On request of the television channel BeIN Sports, the French Competition Authority (“FCA”) on July 30, 2014 announced the suspension of rival Canal+’s exclusive five-year deal with France’s national Rugby Union league (“LNR”) for coverage of first division or “Top 14” matches over the next five seasons.
The FCA’s ruling will come into effect after the 2014-15 season so as not to cause problems for this year’s Top 14 championship. However, the Authority has ruled that bidding for the rights for the remaining four seasons must be re-opened by January 31, 2015 for a new competitive tender under transparent and non-discriminatory conditions.
On January 14, 2014, Canal+ was granted by the LNR the exclusive rights to Top 14 matches for the next five years. This grant followed a dispute with the LNR over the latter’s decision to open up the rights to the 2014-18 seasons to a new round of competitive bidding in order to secure a better return than that provided under the pair’s existing contract.
Canal+ responded at the time by filing several legal actions, including one before the Paris Tribunal de Grande Instance, to have the competition suspended. Although the League at first deplored these actions as being a strategy of intimidation, the LNR nevertheless withdrew its call for tenders prior to any legal decision and three days before the deadline for submission of bids, and awarded the rights once again to the leading French sports channel for some € 355 million. However, Canal + agreed to pay € 71 million per year, whereas it had only paid € 31.7 million per season since 2011.
BeIN Sports then filed a complaint with the FCA in March 2014 about the conditions under which the rights had been awarded. According to BeIN Sports, the Canal + agreement with LNR was anticompetitive pursuant to Articles L. 420-1 and L. 420-2 of the French Business Code and constituted an abuse of dominant position by Canal + under Article 102 of the TFEU.
The FCA thoroughly reviewed the French pay TV market, the parties’ positions in terms of sports broadcasting and the procedure leading up to the LNR/Canal+ deal. The FCA concluded that this “agreement and the way in which it was negotiated and entered into may reveal an anticompetitive agreement.” The FCA also considered the situation likely to be “detrimental to the development of BeIN Sports, the only newcomer likely to enhance competition in pay TV sports programs”.
According to the FCA, a transparent and non-discriminatory competition is more necessary than ever. The rights to the Top 14 games can be described as “premium rights”, just like those to soccer matches or the Olympics: they generate large audiences, play a significant role in the competition between channels, are a real driving force for subscriptions and their value has risen significantly. For these reasons, the FCA found the award of the Top 14 rugby rights must be subject to a transparent and non-discriminatory competitive bidding process.
In consequence, noting “a serious and immediate threat to the field of pay television and to the interests of consumers, as the award for five years of all the rights of the Top 14 to Canal + would effectively reserve this championship to viewers who can pay a 40 euro per month subscription [that of Canal +] and would partially obliterate these broadcasts to consumers interested in a cheaper subscription close to 12 euros per month” [that charged by BeIN Sports], the FCA, pending its decision on the merits, ordered Canal + and the LNR to suspend the agreement concluded on January 14, 2014.
Although the LNR has appealed the FCA’s decision, this is another victory for BeIN Sports in the competition over sports rights with Canal +. Some two months ago, the Commercial Court of Nanterre had found that the Qatari sports channel BeIN Sports did not engage in unfair competition against the French TV channel Canal + by charging lower rates for its subscriptions.