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Games without frontiers

14 July 08

The legal framework governing broadcasting rights for major sporting events, the prospects for change and the competing interests at stake

by James McDougall

The UK Government is currently under attack over “listed” sporting events. Commonly referred to as the “Crown Jewels”, they are those excluded from pay-TV-only deals.

Whereas UEFA is challenging the inclusion in the list of all matches in the UEFA Championship Finals, Alex Salmond has said that it is “extraordinary and unacceptable” that Scotland’s World Cup qualifying matches will not be broadcast on free-to-air television; and the “Keep Cricket Free” campaign is lobbying for English test matches to return there. This article focuses on the first two of these issues.

The last review of listed events was in 1998, although there has been a list in existence since 1956. It is commonly understood that listed events must be broadcast on free-to-air television. Although this is not technically correct, Part IV of the Broadcasting Act 1996 effectively prevents pay TV companies from obtaining exclusive rights to broadcast listed events and enables the main free-to-air broadcasters to obtain broadcasting rights for a much lower sum than pay TV companies would otherwise be willing to pay. The result is that listed events are shown on free-to-air TV. This increases the events’ exposure but generally reduces the revenue produced. The purported aim is to make major events accessible to all without additional payment.

Qualifying for the list

Part IV grants a significant amount of discretion to the Secretary of State. Section 97(2) empowers him to “draw up, revise or cease to maintain” a list, and the only requirement before doing so is to consult TV regulators and rights holders. Section 97(1) defines a listed event as “a sporting or other event of national interest”. “National interest” includes interest within England, Scotland, Wales or Northern Ireland (s 97(4)).

The Act provides no other guidance as to how to determine whether or not an event should be listed. In 1997, however, the government published criteria, the key passage of which states that “the event should have a special national resonance, not simply a significance to those who ordinarily follow the sport concerned; it [should be] an event which serves to unite the nation; a shared point on the national calendar”. Thus, it is often said that in order to be listed, an event must have national resonance.

Following the publication of the criteria, an advisory committee chaired by Lord Gordon of Strathblane was asked to consult with relevant bodies and make recommendations concerning revision of the existing list. The committee proposed scrapping listing on an all-or-nothing basis, and suggested, in effect, two lists. Events which were deemed to meet all of the criteria would be designated “group A” events, in respect of which live coverage would be protected; those which either met some of the criteria, or met all of the criteria but presented “scheduling difficulties”, would be designated “group B” events, in respect of which only highlights would be protected. The committee recommended eight events for group A and 13 for group B.

The then Secretary of State, Chris Smith (now Lord Smith of Finsbury) accepted the principle of the two tier framework, but not all the content recommendations. In relation to the FIFA World Cup Finals and UEFA Championship Finals, the Gordon Committee suggested that only the latter stages, and matches involving the home nations, should be included in group A. The minister decided, however, to list all finals matches of both tournaments in group A but to leave out qualifying matches completely.

Into Europe

UEFA is unhappy at the inclusion of the whole UEFA Championship Finals because it means that it cannot sell the UK rights for the tournament to a pay TV broadcaster. It is therefore seeking to annul a decision by which the EU Commission declared that the UK’s listing of the entire finals was compatible with Community law. The Commission decision was made under the Television without Frontiers Directive, recently replaced (with no major changes in relation to listing of events) by the Audiovisual Media Services Directive.

The TVWF Directive, enacted in 1989, aimed to provide a framework to facilitate the free movement of television broadcasts (see Fleming, “Television Without Frontiers”, Ent LR 1997, 8(8), 281-285). It was amended in 1997, to protect listed events at the European level. In particular art 3a required member states to ensure that broadcasters under their jurisdiction did not exercise exclusive rights so as to circumvent the protections afforded to another member state’s list.

Article 3(a) did not require a member state to list events (Weatherill, “The sale of rights to broadcast sporting events under EC law”, ISLJ 2006, 3/4, 3). If a member state opted to do so, however, the list had to be drawn up in “a clear and transparent manner” (art 3a(1)), and the measures taken notified to the Commission. It also obliged the Commission to “verify that such measures are compatible with Community law”.

The UK notified the Commission of the measures it took under art 3a in May 2000 – including the passing of Part IV of the 1996 Act and the subsequent listing of group A and group B events discussed above. The Commission approved the measures later that year, but this decision was annulled by the Court of First Instance on the basis that the procedure adopted was flawed (Infront Wm AG v Commission [2005] ECR II-5897, discussed by Morgan and Purssell, “UK listed events finally approved” SLA & P 2008, Feb, 1-3). The measures were re-approved by the Commission in November 2007. It is this decision that UEFA is challenging.

Grounds for complaint?

UEFA is basing its case on the argument that matches not involving British teams cannot be considered to be of major national importance in the UK and that their inclusion is therefore a disproportionate distortion of EU competition law. It is also arguing that the UK did not adopt “a clear and transparent procedure”. UEFA can point to the fact that of the eight member states that have notified the Commission under the TWF Directive, Belgium and the UK are the only ones to include the tournament as a whole (Morgan and Purssell). Also, listing occurred in the aftermath of the highly successful Euro 96 tournament which took place in England and undoubtedly had much greater national resonance in England than tournaments hosted elsewhere.

On the other hand, the preamble to the directive specifically refers to the tournament (along with the FIFA World Cup and the Olympic Games) as being the sort of event that art 3a was designed to protect. Also, as Weatherill points out, art 3a leaves member states with much discretion. It is tentatively submitted, therefore, that UEFA is unlikely to win this case, although it may succeed in applying pressure on the government to revise the list.

Alex Salmond’s complaint is not expressly about the list as such. Rather he has pointed out that, as broadcasting is a reserved matter, the Scottish Government is unable to do anything about the absence of Scotland’s World Cup qualifying matches from free-to-air television. Of course, this issue would not have arisen if the UK Government had listed qualifying matches. The Secretary of State decided they should not be listed in either group A or B, on the premise that whilst some qualifiers have national resonance, others do not, and it would be impractical for commercial reasons to list some qualifying matches and not others.

In fairness to the minister, in the years preceding the 1998 review Scotland along with England had a good record of qualifying for major tournaments, but Northern Ireland last qualified in 1986 and Wales’ last success was in 1958! Further, since the review no home nation, apart from England, has qualified for any major football tournament finals. It could therefore be said that the government has equally ignored the rest of the UK in relation to national football (and arguably other sports too, for example rugby union).

Other side of the coin

What effect the First Minister’s comments have, remains to be seen. It is highly unlikely that the UK Government will ever devolve broadcasting, given its importance in shaping national opinion and forging national identity, and even if it did, the SFA would be likely to oppose listing because of the resultant loss of revenue. The UK Government has said it will review the list by 2009, in time for the completion of digital switchover in 2012. Extending the list to include European and World Cup qualifying matches and English test matches would be popular with voters. On the other hand, sports bodies are generally against listing because of the financial implications. Further, the key player in pay TV is BSkyB, and Gordon Brown will not wish to upset that organisation or the closely linked Sun newspaper in the runup to the general election. Therefore the Crown Jewels will probably remain unchanged for a while yet, unless it is to delist matches in the FIFA World Cup Finals and UEFA Championship Finals which do not involve home teams.

James McDougall is a lecturer in law at Napier University, Edinburghg