On 3 February 2011, Advocate General Kokott delivered her Opinion on a preliminary reference to the Court of Justice of the European Union (CJEU) concerning the legality of the use of satellite decoders purchased outside the United Kingdom to show Premier League football matches in public houses in the United Kingdom.

The AG’s Opinion in joined cases Football Association Premier League Ltd & Ors v QC Leisure & Ors C-403/08 and Karen Murphy v Media Protection Services Ltd C-429/08, which is not binding on the Court, concluded that the territorial exclusive licensing system in question was incompatible with the free movement of services under the Treaty on the Functioning of the European Union. The purchase of a Greek decoder card was payment for the broadcast service, and the purchaser therefore is free under European Law to enjoy that service throughout the European Union. On the facts, the Advocate General could find no justification to restrict this freedom, arguing that territoriality was used purely to optimise value from the exploitation of the rights in question at the expense of the principle of a single European market.

This conclusion will be of concern to right holders currently exploiting their rights on a territorial basis. The AG’s position is likely to have a material adverse impact of the value of rights, where such rights must be sold as a single European package going forward. However, the AG noted that circumstances may exist where partitioning the market may continue to be justified. If followed by the CJEU, the Opinion delivered by the AG might have a huge impact on the wider broadcasting sector, including in relation to film licensing as well as for premium sports content.

The CJEU is expected to hand down its ruling later this year.