Premier League broadcast ruling – has this strengthened Sky’s Monopoly?

This week the European Court of Justice paved the way for homes to purchase and use satellite decoders enabling home owners to watch foreign broadcasts of the Premier League. This seems to be good news for a number of football fans who are sick of paying an extortionate amount of money to watch their team play in the comfort of their own living room. I take a different view, as I believe a ruling of this kind will strengthen Sky’s monopoly on Premier League football broadcasting and would therefore be detrimental to consumers.

The case commotion is regarding the landlady of a pub in Portsmouth who was fined nearly £8000 for using an illegal decoder. She appealed on the grounds that the European common market meant she was free to use any broadcaster within the EU. This was referred to the ECJ in an advisory capacity and came to the conclusion, “national legislation which prohibits the import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified.”1 However, the ruling is far more complicated than this phrase would suggest, as the Premier League have been quick to point out there is a passage within the report, which says broadcast at a pub is considered to be a public event. The case will now go to High Court in London for the final ruling.

The timing of this ruling is crucial, as the Premier League want to begin negotiations for a new contract before the end of the current season, as it expires in 2013. Sky is currently paying the lion’s share of the current £1.782 billion contract2 and if they were to be undercut by cheaper foreign broadcasters it is unlikely they will continue to pay a figure this large. This may force the Premier League to alter the way they sell broadcast rights. The most likely outcome is the Premier League will sell Europe wide rights packages to broadcasters. This is great news for Newscorp and the Murdoch empire, of which Sky is a subsidiary, as they will be able to outbid competitors with their vast purchasing power and continue their domination of this particular market.

However, in the short-term Sky may feel a dent to their wallets, as many fans may purchase broadcast cards from European operators, such as Tring from as little as £199 a year3, approximately £16.60 a month. Considerably less than paying for a Sky subscription. This may be a more popular option than many may think, as a survey by the Guardian4 indicated 74.1% of those surveyed would look into purchasing a foreign decoder.

Although the Premier League and Sky may feel some short-term drops in income there should not be any problems long-term. This might not be the case for other, less popular sports, as they are likely to see a large drop in income from broadcasting, as there is now a legal precedent against selling rights on a country by country basis.

  1. http://curia.europa.eu/jcms/upload/docs/application/pdf/2011-10/cp110102en.pdf
  2. http://news.bbc.co.uk/1/hi/business/7875478.stm
  3. http://www.telegraph.co.uk/sport/football/competitions/premier-league/8302112/Premier-League-football-in-pubs-using-European-broadcasters-how-cheap-is-it-compared-to-Sky-Sports.html
  4. http://www.guardian.co.uk/media/poll/2011/oct/04/premier-league-foreign-decoder-poll