Sports broadcasting & the extent of mandatory sharing laws in India: A review of Union of India v. BCCI

Published 02 November 2017 By: Saurabh Mishra

Indian flag and gavel

In August 2017, the Supreme Court of India passed an important judgment in the case of Union of India v. Board of Control for Cricket in India1 on the issue of mandatory sharing of signals containing sports content. The case involved reconciling two distinct but harmoniously applicable laws. The Supreme Court confirmed that where private broadcasters are mandatorily required to share their signals with India’s public broadcaster, the retransmission must be limited to the public broadcaster’s network only and cannot be retransmitted on other private networks.

This article reviews the case, specifically looking at:

  • How the sports broadcasting market works in India and how “mandatory sharing” legislation fits in;

  • The facts of the case;

  • The proceedings in the Delhi High Court;

    • Arguments of Star India

    • Arguments of BCCI

    • Arguments of India’s public broadcaster, Prasar Bharati

  • The Appeal to the Supreme court.

Background – Mandatory sharing of sports broadcasting signals in India

At a simplified level, the sports broadcasting ecosystem in India functions as follows:

  • The media rights for a sporting event are made available by the controlling authority of that respective sport.

  • A broadcaster acquires media rights for a sporting event from the controlling authority, on an exclusive basis.

  • The sporting event is then made available through the broadcaster’s channel to Multiple System Operators (MSO), which act as television networks, upon the payment of a license fee by this network.

  • The television network then distributes the channel to a number of regional Local Cable Operators (LCO), which provide the channel to customers who subscribe to the television network’s services through the LCO in their area. 

Within this market ecosystem, India’s legislation requires certain exclusively acquired sports content to be made available on all television networks, without the need to pay a license fee to the broadcaster. This is known as “mandatory sharing”.

Section 8 of the Cable Television Networks (Regulation) Act, 19932 (CTN Act) allows the Government to mandate the compulsory carriage of certain specified channels by all the television networks.

  • India’s public broadcaster, Prasar Bharati, operates the channels in concern.

  • The channels are called “Doordarshan” channels, which are channels operated by or on behalf of the Parliament of India.

  • Consequently, the Ministry of Information and Broadcasting (MIB) issued multiple notifications directing private cable operators to compulsorily carry all Doordarshan channels3.

  • Doordarshan channels are Free-to-air (FTA), meaning a television network does not have to pay any subscription fee to carry it on its network.

 

Section 3 of the Sports Broadcasting (Mandatory Sharing with Prasar Bharati) Act, 20074 (Sports Act) mandatorily requires private broadcasters to share the signals of certain exclusively acquired sporting events with Prasar Bharati.

The aim of the Sports 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…”5

  • The Government may notify an event as a “sporting event of national importance6.

  • Even if a private broadcaster has exclusively acquired the rights to a notified event, its signals must be shared with Prasar Bharati.

  • Prasar Bharati’s channels are to be mandatorily carried by all television networks as per Section 8 of the CTN Act.

The two laws above result in content acquired by a private broadcaster being made available on television networks through the public broadcaster, without any fee being paid directly to the private broadcaster.

The upshot of this was that television networks stopped subscribing to the private broadcasters, because they could get the content for free through the public broadcaster. A private broadcaster usually pays a significant fee in order to acquire exclusive rights to broadcast such events. Failure to recoup their investment due to service providers no longer subscribing to their channel was potentially leading to substantial losses in revenue for broadcasters (and, in turn, sports).

For a more detailed background on mandatory sharing, please see: Mandatory sharing of sports broadcast signals in India.7

 

Facts 

In 2007, the Board for Control of Cricket in India (BCCI) and Nimbus Communications Ltd. (Nimbus) filed a writ petition against Prasar Bharati and the Union of India8.

At that time, Nimbus owned the rights to broadcast cricketing events conducted by the BCCI. In accordance with the Sports Act, Nimbus had to share its signals with Prasar Bharati for re-transmission. The petition primarily sought a direction to the effect that no person other than Prasar Bharati had the right to transmit, relay or offer for exhibition, the live broadcasting signals of sports events shared with Prasar Bharati.

Additionally, the petition asked the court:9

  • For the satellite feed of Prasar Bharati, carrying BCCI content, to be encrypted.

  • For a prohibition on any network carrying signals bearing BCCI content in the absence of a valid license.

  • To strike down the notification directing television networks to mandatorily carry Doordarshan channels carrying BCCI content.

