Olympic Game for Sale
Published 13 October 2009
By Gary Rice, Beauchamps Solicitors
The IOC has rejected the latest bid from the European Broadcasting Union (“the EBU”) for the rights to the 2014 Winter Olympic Games and the 2016 Summer Olympic Games, ending an association which has lasted for over fifty years.
In previous years, the IOC agreed a deal with the EBU for the rights to broadcast the Olympic Games in Europe. The EBU in turn would agree deals with public service broadcasters throughout Europe.
This year the IOC viewed the EBU bid as too low and now two leading sports agencies, Sportfive and Infront Sports and Media, are in the running for the contract. These companies may sell the rights in Europe territory by territory. Reports suggest that the EBU was offering slightly more than the €560 million it paid for the 2010 and 2012 Olympic Games while the IOC is reported to expect closer to €1 billion for the 2014 and 2016 Olympic Games. The decision of the IOC is not completely out of the blue. In a deal worth €23 million, the IOC awarded the rights to the 2014 and 2016 Olympic Games to Fox Turkey, a national broadcaster, rather than the Turkish public-service broadcaster which is also an EBU member. The IOC has also agreed a reportedly €152 million deal with Sky Italia, a pay channel, with the guarantee that it offer some free-to-air coverage.
In Ireland the summer Olympic Games is currently a ‘listed event’ and is shown live on RTE. The Irish legislation is the Broadcasting (Major Events Television Coverage) Act 1999 and the Broadcasting (Major Events Television Coverage) (Amendment) Act 2003 and is derived from EU directives. Although many perceive the Irish legislation as requiring ‘listed events’ be shown on free-to-air television, this is not necessarily the case. Section 4 of the 1999 Act provides that where a broadcaster under the jurisdiction of the State acquires the exclusive broadcasting rights to a ‘listed event’, it cannot broadcast the event unless the event has been made available to a ‘qualifying broadcaster’ on the request and payment of reasonable market rates by the ‘qualifying broadcaster’. But what if the ‘qualifying broadcaster’ can’t agree (or afford) a reasonable market rate? Section 5 of the 2003 Act provides for an arbitrator to determine the reasonable market rate. No provision is made for where two or more ‘qualifying broadcasters’ seek to broadcast the event. In Ireland a ‘qualifying broadcaster’ is a free-to-air station which has 95% or greater coverage (or 90% where there are less than three stations who meet the 95% threshold). That said, for commercial reasons, it is almost inconceivable that the Olympic Games would not be shown on free-to-air television, although if a private sports agency obtains the rights to broadcast the Olympic Games, they will become much more expensive.
In the UK David Davies, former executive director of English soccer’s Football Association, has been appointed to lead a review of the UK’s ‘listed events’. The list currently is broken into two categories: events that cannot be shown exclusively live on pay-television and events which can be shown exclusively live on pay-television but of which highlights must be shown on free-to-air television. It is reported that the list is being reviewed in light of the pending switch to digital broadcasting which will be complete by 2014, however there may be other factors at play. The challenge to the UK’s ‘listed events’ legislation mounted by FIFA and UEFA in the European Court of First Instance may have led the way towards this review (please see Beauchamps Sport Update Volumes 13 and 20).
The Olympic Games are designated by the UK’s Department for Culture, Media and Sport as a ‘listed event’ meaning it must be broadcast on free-to-air television. The legislation requires broadcasters who have 95% coverage in the UK and who are free-to-air to be allowed to broadcast ‘listed events’. A likely bidder for the broadcasting rights to the Olympic Games in the UK is BSkyB which is projected to have an adequate number of subscribers to qualify to broadcast listed events by 2014, but as the list currently stands, BSkyB would need to air the Olympic Games on free-to-air channels. It is possible that BSkyB could air the Olympic Games on free-to-air television, reaping in the financial benefits from the advertising potential.
Article obtained from www.beauchamps.ie, the website of Beauchamps Solicitors. Article reproduced with their kind permission.
For more information, contact Gary Rice
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