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Television Rights and Listed Events
If football fans were asked 'Do you remember where you were on the night of 11 October 1997?', many would probably reply 'In the pub'. The match between England and Italy, when England achieved a draw to qualify for the 1998 World Cup Finals was shown live only on BSkyB, with a delayed full recording being broadcast by ITV later that evening. The most eagerly awaited, or hyped, England match since the Euro '96 semi final was only available for live viewing on satellite television. BSkyB has paid many millions for soccer broadcasting rights in recent years, and why should it not benefit from having exclusivity? The Football Association cheekily requested BSkyB to allow simultaneous live transmission on 'free' television. It cannot have taken its executives more than a few seconds to frame a reply. Nil-Nil. Until a majority of the homes in the UK take Sky, communal viewing in the pub may well become the most popular form of watching major sports events on television. It is almost as if we are returning to watching grainy black and white newsreels at the cinemas, an early form of sporting pay-per-view.
Television and Sport
The England -v- Italy match highlighted the importance of sport to television and vice versa. Movies and sport have been shown to be, financially, the most important forms of programming for pay television, represented by the cable and satellite subscription broadcasters in contrast with the 'free' television services of the BBC, ITV, Channel 4 and Channel 5. BSkyB's increasing prosperity has coincided with its steady acquisition of exclusive rights to important sports.
Sports Bodies
Organisers of events, and the sporting associations which administer many sports in the United Kingdom, have benefited enormously from the increased money being paid for broadcasting rights, generated in part by bruising rivalry between the channels. Coffers have been swollen, although some administrators have spluttered at the prospect of their sport not appearing on the BBC whatever the financial advantages. It is arguable that rugby union, already facing serious difficulties, would not have been able to sustain itself as a professional game until now had it not been for the money paid and promised by the BSkyB/English Rugby Partnership deal (originally struck with the Rugby Football Union), by which £87.5 million will be paid for television rights over five years.
Viewers at Home and in the House
Politicians long ago realised that while the downtrodden population might tolerate the seven plagues with equanimity, the real way to lose votes would be by appearing to fail to defend the availability on free television of major sports events. The viewers feel that certain national events are part of our civilisation and that they therefore have a 'right' to watch them. Bread and Circuses are still important.
The Crown Jewels
Hence the protection of certain 'listed events' afforded by the Broadcasting Act 1996 ('the 1996 Act') which updated and expanded provisions first put in place by the Broadcasting Act 1990. Although the Act is not so blunt or blatant, the purpose of the relevant sections is to ensure that certain major sports events are not acquired exclusively by pay television broadcasters unless the free television broadcasters are not interested in the event. The listed events are known as the Crown Jewels not only because of their national importance, but also because terrestrial broadcasters regard them as sacred, their loss to pay television being tantamount to surrender to the barbarians.
It is important to remember that the legislation does not outlaw exclusive coverage of listed events, nor does it guarantee that those listed events will be shown on television at all. It is concerned with live coverage, not recordings. The relevant provisions of the 1996 Act might be regarded as a well intentioned effort to ensure that sports fans continue to be able to watch important events live on free television (as has been the custom), but many now question whether such laudable motives can withstand the culture of competition. Is the law depriving Sport of income?
The Old Law
Although section 182 of the Broadcasting Act 1990 is no longer law, it is useful to remember that the reasons for introducing listed events legislation in 1990 included the Establishment's fear of Sky, and perhaps a large dollop of snobbery. Many people wrongly believed that Section 182 prevented listed events from being exclusively broadcast on pay television, by which I mean any subscription television such as Sky or cable. However, the wording simply stated that the Independent Television Commission ('the ITC') would do 'all that they can' to ensure that listed events were not included 'on pay-per-view terms'. It would have been possible to acquire exclusive rights on pay television so long as it was not done on a pay-per-view basis. It is important to distinguish between pay television (where the viewer pays a subscription) and pay-per-view (where he pays to watch a specific programme). Sky has started pay-per-view with major boxing matches, but is understood to be hesitant about introducing pay-per-view for football or some other sports. Although the British public is coming round to the idea of having to pay to watch televised sport by subscribing to Sky, riots could ensue if pay-per-view is brought in too early.
