WRITTEN QUESTION E-2664/02

by Robert Goebbels (PSE) to the Commission

(23 September 2002)

Subject: Neutral effect of competition law on the live broadcasting rights to sports events

In his reply given on behalf of the Commission and dated 31 July 2002 to my Written Question E-1912/02(1), Commissioner Monti said that the Commission wished to ensure that live broadcasting rights to sports events were not sold in a way that harms competition on media markets and which, as a consequence, harms viewers. In the application of competition law, the Commission does not give any preferential treatment of the market for pay-TV over the market for free-TV. This law of the jungle approach clearly favours pay-TV channels which have more financial clout when it comes to acquiring broadcasting rights, and football provides us with the best example of this situation.

However, most of the football clubs that reap huge financial rewards from the broadcasting of matches organised by UEFA or FIFA play in stadiums paid for by the State or by local authorities which frequently grant them substantial subsidies. Should not Community legislation on state aids also apply to the business activities of these clubs? If not, and assuming that top-level sport is an aspect of society which justifies the commitment of public funds (if only so as to ensure security at events of this nature), should not sports associations be subject to a public service obligation with regard to broadcasting rights? In the final analysis, is it acceptable that only viewers who can afford to meet the financial demands of the private pay-TV channels should be able to watch sports events which could not take place without generous aid from the public purse?

(1) OJ C 92 E, 17.4.2003, p. 115.

Answer given by Mr Monti on behalf of the Commission

(12 November 2002)

The Honourable Member questions whether Community legislation on competition should apply to the business activities of football clubs that play in tournaments organised by the Union of European Football Associations (UEFA) or the International Federation of Football Associations (FIFA). Actually, any entity that performs an economic activity is subject to competition law in general, and to the rules on state aid in particular. Football clubs that perform these activities are therefore subject to state aid rules.

However, the financing of a stadium by local authorities does not necessarily constitute state aid. Under certain conditions, the construction of a venue for public events for different categories of activities may be considered as funding for general infrastructure and will not come under the provisions of Article 87(1) of the EC Treaty.

The Commission notes that with regard to entrusting an undertaking with a public service obligation, it is not the Community but the Member State itself that both assigns to an undertaking such an obligation as well as defines its scope. Accordingly, if the Member State feels it is necessary that football should be widely accessible, rather than only by Pay TV, it may entrust broadcasting companies with this task, and where necessary, provide the compensation needed to perform these tasks.

In addition, Directive 97/36/EC of the Parliament and of the Council of 30 June 1997 amending Council Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities(1) provides that Member States may take measures to ensure that broadcasters do not broadcast events which are regarded as being of major importance for society, in such a way as to deprive a substantial proportion of the public of the possibility of following such events on free television. Several Member States have adopted such lists which include in all cases some football matches (a summary of the measures taken was published in the Official Journal(2)).

(1) OJ L 202, 30.7.1997.

(2) OJ C 189, 9.8.2002.