forward were rejected by the Court, which ruled that:
    • although the absence of the restriction would mean that broadcasters might not pay the premium they might otherwise pay for a guarantee of absolute territorial exclusivity, the FAPL should still be able to achieve "appropriate remuneration" for its rights, and
    • the FAPL's argument that the availability of Saturday 3pm matches in the UK might deter the UK public from attending lower league matches was considered plausible by the Court, but that objective could be achieved without the restriction - namely by the FAPL requiring that no Saturday 3pm matches be broadcast at all throughout Europe

EU competition law

  • The contractual obligations imposed by the FAPL on each of its licensees that they may not authorise the use of their decoder cards outside of their licensed territory are contrary to EU competition law.
  • The Court found that an exclusive territorial licence of broadcast rights is not, of itself, anti-competitive. However, obligations requiring each broadcaster to close its national borders to subscribers outside of its territory in order to give that exclusivity proper effect would eliminate competition between broadcasters and partition national markets in accordance with national borders.

illicit devices

  • The foreign decoder cards are not judged to be "illicit devices" prohibited by the Conditional Access Directive. The term "illicit devices", the Court said, was intended to capture, in essence, pirate decoder cards - cards "designed or adapted" by a third party to give unauthorised access to a particular service free of charge. This was not the case here - the cards here were valid decoder cards of a licensed broadcaster in the EU for which a subscription was paid. The fact they were being used outside of the geographical area for which they were issued did not, in itself, make them "illicit devices".

copyright - live matches

  • Live matches themselves are not protected by copyright, although the FAPL branded opening video sequences, theme music, on-screen graphics and highlights of previous matches are.
  • Therefore, as long as the FAPL ensures that the feed of their matches that they provide to their licensees includes enough copyright elements, the broadcast is protected by copyright.

copyright - reproduction

  • The temporary acts of reproduction of a broadcast carried out within the memory of a satellite decoder and on a TV screen fulfill the "temporary copy" exceptions set out in Article 5(1) of the Copyright Directive, and therefore do not require the authorisation of the FAPL.
  • Therefore, there is nothing to stop individuals buying foreign decoder cards for their private use only.

copyright - communication to the public

  • Showing the games in a pub is a "communication to the public", and thus a restricted act requiring the authorisation of the FAPL.
  • Therefore, it seems that the pub landlady, Ms Murphy, may not in fact be able to use her foreign decoder card to show FAPL matches in her pub.

What's next?

The ruling is likely to have major implications for how sports broadcast rights, and potentially all media rights, are sold both in Britain and across Europe in the future. But the cases first have to return to the High Court, and it is now for the High Court to interpret the judgment and to consider how it affects the cases in question.

Morris Bentata is a partner in Sheridans’ Film, TV and Sport Group specialising in sports media rights
Jeremy Roberts is a partner in Sheridans’ Film, TV and Sport Group specialising in the international exploitation of film, TV and sports rights.