The Current Law
Sections 97 -105 of the 1996 Act replaced Section 182 of the 1990 Act. There are no references to pay-per-view. The new regime is significantly more restrictive for the broadcasters, and more comforting for the armchair spectator.
The List
A listed event is a sporting or other event of national interest which is included on a list drawn up by the Secretary of State (Section 97). The list is not restricted to sporting events, although it is perhaps difficult at present to imagine other non-sporting events of national interest being subject to bids for exclusive rights and therefore in need of protection. A state funeral - probably not. A coronation - perhaps. And would anyone want to lobby to put the draw for the National Lottery on the list?
The list currently consists of:-
The FA Cup Final
The Scottish Cup Final
FIFA World Cup Finals
The Derby
The Grand National
The Olympic Games
Wimbledon Tennis Championships - the Finals weekend
Cricket Test Matches involving England
Arguing about what should and should not be on the list might not be as exciting as choosing your All-Time Favourite Spurs XI, but there are some interesting points to make. Only the Finals weekend at Wimbledon is listed, not the remaining 98% of the matches played during Wimbledon fortnight. England Test matches are covered, but not the Cricket World Cup. There is no place for rugby (the Five Nations Championship must be an oval diamond as big as any soccer orb), golf (but in listed events terms the Ryder Cup is surely royal if not too ancient), or athletics (whose World Championships can provoke as much interest as the Olympic finals). A previous list included the University Boat Race (which can hardly be described as national, or of interest after the first 30 seconds), and only included Test matches played in England, which enabled Sky to secure exclusive live rights to overseas Tests.
Drawing Up The List
In drawing up the list, the Secretary of State must consult with the BBC, the Welsh Authority, the ITC and the person from whom the television rights may be acquired. This does not include the competitors, the foot-soldiers. Although in theory the owner of the property upon which an event takes place would own the right to allow broadcasting under the ordinary principles of contractual licences, the complex exploitation of sports events in the modern age means that in reality the inter-dependant contracts between property owners, competitors, sponsors, national associations and organisers, will usually throw up one entity capable of granting the rights. Despite that fact, the ownership of 'rights' to an event is not always accepted as clear cut. The British Horseracing Board's report early in 1997 specifically referred to the fact that ownership of media rights to horse racing, currently in practice vested in the race courses, might be questioned by others involved in the sport. If it were proposed to put the Cheltenham Gold Cup on the list, with whom would the Secretary of State consult? The owners of Cheltenham Racecourse, the BHB, the Jockey Club, the owners, or the jockeys? Sir John Hall, owner of Newcastle Rugby Club, is actively, but almost single-handedly, challenging English Rugby Partnership's right to sell television rights to club games. If the rugby union club knock-out final were to be a possibility for listing, would Sir John, as the owner of a club which might well face Gloucester in the final, be consulted?
By the time this article is published, the government may have announced the expected task force to examine the question of listed events. If it is right that a politico-sportsman, an ex-broadcaster, and current major sponsor are all to be involved, it will underline how important the list is to the various interests.
While it may be assumed that the viewer and the traditional bastions of the BBC and ITV are the most important beneficiaries from the listed events legislation, a new factor to be considered is the effect upon sports associations. If non-exclusivity leads to lower sums being paid for television rights, the sports themselves will suffer. When cricket appeared to be left out of the government's plans for new sporting academies, Lord MacLaurin of the English Cricket Board retaliated by asking that Test cricket be de-listed to enable more lucrative deals to be struck. As county cricket is so dependant upon income generated by Test matches, the combination of lower prices being paid for television rights and the lack of government finance would be akin to being hit on the head by a bouncer and stepping on your wicket at the same time. Sports bodies might once have welcomed protection from pay television, but now (if consulted) they might decide that it is better to be paid well and watched by fewer viewers, than be paid poorly and have a larger audience. That said, major sports need coverage to raise profile and enable them to chase their share of the leisure pound.
