Mandatory Sharing of Sports Broadcast Signals in India: Part 1 – A review of STAR Sports v. Prasar Bharati

Published 04 August 2016 By: Roshan Gopalakrishna

Person_Using_Mobile_in_Street_With_STAR_Sports_Logo

In May 2016, the Supreme Court of India (the “Supreme Court”) passed judgement in Star Sports India Private Limited vs. Prasar Bharati and Ors.1 (the “Case”). It ruled that broadcasters of ‘sporting events of national importance’ must share a ‘clean’ feed of the broadcast with Prasar Bharati, India’s national public broadcasting corporation, that not only excludes the broadcaster inserted advertising during breaks, but also is free of all forms of digital commercial inserts such as advertisements, sponsor logos and credits, even if these are being pre-inserted into the feed by the event organiser and not the broadcaster. In turn, Prasar Bharati may retransmit the signal on its free-to-air television network Doordarshan (“DD”) and free-to-air radio network, Akashvani, while inserting its own advertising and commercials, subject to a revenue share with the broadcaster.

This two-part article offers insight into the Supreme Court’s decision and its implications. Part 1, below, reviews the judgement and provides background on sports broadcasting laws in India. Part 2 (available here) analyses the implications of the decision by comparing India’s position to other jurisdictions, before looking at the significance of the mandatory sharing of sports broadcast signals in India in the light of the many legal developments in this emerging area of the law.

Facts

The proceedings in the Case arose as a result of a special leave petition filed by STAR Sports in appeal against an order by the Delhi High Court in ESPN Software India Pvt. Ltd. v. Prasar Bharati & Anr.2 instructing ESPN STAR Sports to provide the broadcast feed to Prasar Bharati without any advertisements.

The issue in the Case was with respect to the scope of the broadcaster’s obligations under Section 3(1) of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (“Act”), which requires a content rights holder, owner and television/radio broadcast service provider of a “sporting event of national importance” to mandatorily share with Prasar Bharati a simultaneous broadcast feed of the event without ‘its advertisements’, to enable Prasar Bharati to further retransmit the broadcast feed through the insertion of advertisements procured by Prasar Bharati.3

The Act provides for sharing of the advertising revenue generated by Prasar Bharati, between the broadcaster and Prasar Bharati in the ratio of not less than 75:25 for television coverage and 50:50 for radio coverage.4 Of direct relevance in the present instance is Rule 3 (3) of the accompanying Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Rules, 2007 (the "Rules") which provides that:

the signals to be shared with Prasar Bharati by the content rights owner or holder, shall be the feed with all features as that of (sic) provided to a broadcast service provider in India and free from commercial advertisements;5

STAR Sports, the broadcast rights holder in India for all of the International Cricket Council’s (the “ICC”) events, sought to draw a distinction between:

  • the insertions that were made by the ICC on the ‘world feed’ that is shared with various broadcasters, and
  • the advertisements/insertions that are inserted by broadcasters thereafter.

Of larger concern however was the fact that compliance with the requirements of the Act would place STAR Sports in material breach of its contractual obligations with the ICC as broadcasters are required to carry the ‘world feed’ as provided by the ICC while broadcasting the feed on their television, mobile and internet channels.

Commercial Overview

Until the Indian markets were liberalised in 1991, sports broadcasting in India was monopolised by DD, then directly operated by the Ministry of Information & Broadcasting, Government of India (“MIB”). By virtue of its pre-eminent position in broadcasting, DD often required the organisers of sports events in India to bear the considerable expenses incurred with production of content, and to be paid for broadcasting the content, while at the same time retaining all advertising revenues generated through the broadcast. The entry of private players such as Trans World International (“TWI”), WorldTel and STAR TV, the predecessor to STAR India, in the early 90s changed the commercial landscape of sports broadcasting in India in a manner that few could imagine.

The first major dispute between DD and private broadcasters/rights holders arose when the Board of Control for Cricket in India (“BCCI”), the governing body for cricket in India, sold television rights for the India-England series in 1993 to TWI. DD was, in turn, forced to pay TWI USD 1 million for the right to telecast the matches in India. This arrangement, the first of its kind in the BCCI’s history, was the pivotal step in realising the then untapped commercial potential for cricket rights in India.

