Switching on to broadcasting rights

With the advent of pay-per-view broadcast services, the licensing of television rights for sports events has moved into another orbit.

In the past sports broadcasting was dominated by public service broadcasters, which secured exclusive rights to events such as the European Football Championship and the Olympics, with the aim of encouraging a healthy interest in sports. It was all rather sedate.

Things are different now. Football, in particular, has dominated the debate in recent years, with events organisers such as the English Premier League charging a king’s ransom for broadcasting rights. The power of the industry is caught in a virtuous circle of sorts: the ratings and advertising clout guaranteed by exclusive rights propel broad-casters to pay ever larger amounts to event organisers.

The sudden upheaval in the football broadcasting market has led to some teething problems with antitrust law. Vigilant regulators such as the European Commission have had some tussles with event organisers in recent years.

English Premier League football has been especially problematic. British Sky Broadcasting dominated league rights for 14 years.

Last year, the league was forced to sell rights to more than one broadcaster. It is now bound to sell live broadcasting rights in six equal packages of 23 matches each.

The Commission will be keeping a close eye on compliance. The league backtracked on a provisional agreement brokered with the Commission in 2003. If last year’s commitments are broken, the Commission could issue a fine of up to 10% of the league’s annual turnover.

The battle with the Premier League over broadcasting rights follows similar struggles over the sales practices of the UEFA Champions’ League and Germany’s Bundesliga.

UEFA was targeted by the Commission for its practice of selling all the free and pay-TV rights on an exclusive basis to a single broadcaster per country for periods lasting several years at a time. Under new rules agreed in 2003, small and regional television outlets will have more access to Champions’ League games.

The German Bundesliga case, settled in 2004, ran along similar lines, as all media rights went to one buyer. Clubs are now able to market their home matches themselves and, for example, sell live rights to mobile phone companies.

Sports broadcasting has been widely tipped as a launch-pad for the emerging market of television on phones - mobile TV - but progress has so far been slow. Still the market shows massive potential. Viviane Reding, the European commissioner for media and the information society, is expected to impose a common transmission standard next year.

The Commission’s attention might then turn to competition in European mobile rights markets.

With all the regulatory fuss over traditional broadcast rights in the UK, BSkyB’s hoarding of Premier League mobile rights has gone unchallenged. The broadcaster is poised to offer a new service called 24-7 football, covering all 92 live Premiership matches being shown in the 2007-08 season for £5 (around €7) a month.

With the advent of pay-per-view broadcast services, the licensing of television rights for sports events has moved into another orbit.