Notice published pursuant to Article 19(3) of Council Regulation No 17 concerning case COMP/C.2/38.173 and 38.453 - joint selling of the media rights of the FA Premier League on an exclusive basisText with EEA relevance
Date: 2004-04-30
Institutions: European Commission
Subjects: United Kingdom, professional sport

30.4.2004

EN

Official Journal of the European Union

C 115/3

Notice published pursuant to Article 19(3) of Council Regulation No 17 concerning case COMP/
C.2/38.173 and 38.453 - joint selling of the media rights of the FA Premier League on an exclusive
basis

(2004/C 115/02)

(Text with EEA relevance)

1. THE NOTIFICATION

1. The Football Association Premier League Limited (FAPL) is a
private limited company incorporated in 1992 and registered
in the United Kingdom register of companies under company
number 02719699. Its registered office is in London. The FAPL
is governed in accordance with its Articles of Association and
the Rules and Regulations adopted by it. The shareholders of
the FAPL are those clubs which from season to season partici-
pate in the FA Premier League.

2. The Board of the FAPL comprises a Chief Executive and
non-executive Chairman, both of whom are appointed by a
resolution of the clubs in general meeting. The powers of the
Board are governed by the Articles of Association. Article 48
limits the power of the Board to enter into any broadcast
contract without the prior approval by resolution of the clubs
in a general meeting (1). A resolution of the clubs requires two
thirds of the votes cast.

the

into

joint

selling

investigation

3. On 23 June 2001, the Commission opened an own initia-
tive
arrangements
surrounding the FA Premier League competition. After contact
with the FAPL, the latter notified its arrangements on 21 June
2002. The FAPL applied for a negative clearance under Article
81(1) of the EC Treaty or, failing this, an exemption under
Article 81(3) of the EC Treaty in respect of its arrangements for
the joint selling of the media rights of the FA Premier League.
The media rights are sold by the FAPL on behalf of those clubs
which are, from time to time, its members. The FAPL is there-
fore an association of undertakings, and action taken in relation
to the media rights is therefore a decision of an association of
undertakings.

2. The Statement of Objections

4. The notified arrangement provides that the FAPL is granted
the exclusive right to sell the media rights of the FA Premier

(1) Article 48 of the Articles of Association of the FAPL provides that:
‘The Board shall not in relation to any dealings relating to television,
broadcasting, sponsorship or like transactions or other matters
materially affecting the commercial interests of the Members enter
into any contract or agreement or conduct themselves in any way
as would bind the FAPL to any contract or agreement without the
prior authority or approval by Resolution of the Members.’

League. This prevents clubs from taking independent commer-
cial actions regarding the exploitation of these rights. Conse-
quently, the FAPL negotiates and concludes contracts pertaining
to the exploitation of the media rights of the FA Premier
League.

5. In December 2002 the Commission issued a statement of
objections addressed to the FAPL. The statement of objections
analysed the horizontal agreement to sell rights jointly, and the
manner in which that agreement was implemented in practice.

6. The arrangements restrict competition in the upstream
markets for the acquisition of media rights of football. These
markets are closely linked with the downstream markets on
which those rights are used to provide services to consumers.
The most commercially important of these markets are the tele-
vision markets, where,
free-TV broadcasters
compete for advertisers and pay-TV broadcasters compete for
subscribers: the restrictions therefore affect the downstream
markets as well. Football has proven to be a driving force not
only for the development TV services but is also an essential
programme item for free TV broadcasters.

for example,

7. The statement of objections stated that any possible efficien-
cies and benefits that joint selling could provide in the media
markets were negated by the commercial policy pursued by the
FAPL. This is because the joint and exclusive sale of large
packages of media rights created barriers to entry, various
restrictions on the output of the FAPL limited the development
of products and markets, and generally the sales policy led to
foreclosure on downstream markets. The restrictions therefore
led to further media concentration and hampered competition
between media operators.

8. On 18 March 2003, the FAPL submitted its formal reply to
the statement of objections, denying that the arrangements
restricted competition on any market.

