Originally, the EU had no role on sporting affairs, and there was no need for it. However, the Lisbon Treaty has given the EU a new competence on sport. Sport is one of the areas where the Member States should have exclusive competence. But he EU has now competence for co-ordinating sports policies.
The Commission has been stressing, “sport activity is subject to the application of EU law” as “competition law and Internal Market provisions apply to sport in so far as it constitutes an economic activity.” According to Commission “sport has certain specific characteristics” however “it cannot be construed so as to justify a general exemption from the application of EU law.” Obviously, the Commission, and ultimately the ECJ, decide whether sporting rules are compatible with EU law.
In fact, the ECJ has recently given its ruling in case C403/08 Football Association Premier League Ltd and Others v QC Leisure and Others and Case C429/08 Karen Murphy v Media Protection Services Ltd. The preliminary reference cases concern whether territorial exclusivity agreements relating to the transmission of football matches are contrary to EU law.
The Premier League exploits the copyright for the live transmission of its football matches. It sells exclusive TV rights to broadcasters on a territory basis, which are granted for three years. In order to preserve this exclusivity, licensees must prevent their broadcasts from being able to be watched outside their respective broadcasting areas. They are, therefore, required to transmit their satellite signal in encrypted form to subscribers within their allocated territory. Then, subscribers can decrypt the signal using a decoder card. However, this exclusivity has been circumvented as foreign decoder cards have been used in the UK to access foreign satellite transmissions of live Premier League football matches.
Undertakings have been importing decoder cards from Greece into the UK and sell them to pubs at better prices than the UK’s broadcasters. The Premier League complained that the use of such cards in the UK constitutes an infringement of its rights under the provisions of national law intended to implement Directive 98/84 on the legal protection of services based on, or consisting of, conditional access and of the copyright law.
The ECJ has ruled that measures to enforce exclusive broadcasting rights infringe the European Union’s fundamental freedoms and competition law. The ECJ considers that territorial exclusivity agreements relating to the transmission of football matches are incompatible with EU law. The ECJ held that the above mentioned measures constitute a restriction on the freedom to provide services that is forbidden by Article 56 TFEU and “cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums.” Hence, it is not possible to forbid the live transmission of Premier League football matches in pubs by means of foreign decoder cards.
The ECJ concluded, therefore, that Article 56 TFEU “precludes legislation of a Member State which makes it unlawful to import into and sell and use in that State foreign decoding devices which give access to an encrypted satellite broadcasting service from another Member State that includes subject-matter protected by the legislation of that first State;” Moreover, according to the ECJ this conclusion is not affected “by the fact that the foreign decoding device has been procured or enabled by the giving of a false identity and a false address, with the intention of circumventing the territorial restriction in question,” or “by the fact that it is used for commercial purposes although it was restricted to private use.”
The High Court has to decide the cases in accordance with the ECJ’s decision, which is binding on it as well as on other national courts before which a similar case is raised. The ECJ’s ruling is good news for the owners of British pubs, but it would have far reaching consequences for the Premier League and Sky. The Premier League would no longer be able to sell TV rights on a territorial exclusivity basis. In fact, this ruling would have an impact on the way TV sports rights are sold within the EU, as undertakings providing decoder cards may broadcast football matches being filmed in any Member State’s league.
One could say this is a domestic issue, and consequently Brussels should not interfere. As Emma McClarkin, said, "National leagues should be subjected to national rights agreements. Sport is a very specific sector and not all EU single market law recognises that.” She stressed, “This ruling certainly fails to recognise the specificity of sport.” Moreover, Emma McClarkin noted, “This ruling will have a significant impact on the funding of grassroots sports. Money from television rights is funnelled back into developing the stars of the future, and I fear that this ruling will have detrimental effects on our national teams.”