Since then, the value of broadcast rights in cricket, globally and in India, has increased exponentially. In particular, since the turn of the millennium, Indian broadcast rights have fuelled the global cricket economy. To illustrate, the worldwide television rights for the 1996 Cricket World Cup co-hosted by India, Pakistan and Sri Lanka were acquired by WorldTel for USD 10 million, a princely sum at that time. That amount seems but a dot on the horizon as the ICC has subsequently sold its broadcast rights for USD 550 million in 2000 to Global Cricket Corporation,6 for USD 1.1 billion in 2006 to ESPN STAR Sports,7 and for ~ USD 2 billion in 2014 to STAR India and STAR Middle East.8

As regards the BCCI, it received USD 600,000 from TWI for the India-England series in 1993, which helped the BCCI tide over its financial crisis between 1987 and 1992, purportedly brought by the ambitious co-hosting of the 1987 Cricket World Cup in India and Pakistan.9 Thereafter, in 1999, Prasar Bharati was granted the telecast rights to all international and domestic matches to be played in India for a five year period at USD 54 million. The figures subsequently have been astronomical - ~ USD 450 million to Nimbus for 2006-12 and ~ USD 650 million to STAR Sports for 2012-18. The Indian Premier League is expected to generate broadcast revenues of ~ USD 1.5 billion in its initial ten years. However, these numbers are small in the context of the global sports broadcasting market. The NBA for instance receives USD 2.67 billion annually as part of its current media rights arrangement.10

India’s growing importance in the context of sports media rights is therefore not lost on the various stakeholders in sport, and the potential for expansion remains huge, if arduous. The sports broadcasting industry in India is expected to grow between 15-20% in 2016,11 and to continue this trend over the next decade or so. At the heart of the issue is the battle to secure the primary market for cricket content consumption in the world. The growth of the direct-to-home (“DTH”) and cable markets in India has been unprecedented. The DTH market currently has ~ 85 million users in India,12 and is expected to see its annual revenue grow more than three times to in excess of $ 5 billion by 2020, as mandatory cable TV digitisation assists DTH players expand their subscriber base.13 However, DTH lags behind cable television which has close to 100 million subscribers in India.14 These numbers pale in comparison to DD’s reach, which covers 92% of the population of India through terrestrial, cable and DTH transmitters.15

 

Legal Background

Not surprisingly, the legal regime surrounding the broadcast of sports events in India has been largely defined in the context of cricket broadcast rights. Courts in India have been required to balance the commercial interests of broadcasters with the right of the public in India to view marquee sporting events on free-to-air channels. In chronological order, the various stages of the evolution of the laws and legal position with respect to sports broadcasting in India are briefly captured below.

In 1993, the Cricket Association of Bengal (the “CAB”) decided to organise a multi-team international ODI cricket tournament as part of its diamond jubilee celebrations. The event, named the Hero Cup, while famous for many on-field exploits of the Indian team, was the first tournament held in India to be broadcast live on a satellite channel – STAR TV, and on DD.The CAB had, after protracted negotiations, rejected DD's lowball broadcast bid in favour of a more lucrative commercial proposal from TWI.

DD challenged the CAB’s decision, and the dispute between the parties would eventually be decided by the Supreme Court in The Secretary, Ministry of Information and Broadcasting v. Cricket Association of Bengal.16 The Supreme Court was required to adjudicate on the fundamental question of whether private bodies could grant exclusive telecast rights in India for a sports event in favour of private television channel, and to the exclusion of DD. The Supreme Court recognised the CAB’s right to enter into contracts with broadcasters in India other than DD. The Supreme Court also observed that airwaves or frequencies utilised for broadcasting were public property and therefore could not be monopolised, and instructed the Government of India (“GoI”) to ensure that their use had to be controlled and regulated by a public authority in the interests of the public and to protect against the invasion of their rights.17Thereafter, DD and WorldTel found themselves at loggerheads with each other on the issue of the broadcast rights to the 1996 Wills World Cup,18 while Prasar Bharati and ESPN faced off on the issue of the Asian telecast rights for the 1999 Cricket World Cup.19

India’s historic ODI and Test tour of Pakistan in 2004 brought to the fore the issue of mandatory sharing of sports broadcast signals. In Citizen, Consumer & Civic Action Group and others v Prasar Bharati and Others,20 Ten Sports, as the exclusive global broadcasting rights holder for the series, had refused to share its broadcast feed for retransmission on DD, a move perceived as being against the public interest. The High Court of Madras instructed Ten Sports to share its broadcast feed for retransmission on DD, provided that the Ten Sports logo would be retained in the retransmission and that the parties would have to mutually arrive at the remuneration to be paid to Ten Sports for the retransmission.

