Sporting Rights Will Be The Next Major Earthquake Shaking Up Football
“Where there’s passion, there’s profit” was a phrase coined by Alex Fynn, the original architect of what would become the UEFA Champions League competition back in 1992. How right he was.
No one could have predicted the spectacular success and financial growth of the competition all those years ago with Europe’s 32 leading clubs battling it out in the group stages of an annual journey that will end with the champions being crowned.
Media rights are at the core of this financial success, of course. UEFA, the governing body of European football, has told me that rights make up around 80% of all the revenue that the organisation secures. From an era in the early 1990s where rights meant purely television – ITV had the exclusive UK contract in those days – we’re now in a digital era where rights management for sports event has become much more complex.
In an era of streaming and ubiquitous access to digital content, policing the intellectual property from live coverage has become integral to rights holders’ business models. They’re up against increasingly tech savvy fans who are only interested in seeing live sport, wherever and whenever they can – not to mention media organisations seeking new ways to satisfy them. Consequently both in football and elsewhere, some of the most interesting battles are no longer taking place on the field.
Recent 2015 flashpoints include the Rugby World Cup, where there will be no accredited journalists from News Corp Australia, Fairfax Media or Australian Associated Press. They couldn’t agree with the organisers on the amount of video content they would be allowed to carry on their websites, claiming that the restrictions meant they would be unable to offer their own audience the level of 24/7 mobile multi-platform coverage that they would expect.
Over in PGA golf, American golf journalist Stephanie Wei’s media accreditation was withdrawn for the rest of the season back in May because she used her Twitter feed to Periscope golfer Jordan Spieth during a practice round (for the uninitiated, Periscope is a live DIY video broadcast platform). The PGA said it owned all video rights for the entire week of the event, not simply the actual tournament.
Technology has also famously caused headaches for sports organisations who have packaged rights by territory. The modern classic was the case of Karen Murphy, the pub owner from Portsmouth in England who challenged the FA Premier League and its exclusive territorial rights arrangement with Sky Sports in 2005. Fed up with what she saw as Sky’s high prices, she had purchased a subscription with Greek broadcaster Nova, who had the Greek rights to screen English games. Having imported a Greek decoder and card, she broadcast Nova’s coverage in her pub. The Premier League duly took her to court.
The case ended up before the European Court of Justice (ECJ) in 2011, which accepted Murphy’s argument that she was entitled under EU competition law to purchase a subscription from another member state. The case was then referred back to the UK High Court, which upheld the European ruling but also noted that Murphy’s broadcast infringed the copyright restrictions that applied to elements such as graphics, logos and music, all of which belonged to the Premier League.
This has meant that the impact of the ECJ decision has not been as great as some feared (and others hoped). Contracts were rewritten, forcing foreign rights holders to only broadcast in their own language and heavily restricting the number of games that they could show at 3pm UK time, the time when pub customers would expect to catch a game. Numerous pubs broadcasting foreign Premier League streams have also been prosecuted for breaching copyright for the reasons outlined in the Murphy case.
Of more recent interest has been EU proposals published in May that intend to outlaw the geo-blocking of content across the EU by the end of 2016. This will potentially prevent the likes of UEFA from selling rights country by country, which would be a huge change to the status quo. If for example YouTube acquired the exclusive rights for a sports event, it would need to make them available to users across Europe.
As you can imagine, this has prompted discussions between various sports rights holders and the European Commission. Watch this space for announcements in the coming months, which may yet see the proposals watered down. Instead of only selling pan-European rights, one lesser option that I understand has been on the table is “portability”. This would mean that if I had a British pay-TV football subscription, Sky or BT would have to enable me to watch online while travelling in other countries. Under such a scenario, rights might still be sold country by country after all.
While there are surely pros and cons to this kind of more modest change, it is worth bearing in mind one legacy of past EU interventions into the sports rights market, such as breaking up Sky’s monopoly of English Premier League games in the UK in 2005. The EU had started out with the intention of increasing competition, but this ironically pushed up the cost of viewing for fans. And the ECJ’s Murphy decision led to the 3pm games restriction, which lessened the range of games available to viewers in Europe. Whatever the downside of the status quo, it has its consolations too.