The Restrictions
Section 98 of the 1996 Act divides television coverage into (a) that provided by the BBC, Channel 3 and Channel 4 (the free channels) and (b) the remainder. Strangely, Channel 5, even though it might be regarded as a provider of free television and therefore a competitor of the BBC, ITV and Channel 4, falls within the same category as pay television broadcasters for the purposes of section 98.
Section 99(1) states:-
'Any contract entered into after the commencement of this section under which a television programme provider acquires rights to televise the whole or any part of a listed event live for reception in the United Kingdom, or in any area of the United Kingdom, shall be void so far as it purports, in relation to the whole or any part of the event or in relation to reception in the United Kingdom or any area of the United Kingdom, to grant those rights exclusively to any one television programme provider.'
This covers only live broadcasts, the definition of which is considered below. Were it not for the fact that viewers want their live coverage to be simultaneous with the sport itself, there is theoretically nothing to stop exclusive rights being acquired in the listed event so long as the event is shown by, say, a delayed transmission.
Should any broadcaster be foolish enough to enter into a contract for exclusive live rights to a listed event, then the contract would be void.
Section 100 provides that any contract for televising live a listed event will be void unless it explicitly states that the televiser is restricted to, in essence, either free television or pay television. Therefore, a system contrasting two separate categories of rights to the live event has been created.
Provided that the hurdle of Section 100 has been leapt, the broadcaster must then make sure that it does not fall at Section 101(1) which states:-
'A person providing a service falling within either of the categories set out in subsection (1) of section 98 ('the first service') for reception in the United Kingdom or in any area of the United Kingdom shall not, without the previous consent of the [ITC], include in that service live coverage of the whole or any part of a listed event unless-
(a) another person, who is providing a service falling within the other category set out in that subsection ('the second service'), has acquired the right to include in the second service live coverage of the whole of the event or of that part of the event, and
(b) the area for which the second service is provided consists of or includes the whole, or substantially the whole, of the area for which the first service is provided.'
Thus, a televiser must ensure that a broadcaster in the other category also acquires rights to the live event, otherwise it will need to obtain the consent of the ITC to broadcast the event live itself.
ITC Code
Pursuant to its duties under Section 104 of the 1996 Act, the ITC have drawn up a Code (April 1997) on listed events. The Code deals with what constitutes 'live', and provides guidance for determining whether or not the ITC will give their permission for live exclusive coverage to take place where there is no 'second service' envisaged by Section 101(1).
'Live'
The Code recognises that viewers want to feel part of the event as it happens and have therefore not unreasonably taken the view that live coverage is coverage which is simultaneous with the event taking place. However, the ITC wish to take a flexible approach and have specifically noted that the restrictions will apply while an event is in progress, to each day of an event taking place over several days, and to each separate part of an overall event (e.g. the Olympic Games). Therefore, a sharp television executive who noticed that recent England Test matches rarely progressed to the fifth day, and concluded that by acquiring exclusive rights for just the first four days, he would have circumvented the rules, would be wrong.
There is nothing about delayed transmissions.
Guidance
Where a broadcaster approaches the ITC for consent to acquire exclusive live rights within a category, and no-one has made a bid for the rights in the other category, the ITC are keen to ensure that everyone is treated fairly. They do not want a broadcaster to steal a march on its rivals. For this reason, the ITC will take into account whether the availability of rights was well known, and whether everyone has been treated fairly. It would not be acceptable for any conditions to be placed upon the acquisition of rights which would be tantamount to preferential treatment for one category of broadcaster. The ITC prefer rights to be capable of being purchased independently rather than as part of packages of events. All interested parties must be given a reasonable amount of time in which to evaluate the situation and decide whether or not to try to acquire rights.