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Official Journal of the European Union

30.4.2004

9. Several third parties asked and were admitted as interested
third parties to the proceedings. Several others also submitted
observations on the notified arrangements. These observations
added no new arguments in favour of the notified arrangement
to those submitted by the FAPL in its notification. These relate
essentially to solidarity, the social and economic aspects of
sport, and the balance in sport competition between rich and
poor clubs and associations. Some third parties argued,
however, that the solidarity measures were currently insuffi-
cient and should be improved, were an exemption to be
granted. Other third parties argued that although joint selling
was an efficient means to sell some products, the importance
of the FAPL on various media markets meant that in practice
the joint selling had negative consequences on those markets.

10. Notwithstanding the FAPL's belief that the arrangements
did not restrict competition, the Commission and the FAPL
began settlement discussions following their reply to the state-
ment of objections. This led to a number of changes being put
in place in June 2003. The FAPL presented a preliminary
outline of a possible new commercial policy, including a new
rights segmentation table for the exploitation of all media
rights of the FA Premier League,
including radio, television,
Internet, and UMTS, and physical media rights (such as DVD,
VHS, CD-ROM, etc.).

scope of the present Notice and were part of a separate consul-
tation exercise with potential buyers of those rights.

3. The Revised Rights Proposals

14. The revisions to the FAPL joint selling arrangements will
take effect in two stages. The first, already largely implemented,
apply to the rights for the 2004 to 2007 seasons. The second
stage begins with the tender process for the 2007 season
onwards.

15. In respect of all of the rights packages exploited centrally
by the FAPL, in the event that any rights packages are not sold
by the FAPL, or are sold but core rights remain unexploited,
the rights will revert to the clubs for individual exploitation.

3.1. Television broadcasting rights

General Principles

11. This was followed in July 2003 by the FAPL issuing an
invitation to tender for a number of media rights for the 2004
to 2007 seasons, most notably four packages of live TV rights,
all four of which were ultimately won by BSkyB.

16. The FAPL will award the TV rights of the FA Premier
League following a public invitation to broadcasters to bid. The
TV rights contracts shall be concluded for a period not
exceeding three FA Premier League seasons.

12. The Commission raised certain concerns about the rights
that were offered, as well as the conduct and the outcome of
the tender procedure. Further settlement discussions took place
in the second half of 2003, culminating in a provisional agree-
ment involving commitments from both the FAPL and BSkyB
in December 2003.

13. The present notice invites comments on the commitments
offered by the FAPL, which were designed to address the
Commission's concerns set out in the December 2002 state-
ment of objections. The commitments offered by BSkyB
address the separate concerns resulting from the bid and award
of the live TV packages to BSkyB. As such they fall outside the

17. The FAPL maintains that there is a need to maintain a
certain number of matches on Saturday afternoons, to maintain
the traditional character of the FA Premier League competition.
Some matches will continue to be played at 15.00 on Saturday.
In light of the Football Association's decision not to authorise
the broadcasting of football matches played during its main
fixture on Saturday afternoons (1),
live television coverage of
these matches will not be possible. The FAPL will continue to
comply with other objective scheduling constraints such as the
requirements of the police, and constraints caused by the parti-
cipation of FA Premier League teams in other competitions.

18. The FAPL will offer its TV rights in several packages,
although the precise number of rights in each package may
vary over time. Near-live packages of rights for those matches
not broadcast live will be made available. The FAPL will also
offer one or more packages of terrestrial highlights, to be made
available to free to air broadcasters only.

(1) As allowed by Article 48 of UEFA's Statutes and Article 3 of UEFA's

Broadcasting Regulation on ‘blocked hours’.

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Official Journal of the European Union

C 115/5

19. As of midnight Sunday for Saturday matches, and
midnight the same day for all other matches, both the FAPL
and the football clubs can exploit the deferred TV rights. FAPL
exploitation shall be related to action from the whole of the FA
Premier League; the individual football clubs exploitation shall
be in relation to matches in which they participate, it must be
‘club branded’ and must not be bundled with rights of other
clubs to create a competing FA Premier League programming
offer, save that football clubs may under certain circumstances
combine their TV rights with a view to sharing costs of produc-
tion or distribution. These club rights can only be exercised on
dedicated club channels.

