English Premier League Loses Match in European Court

This week, the European Court of Justice (ECJ) handed down a hotly anticipated ruling in Football Association Premier League v. Murphy, et al. The case pitted the English Premier League (EPL), the highest tier of club soccer competition in England, against, among others, Karen Murphy, a Portsmouth-area pub owner. Why would a billion-dollar sports juggernaut be bothered to take a smalltime Portsmouth publican to court? As it turns out, a simple piece of satellite technology was at the heart of the potentially groundbreaking case.

Murphy had installed a Greek satellite company’s decoder card in her pub’s satellite TV system, allowing her access to the Greek telecasts of EPL games. As a result, her pub could show live soccer games at three in the afternoon–something other pubs, subscribing to English broadcast rights-holders Sky Sports and ESPN, could not offer. Sky/ESPN are obligated by their license with the EPL to black out EPL games played from 3-5 PM, a practice aimed at keeping fans in the stadiums instead of the bar stools and sofas across England.[1]

In addition to depressing attendance at matches, the use of foreign decoder cards strikes at the very foundation of the EPL’s broadcast business model: using a foreign decoder allows pub owners to get access to their soccer content at a fraction of the cost of domestic decoder. A public display subscription to domestic service costs a pub about $747 per month, whereas a subscription to NOVA (the Greek satellite provider) costs a fraction of that amount, about $184 per month. The ability to charge English subscribers a premium for their own domestic content has allowed the EPL to sell its domestic broadcasting rights for about $1 billion a year.[2]

This week’s ECJ ruling cut to the core of this business model: they ruled that the national law that made the use of such foreign decoder cards illegal was “contrary to EU law” in that it hindered a “completion of the internal market” for goods or services. Publicans like Ms. Murphy can thus no longer be stopped from (or fined for) ordering and using foreign decoders in their satellite receivers. They furthermore ruled that the EPL cannot circumvent these rules by inserting terms into their license agreements which would prevent broadcasters from selling decoders outside of their licensed territory. The scheme by which the EPL and its partners were able to extract a premium from English subscribers, according to the court “cannot be regarded as forming part of the appropriate remuneration” that rights-holders are due. In yet another potential blow to the EPL (and sports leagues throughout Europe), the court said (in what is likely dictum) that the EPL “cannot claim copyright in the Premier League matches themselves, as they cannot be classified as works” within EU copyright law. The ECJ said that only the anthem, on-screen logos, and other visual elements added by the EPL could constitute copyrightable works.

So what is the EPL to do? Its whole raison detre is to leverage the value of bundling the broadcast and sponsorship rights to top-flight English soccer and offer them to the highest bidders. The League took some comfort in the ECJ’s finding that the unique visual elements that the EPL tacks onto its broadcasts are subject to copyright protection. As a practical matter, this seems to be rather slight solace: once it is legal for the bartenders to buy and use these decoders in their pubs, preventing them from showing the part of the broadcasts that feature the League anthem or the League’s iconic logo seems like a chore indeed. As a legal matter, it would seem rather illogical for the EPL to be able to circumvent competition law by copyright protection what it cannot get through contract. As soccer commentators are apt to say in a close match, there is still “all to play for,” as the English court on remand might take a more favorable stance on the copyright issue and thus give the EPL the result they seek.

[1] Not unlike the NFL’s practice of blacking out games in local markets when a team fails to sellout a home game.

[2] By way of an American comparison, the NFL’s domestic broadcasting contracts bring the league a little over $3 billion a year.

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