Following on from our March 2011 article on exclusive sports broadcasting rights and the protection of so-called “crown jewels”, a recent Spanish decision illustrates the ever-increasing relevance of competition law to the commercial exploitation of sports broadcasting rights.
On 17 March 2011, Spain’s National Competition Authority (the “CNC”) imposed a fine of €500,000 jointly and severally on Mediaproducción S.L. (“Mediapro’”) and its subsidiary Gol Televisión, S.L. (“Gol TV”) for an abuse of a dominant position contrary to Article 2 of the Spanish Competition Act and Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). The CNC found that Mediapro had hindered competition in the market for the resale of the audiovisual rights of the Spanish regular league (La Liga) and the Copa del Rey (King’s Cup) football competitions, as well as in downstream television markets, particularly pay-TV.
In Spain, football teams bargain individually with broadcasters for the right to show matches, unlike, for example, in the UK where the Premier League collectively negotiates on behalf of teams or, at the other end of the spectrum, in Argentina where the TV rights of the Argentinian domestic football league are owned by the government and shown on free-to-air TV, under a plan termed “football para todos” (football for all).
The CNC found that Mediapro, which owns the audiovisual broadcast rights to La Liga and the King’s Cup for all teams in the first and second football divisions (including the rights to the home games of Spanish football giants Barcelona and Real Madrid), enjoys a dominant position in the market for resale of audiovisual broadcast rights of La Liga and King’s Cup matches. Mediapro was also present in the downstream free-to-air TV market through La Sexta and in pay-TV through Gol TV.
In May 2009, the CNC became aware that Mediapro had bundled different packages of broadcasting rights and had invited certain TV operators to present their offers within a short time frame. The CNC also subsequently received a complaint from Canal Satélite Digital, S.L.
The CNC found that certain features in the design of Mediapro’s system for reselling and exploiting the audiovisual broadcast rights for La Liga and King’s Cup football matches were inconsistent with the principles of transparency, objectivity and non-discrimination that must govern the activity of a dominant operator. In particular, the CNC found that Mediapro had hindered competition in the market for the resale of audiovisual broadcast rights by engaging in unjustified discrimination in licensing the use of those rights for the 2009/2010 and ensuing seasons and, as a result, artificially strengthened the creation of a competitive advantage for Gol TV in the downstream pay-TV market. This decision comes at an interesting time for the Spanish football pay-TV market with competition reaching fever pitch and speculation over possible mergers. It also signals the intention of the CNC to bring the Spanish market in line with European precedents, by guaranteeing that tenders for broadcasting rights are objective, transparent and non-discriminatory.