The petition was dismissed, with the Court stating that the carrying of sports events was a matter of policy that could not be interfered with. Consequently, BCCI and Nimbus filed an appeal.

Star India Pvt. Ltd. (Star) and ESPN Software India Pvt. Ltd. (ESPN), both of whom had also entered broadcasting deals with the BCCI, also filed separate petitions against Prasar Bharati on the same points10.

The Delhi High Court merged the three motions into a single set of proceedings, together with a Public Interest Litigation (PIL).

 

Proceedings in the Delhi High Court

Star’s pleadings revolved around the mandatory sharing of sporting events on private television networks under Section 8 of the CTN Act and Section 3 of the Sports Act11. They did not challenge the legality or rationale of mandatory sharing itself.

 

Arguments by Star India Pvt. Ltd.

Star argued that that any application of Section 3 of the Sports Act was effectively an act of expropriation (the action by the State of taking property from its owner for public use of benefit), permitting privately acquired signals to be taken by a public broadcaster. As such, they argued that the legislation should be interpreted narrowly and place the minimal possible burden on the private owner:12

when there is expropriation for purpose X, the same must be used for purpose X only13”.

Accordingly, they argued that the shared signals should be re-transmitted on Prasar Bharati’s own network only, and should not be made available on any other television network.14 They cited direct losses amounting to more than INR 12 Billion as a result of lost subscription and advertisement revenue in support of their case.15

 

Arguments by the BCCI

The BCCI supported the broadcasters, stating that it depended on media rights revenue for its survival, and if they rights were undermined it would adversely impact cricket as a sport16.

Citing a previous judgment of the Supreme Court in Secretary, Ministry of Information and Broadcasting, Government of India and Others v. Cricket Association of Bengal and Others, BCCI argued that it was incumbent upon them to carry out the administration of the sport in a manner which would be in the best interest of Cricket17. BCCI stated that the intent of the Sports Act was to provide access to the largest number of viewers “on a free to air basis18”. Consequently, since Prasar Bharati’s network was the only network available freely, all other television networks were automatically excluded from the scope of the Sports Act.

 

Arguments by Prasar Bharati

In its response, Prasar Bharati primarily stated that out of all the television viewers in India, only an extremely small percentage depended upon the terrestrial and DTH networks of Prasar Bharati19. Accordingly, limiting the availability of shared signals to only these households, to the exclusion of all others, would not be in public interest.

Further, they stated that airways operate in different frequencies, in the form of a spectrum, which, in Centre for Public Interest Litigation v. Union of India20 had been declared to be a natural resource by the Supreme Court. The rationale behind such a holding is that it is a scarce, finite resource having intrinsic utility to mankind, with the State holding the resources on behalf of the people. Therefore, as per the public trust doctrine, the same could not be utilized to maximize profits for private entities at the cost of public interest21.

To reiterate their argument, Prasar Bharati highlighted the fundamental right of the citizens of India to receive information, protected by Article 19(1)(a) of the Constitution of India. In this regard, they stated that any limitation on signal sharing to limit the exercise of this right would be illegal22.

Relying further on signal sharing practices in other jurisdictions, they argued that the entire purpose behind the legislation was to enable “the substantial proportion of the public to follow events of major importance to society23”. They stated that since the Sports Act intended to provide access to the masses on a free to air basis24, an interpretation that allows access to the largest number of people must be the correct one.25

 

Decision: Shared signals not meant for private television networks

The High Court recognized the fundamental right in concern, and contextualized the CTN Act by bringing to light the prevalent circumstances at the time of enactment26:

At the point of time when the CTN Act came into being, Prasar Bharati, through the medium of Doordarshan, had the widest coverage insofar as television networks were concerned. Cable operators had recently entered into the field…The idea behind that was that programming of national importance should be carried to the maximum number of persons.”

Coming to the Sports Act, the High Court validated the broadcasters’ arguments, stating that the entire purpose of signal sharing was to facilitate transmission only to those who depended upon Prasar Bharati’s terrestrial and DTH network, and not to those already connected by private networks27.

Negating the argument regarding utilization of spectrum, the Court acknowledged that the issue revolved around the content in concern, rather than the medium of delivery28. BCCI’s argument, regarding the value of and revenue generated from the media rights, was also held to be sound. In this regard, the Court explained that Prasar Bharati was empowered to acquire and thereby exploit the media rights in concern.

