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European Commission Confirms Validity of Exclusive Broadcasting Rights Agreements

View profile for Stephen Hornsby
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In its Green Paper entitled “Preparing for a fully converged audio visual world” published in the Spring of this year, the Commission gave its gloss on the famous FAPL judgment of the European Court of Justice (Judgment of 4 October 2011). The Court’s judgment had cast doubt on the validity of exclusive broadcasting agreements on the basis that remuneration in the form of an exclusivity premium wasn’t a legitimate exercise of rights and that the remuneration for the licence holder had to be reasonable in relation to the economic value of the service provided. Naturally this statement was one that caused intellectual property lawyers considerable concern because it would seem to make the enforceability of exclusive broadcasting agreements depend upon price assessments. However, there were other sections in the judgment which did not deny the potential existence of intellectual rights property protection for exclusive agreements even where different prices are charged. This naturally caused confusion.

The conflict between these two sections of the judgment would appear to have been reduced by the statement in the Green Paper that “EU Competition Law does not preclude a right holder from granting to a single or licensee exclusive broadcasting rights over a sporting event in one or more member states”. The Commission then went on to say that rights holders cannot prohibit the exclusive licensee from effecting any cross-border provision of services that relate to the broadcasting of such an event. This is in line with long standing authority prohibiting export bans – in this case the ban on the sale of decoder cards by the licensee which would facilitate the re-transmission of English football matches in pubs where such matches were only licensed for broadcast in Greece.

The vexed issue of the exclusivity premium is ignored by the Commission. However it would seem that those commentators who have argued that exclusive rights are no longer valid where a premium is charged have not the support of an authoritative opinion from the Commission on what judgment actually means. This is undoubtedly going to be some considerable comfort to practitioners.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 020 7404 0606 and ask for your usual Goodman Derrick contact.