It will be well known to the readers of this blog that media companies will pay eye watering amounts of money for the rights to broadcast major sporting events. It is reported that the most valuable of these deals are as follows:

  1. $5.3 billion per year for the NFL.
  2. $2.7 billion per year for the English Premier League
  3. $2.6 billion per year for the NBA.
  4. $1.5 billion per year for Major League Baseball; and
  5. $740 million per year for the NCAA, the National Collegiate Athletic Association.

It is no surprise then that rights holders are fiercely protective of their acquisitions.

Reports have emerged down under that Sky Network Television (“Sky”), the pay-tv broadcaster in New Zealand, is taking legal action in the New Zealand High Court against several popular media outlets including, TVNZ, the public service broadcaster, Fairfax Media and New Zealand Media & Entertainment, publishers of various titles including New Zealand’s biggest selling newspaper the New Zealand Herald. The action is in respect of Sky’s rugby coverage which includes Super Rugby, the Rugby Championship and all of the All Black’s home internationals. Sky has said:

Very substantial, and in our view totally unacceptable amounts of Sky footage are, at times, being used in news programmes. For example sometimes up to 10 minutes in a 45-minute programme.”

“Sky has paid very substantial amounts to win rugby rights in a competitive process, on an even playing field with TVNZ and other media outlets. Sky accepts and embraces the statutory recognition of fair dealing for reporting current events, we simply do not accept that fair dealing allows our investment in rights to be devalued.”

Sky’s action follows its failed attempt to obtain an injunction in respect of allegations that Fairfax Media was infringing its Olympic broadcast rights albeit the injunction was only refused after Fairfax agreed to disable the feature which enabled Sky’s content to be viewed.

If a similar claim was to be brought in England and Wales there is clear authority on this issue which can be drawn from the recent case of England and Wales Cricket Board and Sky UK Limited v Tixdaq Limited and Fanatix Limited [2016] EWHC 575 Ch.

In this claim the ECB and Sky UK, which owned the rights to ECB organised test matches, brought a claim against the owners of a website and app where 8 second clips from Sky UK’s broadcast of England’s test series against New Zealand, including its post-match analysis, could be viewed and shared with others.

Pursuant to s.16 of the Copyright Designs and Patents Act 1988 (“CDPA”) copyright in a work is infringed by doing a restricted act “in relation to the work as a whole or any substantial part of it”.

In the circumstances the Claimants alleged copyright infringement on the part of the Defendants in respect of the content it had made available on its digital platforms. The Defendants in turn relied upon the ‘fair dealing’ offence afforded by s.30(2) of the CDPA to those using copyright material “for the purpose of reporting current events” and the mere conduit / host defence afforded by Regulation 19 of the Electronic Commerce Regulations 2002 (SI 2002/3012) (“the E-Commerce Directive).

In a typically detailed judgment, Mr Justice Arnold held:

  1. Given the clips invariably showed highlights of the match, such as wickets or appeals, the Defendants were benefitting from the rights and content paid for by Sky UK. This in turn led Arnold J to conclude that the qualitative value of the clips was such that the Defendants were, importantly, infringing a “substantial part” of the broadcast.
  2. Whilst match footage from the test match may be a “current event” for the purposes of s.30(2) of the CDPA, the interviews and post-match analysis were not. Arnold J ruled that the Defendants were not genuinely concerned with reporting current events rather they wished to exploit commercially the copyright material to drive traffic to its platforms.
  3. Because of the above findings, in particular the conflict with the Claimants’ licensing of a ‘highlights package’, the Defendants could not rely upon the defence of ‘fair dealing’.
  4. The mere conduit / hosting defences were not available under the E-Commerce Directive as the clips were stored as well as transmitted and were often subject to editorial review and posted by the Defendants’ employees.

Whilst Arnold J was clear as to his findings in respect of these commercial Defendants he also commented that individuals who took footage at the matches and uploaded them onto their own Twitter accounts may well be able to benefit from the defence of ‘fair dealing’ even if they happen to include a ‘substantial part’ of the work in question.

For a detailed analysis of the Tixdaq case please see here.

If the New Zealand Courts were to follow the reasoning of Arnold J in the Tixdaq case (both are common law jurisdictions) one could well foresee difficulties for those media outlets seeking to exploit Sky’s highlights for their own commercial gain.

What is clear from both the above cases is that given the huge sums of money invested, media rights holders are prepared to take legal action to prevent their unauthorised exploitation and that in doing so there remains myriad issues for them to consider.