ECJ could overturn football's business model if advisor's opinion followed

The way that leagues sell rights to show games on a country by country basis, with the rights in the league's home country attracting a much higher price than elsewhere, represents an attempt to profit from an unlawful restriction of trade, said Advocate General Juliane Kokott.

Advocate General's opinions are not binding on the ECJ but are followed in the majority of cases.

If the ECJ follows Kokott's opinion then it would fundamentally change the football business, said one competition law expert.

"The Opinion could have a seismic impact on how football leagues are financed through the sale of TV rights," said Adrian Wood of Pinsent Masons, the law firm behind OUT-LAW.COM. "If the Court of Justice eventually confirms the Advocate General’s Opinion there will be massive changes to the ways in which broadcast rights for national league football matches are sold."

Kokott's opinion relates to a number of cases that were heard together in which the Football Association Premier League (FAPL), which operates English football leagues, took action to stop pub owners showing English games via legitimately bought Greek satellite television services, rather than UK ones.

"There is no specific right to charge different prices for a work in each Member State. Rather, it forms part of the logic of the internal market that price differences between different Member States should be offset by trade," she said in her opinion. "The possibility, demanded by the FAPL, of marketing the broadcasting rights on a territorially exclusive basis amounts to profiting from the elimination of the internal market."

Kokott said that FAPL's selling of rights on a country by country basis with the demand in licence agreements that countries block people in other countries from receiving signals was a breach of EU competition law.

"Such licence agreements are liable to prevent, restrict or distort competition. They are therefore incompatible with Article 101(1) [of EU constitution the Treaty on the Functioning of the European Union]," she wrote.

Kokott said that the FAPL was right to say that it had the right to charge for the material that it owned distribution rights for, but that since the Greek decoder cards were paid for, this did not undermine its right to exploit the football games.

"The Opinion is anchored on basic but fundamental principles of EU Law, namely that there should be no unjustifiable restrictions on the ability of consumers or businesses to purchase important goods and services wherever they choose," said Wood. "The protection of contractually enforceable intellectual property rights in this case was found not to outweigh the rights purchasers have under EU Law to shop around for the best price."

Wood said that, if followed, the ruling could lead to a compete reworking of the financial basis of the football business across Europe.

"A prohibition on the exclusive territorial distribution of TV broadcasting rights inevitably raises the prospect that broadcasting rights for sporting events may have to be sold on an EU-wide basis," he said. "This in turn may lead to the concentration of such rights in the hands of a select small number of broadcasters that have the commercial clout to purchase the rights in the first place."