20. In addition, however, each club which chooses not to
exploit TV rights via a club channel can sell its home games to
a broadcaster from midnight on the day after the match for a
one-off free-TV or pay- TV broadcast of the full match at any
time prior to the start of the next full fixture programme of
Premier League matches. These club rights may not be sold in
such a way as to allow a user to produce a product which runs
counter to the interests of the FAPL or of the holders of the
centrally marketed packages through the production of a
bundled product or which otherwise undermines the benefits
of central branding and/or marketing. Therefore, no more than
two clubs may sell to the same broadcaster its home match out
of any full fixture programme of 10 Premier League matches.
Further, broadcasters must ensure that
in any programme,
based to any extent on rights sold by the clubs, the broadcast
of a single club's home match does not exceed 30 % of the
total duration of that programme and that the broadcast of the
home matches of any two clubs does not exceed 50 % of the
total duration of that programme.

21. Contrary to its previous practice, the FAPL will always
require separate bids for each package of media rights relating
to the United Kingdom and Ireland. In addition, the FAPL will
make available one additional live match to be broadcast each
Saturday at 15.00 for the market in Ireland for the current
contract round, and will keep the situation under review in the
future to determine if more matches should be made available.

2004 to 2007

22. More live rights have been made available under the new
contracts than were made available in the past. For the 2004 to
2007 seasons, 138 matches per year will be broadcast live, as
compared to 106 matches per year under
the previous
contract. All four live packages were bought by BSkyB: BSkyB's
bids and the outcome of the bids raised separate competition
concerns and led to commitments from BSkyB. The Commis-
sion conducted a separate consultation exercise with parties
specifically interested in the BSkyB commitments.

23. The near live TV rights were sold in a single package of
242 matches. On weekends, this package is currently made

available in two stages: on Saturdays, the first match will be
available as of 20.30 on the day of the match, otherwise, the
remaining matches are available at the earlier of 22.00 or the
end of the first run of the terrestrial highlights package.

2007 onwards

24. Beginning with the rights for the 2007 season, the FAPL
will specify that no single buyer is able to acquire exclusively
all of the centrally marketed live rights packages: the packages
will continue to be balanced,
reflecting prevailing market
conditions and taking into account the requirements of broad-
casters and the object of showcasing the Premier League
competition.

25. The FAPL and the Commission will jointly commission an
independent economic study to evaluate, in the context of the
market situation in the United kingdom, the parameters within
which a variable financial bid for a package of live rights (i.e. a
bid whose financial
terms varies depending on what other
packages of rights are also awarded) by a dominant bidder may
be justified by reference to the economic and commercial value
of the relevant rights packages to the bidder in question.

3.2. Internet

26. Both the FAPL (in respect of all matches) and the clubs (in
respect of matches in which they participate) will have a right
to provide video content on the Internet as of midnight on the
night of the match.

27. As with all other rights, these embargoes will be kept
under review.

3.3. Wireless 3G/UMTS product

28. Both the FAPL (in respect of all matches) and the clubs (in
respect of matches in which they participate) will have a right
to provide audio/video content via UMTS services. The FAPL
will (to the extent that the FA's implementation of Article 48 of
the UEFA Statutes permits) sell an effectively live mobile clips
package to all games (any delay being limited to the technical
need to repurpose the clips). The clubs will be able to provide
mobile content as of midnight on the day following the match.

29. As with all other rights, these embargoes will be kept
under review.

3.4. Radio broadcasting rights

30. The FAPL has increased the number of radio rights avail-
able, and has allowed for two matches to be broadcast live,
nationally, on Saturday afternoons. As radio capacity increases
over the next years, the number of matches made available will
be kept under review.

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Official Journal of the European Union

30.4.2004

THE COMMISSION'S INTENTIONS

31. On the basis of the foregoing, and once Regulation (EC)
No 1/2003 has become applicable, the Commission intends to
adopt a decision making the commitments offered by the FAPL
legally enforceable and subsequently close the file.

32. The full text of the FAPL's commitments is available by
email from Kevin.Coates@cec.eu.int.

33. Before adopting any such decision, the Commission invites
third parties to send their observations within one month of

the publication of this notice to the following address quoting
the reference COMP/38.173 - Joint selling of the media rights
to the FA Premier League on an exclusive basis:

European Commission
Directorate-General for Competition
Antitrust Registry
Office J-70 0/18
B-1049 Brussels
Fax (32-2) 295 01 28
Email: Kevin.Coates@cec.eu.int