Should any applicant provide false or misleading information, the ITC's consent can be revoked although in the case of the BBC and the Welsh Authority, such conduct would lead to a report on the matter being submitted to the Secretary of State.
Sanctions
Acting in contravention of the 1996 Act could lead to a report being made to the Secretary of State in the cases of the BBC and the Welsh Authority, or a substantial financial penalty for all other broadcasters. That financial penalty will be calculated by multiplying the price paid for the rights by a multiplier prescribed by the Secretary of State. (Section 102)
Procedures
The ITC Code states that any application for consent for exclusive live coverage of a listed event (with full reasons and supporting information) must be submitted to them in writing. Afterwards, the ITC will publicise the application and seek responses from those parties who might be interested. In practical terms, a broadcaster seeking to acquire rights in one category is unlikely to hold off finalising a deal until a broadcaster in another category has been found, although it might be possible to include appropriate contractual provisions dealing with what happens should another broadcaster not be found to take live rights.
No broadcaster ought to encounter problems as it would be prudent to make an application to the ITC at an early stage in any event. The ITC have made it clear that in view of the fact that listed events are well known and rights are negotiated well in advance, they do not believe that they are likely to be asked to give their opinion (as can happen under Section 102 of the 1996 Act) whether a broadcaster has acted reasonably in not applying for consent. Sanctions would not be levied on such a broadcaster if its conduct was reasonable.
Europe
If sport is war carried out by other means, then war films will continue to be popular. Clubs from different countries compete against each other, and nation shouts abuse unto nation without the need for subtitles. There are moves in Europe to review the question of exclusive rights for television broadcasting of major sports events which, if they lead to anything, will probably conclude with amendments to the Television Without Frontiers Directive. It is understood that those in charge of competition policy at the European Commission are particularly keen to ensure that there is a thorough review of the whole question. Once again, many will be looking at the problem from a cultural point of view, not wanting sports fans to be deprived of free television coverage of sporting events, while others will be approaching the topic from a purely commercial, competition-driven, angle.
It is pointless trying to second-guess what European measures might be introduced in the future. Those wanting to obtain an overview of measures in other European countries which are similar to those contained in the 1996 Act should read the Communication prepared by the representative of the European Commission, Mr Oreja, dated 3 February 1997, in which he describes the current situation in various European countries. Amongst other observations, Mr Oreja notes that while France, Belgium, the Netherlands, Germany, Portugal, Denmark and Italy have introduced, or are in the process of introducing, measures to restrict the acquisition of exclusive rights to broadcast major sports events, the other members of the European Union have no laws equivalent to sections 97-105 of the 1996 Act.
Further Afield
In the United States there are no restrictions on broadcasters, including pay television broadcasters, from obtaining exclusive rights to broadcast sporting events. Courts in the United States several years ago ruled that any restrictions were invalid.
Similarly, although the debate on the topic in Australia has been just as politically sensitive as in the United Kingdom, no restrictive legislation has been passed. It would appear, however, that the threat of such legislation has led to a number of free and pay television broadcasters coming to suitable arrangements between themselves. Coverage on Australian television of this summer's Ashes series in England was shared - a pay television operator had exclusive rights for the first two hours of play each day, and the remainder of the day's play was shared with a free television operator.
Final Whistle
The protection of the ordinary viewer's 'right' to watch live major sporting events by the listed events system inevitably means that Sport will not receive as much income as it might have done without the system. Cultural and political considerations may well be more important than the financial, and as pay television becomes prevalent the system might be the last hope for those who do not subscribe to Sky, like me. Yet.
Tim Curtis
with thanks to Anthony Anisimoff of Anisimoff Davenport (Sydney), Hugh Latimer of Wiley, Rein & Fielding (Washington) and Carolyn Griffiths of The Simkins Partnership.
An edited version of this article appears in International Media Law.
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