If that had been the case, Prasar Bharati would have been free to direct the cable operators to carry the live broadcasting signals of cricket matches on cable networks.” 29

However, it was due to the compulsory application of the Sports Act that despite not having any claim to the rights in concern, Prasar Bharati was able to retransmit the events on their network.

It is in the nature of a compulsory exaction. But, it must be read with the limitation prescribed in the Section itself and, that is, to enable Prasar Bharati to re-transmit the same on its terrestrial networks and DTH networks. It cannot expand this manner of acquisition to such an extent as to virtually become the content rights owner itself30.”

As such, the High Court held that the live broadcasting signals shared by the private broadcasters with Prasar Bharati could only be retransmitted on the latter’s own terrestrial and DTH networks, to the exclusion of private cable and DTH operators31.

 

Appeal to the Supreme Court

Aggrieved by the decision, Prasar Bharati appealed to the Supreme Court.

Citing public interest again, it stated that the purpose of the Sports Act is to provide access to sports for the largest number of viewers through mandatory sharing. As such, it was contended, the operation of Section 8 of the CTN Act to carry the shared event on all private networks was in furtherance of this purpose.32

 

Rights subsist in the live feed

The Supreme Court once again reiterated that the dispute arose only with regard to the interplay between Section 3 of the Sports Act and Section 8 of the CTN Act, and not with regard to a broadcaster’s obligation to mandatorily share signals33.

Acknowledging the existence of a right for the rights holder in the live feed of a sporting event, the Supreme Court sought to gauge whether the rights were curtailed due to the event being made available on private television networks34.

 

Legislative expropriation

The Court agreed that the requirement to mandatorily share the signals under Section 3 of the Sports Act was effectively an act of expropriation.35 Therefore, any interpretation which would increase the burden on the subjected party ought to be avoided, and the provision would have to be interpreted narrowly.36

The Court highlighted how despite being a later enactment, the Sports Act did not make any reference to the CTN Act with regard to mandatory sharing of signals37. Hence, allowing Section 8 of the CTN Act to control the operation of Section 3 of the Sports Act would be incorrect.

 

Central Government to notify/de-notify channels

Further, the Court explained how under Section 8 of the CTN Act, only those channels as notified by the Central Government would need to be compulsorily carried by private networks. Indeed, the legislation itself did not specify any channels to be carried under the provision. As such, it was entirely possible for a channel such as DD1, which would broadcast the sporting event for free, to be de-notified by the Government38. As the primary intent of the Sports Act is to ensure wider access to sporting events, the parliament could not have intended for the same to be defeated by a discretionary power vested in the Central Government39.

Surely, the effect and operation of Section 3 of the Sports Act cannot be left to be decided on the basis of the discretion of the Central Government to include and subsequently exclude or not to include at all the DD1 (National) channel in a notification to be published under Section 8 of the Cable Act, 1995.”

 

Appeal dismissed - judgment of the Delhi High Court upheld

Accordingly, the Supreme Court found that signals shared by a private broadcaster were meant to be re-transmitted on Prasar Bharati’s own terrestrial and DTH networks only, and not on other private networks40.

Such an interpretation is consistent with the intent to provide access to those who depend solely on the public network for consumption of sports content, as opposed to those who already had access to private networks41. Thus, to the relief of private broadcasters as well as the BCCI, Prasar Bharati’s appeal was dismissed, and the Delhi High Court’s decision upheld42.

This was a crucial ruling in the context of sports broadcasting, as it prevents broadcasters from incurring further losses. The sports ecosystem in India is not yet mature enough to sustain itself, and depends upon the broadcasting industry to survive, which itself depends on its ability to generate revenue through subscription and advertisements. Mandatory sharing of expensively acquired content is by itself an onerous obligation which has been imposed on the broadcasters. As such, the lawmakers ought to take care that any such obligation is not imposed in a manner so as to cause additional economic injury where there ought to be none.

Related Articles

Author

Saurabh Mishra

Saurabh Mishra

Saurabh is a lawyer working as counsel for Star India Pvt. Ltd. He is also associated with the Football Players Association of India (FPAI). He received his B.A./LLB from The West Bengal National University of Juridical Sciences, Kolkata, and was a recipient of the Graduate Scholar Award at the Fifth International Conference on Sport and Society in July 2014. He has previously worked with organisations such as Adidas and Atletico de Kolkata, a franchise in the Hero Indian Super League.

 

@ThSaurabhMishra

  • This email address is being protected from spambots. You need JavaScript enabled to view it.