The Joint Selling of Media Rights and the European Commission's Statement of Objections

A seminar at the Room 105,
Clore Management Centre,
Birkbeck,
University of London,
Malet Street,
London WC1E 7HX

4pm, Wednesday 17th June 2003

Given by:

Jonathan Michie and Christine Oughton ¹

Synopsis:

In this paper we provide evidence regarding the European Commission's Statement of Objections to the joint selling of media rights by the Premier League.  Our analysis shows that the collective selling of broadcasting rights by the Premier League does not represent a restriction of competition on the market in the normal sense and therefore does not breach Article 81.  In particular we show that the collective selling agreement improves the production and distribution of football matches and benefits consumers (football supporters).  However, we believe that these benefits would be enhanced by greater solidarity (which has been eroded in recent years) and better corporate governance of football clubs. To realise these benefits the Commission should permit collective selling but seek changes in the rules of the Premier League to: (i) increase solidarity via more redistribution; and (ii) improve corporate governance to protect shareholders and consumers (football supporters).

We also argue that there is a lack of competition in the broadcasting market due to BSkyB's dominant position and its possible abuse of that position. However, we believe that this is best dealt with under Article 82 and that the Commission should investigate BSkyB's activities directly using Article 82 rather than seek to regulate possible abuse of a dominant position in broadcasting via application of Article 81 to the football industry.  The use of Article 81 to remedy BSkyB's dominance runs the risk of undermining solidarity in the football industry and reducing the output of that industry with no guarantee that BSkyB's dominant position and possible abuse of that position would be curtailed or eliminated.

Read the full text of the submission

The seminar is free. To register for this seminar please contact Lee Shailer at the Football Governance Research Centre on 020 7631 6740 or email l.shailer@bbk.ac.uk

Copies of the handout notes will be available on request.

^{1. In 1999 we gave evidence to the Monopolies and Mergers Commission arguing that the proposed takeover of Manchester United Plc by BSkyB would distort competition in the broadcasting industry and damage the quality of English football.  Those arguments were accepted by the MMC panel and the merger was blocked. A summary of the evidence submitted by Professor J Michie et al. is published in the Monopolies and Mergers Commission Report (1999) British Sky Broadcasting plc and Manchester United PLC: A Report on the Proposed Merger, Cm 4305, The Stationery Office. London, pp. 222-3.  We also gave evidence in person to the MMC Panel. A fuller version of our written evidence was published in Hamil, S, Michie, J and Oughton, C (eds) (1999) A Game of Two Halves? The Business of Football, Edinburgh: Mainstream (see chapter by Michie and Oughton).  In addition, a research paper published by us in 1999 before the outcome of the Restrictive Practices Court case over the collective selling of television rights by the Premier League set out a number of arguments to show that this collective selling operated in the public interest.  Many of the arguments were accepted in the ongoing court case and the UK Restrictive Practices Court ruled that collective selling was not a restriction on competition operating against the public interest.  See Findlay, J, Holahan, W and Oughton, C Revenue Sharing from Broadcasting Rights, in Hamil, S, Michie, J and Oughton, C (eds) (1999) ibid.}