The Spanish CNMC imposed fines on football clubs Barcelona, Real Madrid, Racing de Santander and Sevilla and TV broadcaster Mediapro
Published 10 January 2014 By: Alfonso Rincón
In a decision of 28 November 2013 the Spanish competition authority CNMC imposed fines on various football clubs (Fútbol Club Barcelona, Real Racing Club de Santander, S.A.D., Sevilla Fútbol Club, S.A.D. and Real Madrid Club de Fútbol) and TV broadcaster Mediaproducción, S.L. (Mediapro) for licensing their broadcasting rights for more than three years.
The proceedings were opened for non-compliance with a previous decision of the CNMC of 14 April 2010 (case S/0006/07) that concluded that exclusive broadcasting agreements signed between various TV broadcasters and football clubs that exceeded three years were contrary to competition law. The CNMC found at that time that the whole group of agreements concluded between each football club and various broadcasters restricted competition. The CNMC focused on the foreclosure effect originated by the existence of a network of similar exclusive supply agreements. The CNMC also took into account that broadcasting rights were resold downstream. In this regard, the CNMC held — in line with the European Commission practice in cases Champions League, Premier League and Bundesliga — that although the exclusive broadcasting agreements might generate efficiencies in the sense of Article 101(3) TFEU, there were no reasons to justify a duration of more than three years. The CNMC considered that three years were adequate for a satisfactory exploitation of the football broadcasting rights. The CNMC did not impose fines at that time because until then neither the European nor the Spanish competition authorities had raised concerns about the legality of agreements individually concluded by football clubs.
On May 3, 2012 the Council of the CNMC adopted a decision (case VS/0006/07) establishing that TV broadcaster Mediapro and various football clubs had infringed the previous decision adopted in April 2010. The CNMC considered that the licensing agreements signed after the adoption of the Decision were contrary to that decision in that they exceeded three years (the agreements were concluded for four or five years). The CNMC rejected the allegations of some companies in the sense that the General Broadcasting Act (7/2010) prevailed over the decision of the CNMC. The General Broadcasting Act provides that broadcasting rights for football content should be limited to four years. Even leaving aside that the General Broadcasting Act entered into force after the adoption of the Decision, the CNMC held that the Act aimed at protecting the pluralism of the media and not competition. According to the CNMC this should no prejudice the competence of a competition authority to conclude that a licensing agreement of football rights exceeding three years is contrary to competition law. The CNMC ordered the Directorate for Competition to initiate proceedings to determine the individual liability of football clubs and TV broadcasters for these infringements.
The CNMC initiated proceedings against Barcelona, Racing de Santander, Sevilla and Real Madrid, and TV broadcaster Mediapro. The proceedings concluded with the decision adopted on November 28, 2013. The reasoning of the CNMC is straight forward. The CNMC concludes that the four football clubs and Mediapro knowingly failed to comply with the Decision adopted on 14 April 2010. The companies concerned contended again that the conclusion of licensing agreements for up to four years was covered by the General Broadcasting Act. They argued that the CNMC should take into account the existence of legal uncertainty about the compatibility of the agreements with competition law. The CNMC rejected these allegations and stated that the Decision of 14 April 2010 removed any ambiguity on the interpretation of the General Broadcasting Act. Moreover, in a judgment of 18 October 2013 the High Court (Audiencia Nacional) confirmed the view of the CNMC that the General Broadcasting Act did not prevail over competition law.
The CNMC issued fines of € 6,573,000 to Mediapro; €3,900,000 to Real Madrid; €3,600,000 to Barcelona; €900,000 to Sevilla; and €30,000 to Racing de Santander. The fine was calculated by applying a percentage of 3%, in the case of clubs, and 3,5%, in the case of Mediapro, to the value of the broadcasting agreements for a single season. Allegedly, the decision is proportionate because there has been a very clear infringement of what had been previously ordered by the authority.
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- Tags: Broadcasting | Competition Law | Football | La Liga | Spain | Spanish Competition Authority CNMC
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Alfonso Rincón, PhD, is associate in Martínez Lage, Allendesalazar & Brokelmann Abogados, a Spanish law firm specialising in EU and Competition Law. He specialises in Spanish and EU competition law, the EU single market and has research experience on the relations between EU Law and Sport.