Pursuant to this ruling, the MIB issued the Policy Guidelines for Downlinking of Television Channels 2005, mandating all sports broadcastrights-holders ‘national and international sporting events of national importance’ in India to share their feed with Prasar Bharati.21 ESPN STAR Sports (as it then operated in India) and Ten Sports challenged the validity of the guidelines in the High Court of Delhi22 and the High Court of Bombay,23 respectively, claiming that the guidelines lacked the necessary legislative consent. The Supreme Court, pursuant to a subsequent judgement, restrained the MIB and Prasar Bharati from taking any coercive steps against Ten Sports or ESPN STAR Sports to ensure compliance with the feed share provisions of the guidelines.24

Purportedly, the issue of mandatory sharing reached tipping point when broadcast coverage of the India vs. West Indies ODI series in 2007 suffered as a result of the dispute between Nimbus Communications Limited, the then official broadcaster for BCCI events, and the GoI over the former’s refusal to share its live feed of the series with Prasar Bharati. This resulted in a blackout of the 1st match of the series and the delayed broadcast (with a seven-minute lag) of the rest of the series on DD.25 The GoI hastened the promulgation of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Ordinance, 2007. Subsequently, the Ordinance was repealed when the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Bill was introduced in and was passed by the Parliament of India in March 2007.

 

Legislative Framework: The Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007

The Act provides that no content rights holder/owner or television/radio broadcasting service provider can telecast live within the territory of the Republic of India a “sporting event of national significance26 unless it simultaneously shares the live broadcast signal (devoid of advertisements) with Prasar Bharati enabling retransmission by Prasar Bharati on the television and on radio.27 The avowed aim of the Act is “to provide access to the largest number of listeners and viewers, on a free to air basis, of sporting events of national importance.28 As mentioned earlier, the Act does provide for advertisement revenue sharing between the content rights owner or holder and Prasar Bharati in the ratio of not less than 75:25 in case of television coverage and 50:50 in case of radio coverage.29

The accompanying Rules specify the mode of sharing of sports broadcasting signals with Prasar Bharati. The signals referred to also include live signals of pre-event and post event coverage.30 Prasar Bharati is under no obligation to carry the logo of any channel available in India31 and has the rights to generate its own pre, post and intermission programming.32

Perhaps most importantly, the criteria to determine what constitutes “sporting events of national importance” have not been specified. The Rules only state the manner of notification for such events. The list of sporting events of national importance is determined and notified by the MIB in consultation with the Ministry of Youth Affairs and Sports and Prasar Bharati.33 Once an event of national importance is notified, it remains as such for a period of four years from the date of its inclusion unless it is deleted or withdrawn.34 The MIB is authorised to review the list of sporting events of national importance at any time, and no less than once each calendar year and to consider new proposals for inclusion or deletion and notify amendments, if any.35

Currently, as per the government’s notification, the “sporting events of national importance” with respect to cricket areall ODI and T20I matches played by the Indian Men’s Team, certain test matches considered to be of high public interest by the government, and the semi-finals and finals of the ICC Cricket World Cup and the ICC Champions Trophy, irrespective of the participation of the Indian team therein.36 Other marquee sports events that have been notified as “sporting events of national importance” include multi-sport events such as the Olympics, Asian Games and Commonwealth Games, as well specific matches of the FIFA World Cup, the Davis Cup, the Grand Slams, the FIH Hockey World Cup and Champions Trophy.37 Non-compliance by the content rights owner of the Rules enables the Government of India to impose penalties, including suspension or revocation of licences, permissions or registration, subject to the condition that the amount of a pecuniary penalty shall not exceed Indian Rupees One Crore. However, no penalty can be imposed without giving a reasonable opportunity to the service provider to be heard.38

 

Arguments

The Case was by no means the first instance wherein STAR Sports and the BCCI, and Prasar Bharati, found themselves on opposite sides with respect to the implementation and interpretation of the Act. During the ICC Cricket World Cup 2015, the Supreme Court permitted Prasar Bharati to share its retransmission of the World Cup feed with private cable operators, and stayed a judgment of the High Court of Delhi which had ruled that Prasar Bharati should air the coverage only on its terrestrial and Direct-To-Home networks.39 STAR Sports had argued that it would suffer significant losses if Prasar Bharati was permitted to retransmit through cable operators as the Cable Television Networks (Regulation) Act, 1995 makes it mandatory for all cable operators to carry two DD channels without any deletion or alteration of any programme transmitted on such channels in satellite mode on frequencies other than those carrying terrestrial frequencies.40

STAR Sports’ primary contention in the Case was that the phrase “its advertisements” mentioned in Section 3(1) of the Act was applicable only to the advertisements and other digital insertions inserted by STAR Sports, and not to insertions made by the ICC (i.e., of the ICC’s sponsors logos and the revenue from which was retained by the ICC) at the time of providing the ‘world feed’ to the ICC’s broadcasters. Therefore, STAR Sports’ obligation under Section 3(1) the Act would be limited only to simultaneously sharing with Prasar Bharati the ‘world feed’ as received from the ICC devoid only of any advertisements inserted by Star Sports. Further, STAR Sports contended, that screen credits and logos inserted by the ICC in the ‘world feed’ should not be construed as STAR Sports’ advertisements as STAR Sports had no control whatsoever over the insertions made by the ICC, and was accordingly not obliged to remove the commercial insertions before sharing the ‘world feed’ with Prasar Bharati.41

In brief, the ‘world feed’ for any major sports event is the unedited live radio and television broadcast signal of every fixture from every venue for the event. The governing bodies for sports events take on the responsibility of providing a single and standard ‘world feed’ globally to ensure that all of their contractual obligations in this respect are fulfilled and also so that all the broadcasters worldwide are provided a standard feed of the event. The ‘world feed’ usually contains digital insertions such as graphics (statistics, team information, etc.) and event/organiser/sponsor logos, but is devoid of form of commentary or programming. As a matter of practice, broadcast agreements compel broadcasters to carry the ‘world feed’ as-is, but also permits them to create their own programming using the ‘world feed’. To illustrate, STAR Sports is the official broadcaster of the 2016 Summer Olympic Games and Paralympic Games at Rio for India and South-Asia. STAR Sports will receive the ‘world feed’ for Rio 2016 from Olympic Broadcasting Services, the in-house production unit of the IOC that is the designated ‘Host Broadcaster’ for all of the IOC’s events. However, STAR Sports may, at its discretion, choose to focus on broadcasting certain marquee events at the Games and on the performances of Indian athletes. Further, STAR Sports may also create its own programming prior to, during and after the live broadcast of events.

Prasar Bharati argued that the phrase “its advertisements” in Section 3(1) included in its scope all advertisements in the broadcast feed, whether inserted by Star Sports or the ICC, and that the word “it” referred to the broadcast feed rather than the broadcaster. It was also argued that the commercial insertions in the ‘world feed’ were for the benefit of the ICC’s sponsors who had solicited the credits and logo displays purely for commercial purposes, and which were, therefore, advertisements. Further, Prasar Bharati contended that the requirement under the Act was for broadcasters to provide a feed without any advertisements, and that accordingly it was STAR Sports’ duty to ensure that the feed shared with Prasar Bharati was free of all forms of advertisements, regardless of whether they were inserted by STAR Sports or the ICC.42

 

The Decision

The Supreme Court rejected STAR Sports’ contentions, dismissed the appeal and held that STAR Sports would have to share a clean broadcast feed with Prasar Bharati without any advertisements/logos, even if such advertisements were inserted by or at the instance of the ICC.

The Supreme Court observed that the display of the sponsor advertisements and logos on the ‘world feed’ arose purely as a result of commercial arrangements between the ICC and its sponsors, ostensibly to benefit from the resulting brand promotion for their respective companies, and that such commercials of the sponsors would clearly be treated not only as advertisements, but as commercial advertisements.43

Further, the court observed that Section 3 of the Act did not make any distinction between advertisements inserted by a broadcaster or an event organiser. Therefore, the question of whether such advertisements were shown because of an arrangement between the event organiser and the sponsors or as a result of an arrangement between the broadcaster and the sponsors would be immaterial.44

That concludes Part 1 of the article. Part 2 (avalible here) moves on to analyse the implications of the decision by comparing India’s position to other jurisdictions, before looking at the significance of the mandatory sharing of sports broadcast signals in India in the light of the many legal developments in this emerging area of the law.

 

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Author

Roshan Gopalakrishna

Roshan Gopalakrishna

Roshan is Counsel (Sports & Entertainment) at LawNK, a Bangalore based niche law practice specializing in sports, intellectual property, media and information technology laws. In addition, Roshan is also the Chief Legal Counsel at Copyright Integrity International, a world leader in the protection of digital and broadcast rights. Roshan is a graduate of the National Law School of India University, Bangalore.

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