What is the "black-out" rule in football and is it lawful?

Published 19 December 2018 By: Alex Haffner, Thomas Edwards

The black-out rule

The black-out rule dates back to the late 1950's and permits national football associations in the EEA to "block" live games being broadcast in their territories during certain hours on a Saturday or Sunday.

The black-out rule derives from Article 48 of the UEFA Statutes. The rule states that:

"member associations shall have the exclusive rights to broadcast and use, as well as to authorise their broadcast or use by picture…matches which come within their jurisdiction, either live or recorded."

The rule goes on to state that:

"Each member association may decide on two and a half hours on a Saturday or a Sunday during which any Transmission of football may be prohibited within the territory."2

The rule is enforced by UEFA, who ask each football association to elect whether or not to impose such a black-out each year. The member association then notifies UEFA prior to the season and UEFA enforce the ban.3 At present, the rule is only enforced in England, Scotland and Montenegro. The rule applies not just to the broadcast of any domestic games, but to any football game of any nation during this period. The rule applies to live or recorded football matches and applies to any platform of transmission (including online streaming).4

As is well known, The FA has chosen to exercise the rule and prohibits the transmission of live matches between 2:45pm and 5:15pm on Saturdays. Eleven recently broke rank and breached the rule when it decided to broadcast the La Liga match between Barcelona and Bilbao and then further breached the rule one week later when it broadcast Getafe v Levante.5 The move to broadcast these games caused Eleven to come under pressure6 from the English Premier League (EPL), Football League (EFL) and The FA. Whilst Eleven has backed down7 from broadcasting further games for now, it has said it intends to challenge the UEFA rule in future.

The black-out rules were ostensibly created to encourage football fans to attend live football games, or to play amateur football for their own local football clubs.8 The logic was that by allowing games to be broadcast on TV during the time when most fans either play football or go and watch their local team play, it may cause fans to stay at home and watch games on TV instead. There were serious concerns that, if left unchecked, this would have a negative impact on the finances and attendances of the grassroots football.

It is arguable that these motives are no longer relevant when considering if the black-out rules should still apply. Clubs in the top leagues of English football, for example, now derive much more income from broadcast rights than ticket sales. However, it is worth considering that such a rule may still contribute to the financial success of lower league clubs.

Legal challenge

The rules may be open to challenge under legal grounds for a breach of the EU competition rules. Article 101(1) of the TFEU9 prohibits any agreement or decision which affects trade between Member States and restricts or distorts competition in the internal market. The argument could be run that by prohibiting broadcasters from around the EU from broadcasting matches during the blackout period, the market of televised football games is being restricted. Not only does this affect broadcasters who have purchased legitimate rights to televise matches taking place at this time (such as Eleven), but it also affects fans as their choice of match is completely restricted during this period.

However, there are recognised exceptions and exemptions to the prohibition in Article 101(1) of TFEU, of which two may be relevant here.

Firstly, the exception laid down in Meca-Medina10:

"Not every agreement between undertakings or every decision of an association of undertakings which restricts the freedom of action of the parties or of one of them necessarily falls within the prohibition laid down in Article [101(1) TFEU]. […] account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects and, more specifically, of its objectives. It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives […] and are proportionate to them."[42]

In applying this to The FA black-out rule, if The FA can show that there is a legitimate public interest objective (for example protecting grassroots attendances and other policy-based justification) and the measure is proportionate to achieve those aims then it may well be that the black-out rule would not fall within the scope of the EU competition rules altogether.

In addition, in every restriction of competition argument, the concept of appreciable restriction must be considered.11 In brief, any agreement which restricts competition may fall outside the scope of Article 101(1) if it can be shown that the effect of the restriction is insignificant, or not appreciable. There is a good argument to say that the black-out rules does not appreciable restrict competition, given the amount of live football fans across the country still have access to.

If the Meca-Medina argument were to fail then The FA and UEFA may be able to rely on article 101 (3) TFEU, which states that any decision or agreement which contributes to improving the production or distribution of goods or promoting technical or economic progress whilst benefitting consumers may be exempt from Article 101.12 This is known as an "individual exemption". The argument here would likely be that the black-out rule benefits the economics of clubs (especially smaller clubs) and that it also contributes to the growth of the game. However, article 101 (3) further requires that any restriction of competition is "indispensable", meaning that it goes no further in restricting competition than is absolutely necessary to preserve any economic or consumer benefits. So, to put things in the current context, is the article 48 rule the least restrictive option available to preserve the identified benefits of maintaining attendances, participation levels or club finances?

Eleven's approach

Eleven, unsurprisingly, do not believe that the black-outs are suitable for the modern game and have identified a number of arguments against the rule, including:

1. Eleven contend that fans consume the modern game very differently to how they did in the 1950's when the rule first came into operation. Eleven believe that sports, much like other forms of entertainment, have to be instantly accessible to fans no matter where they are or what devices they are watching on. It is undoubtedly true that fans now engage with the game through various devices and aren't necessarily watching sports on linear channels. 13

2. Eleven also argue that other sports (such as rugby) are available in England during the blackout period. Their contention is that if fans want to go and watch a live football match they will, and this is a different form of entertainment to consuming matches on TV. Eleven believe to deny fans the right to watch football on TV during this period will drive them to other sports, or seek to find other ways to watch the football.

3. This leads to Eleven's primary reason for opposing the blackout. Eleven have stated that denying fans the legitimate right to watch games during the blackout period will just force fans to watch pirated streams of games (or even to watch games through betting sites, who are allowed to show games during this period). Eleven have stated that piracy is possibly the biggest obstacle to the growth of OTT sports services, and by strictly enforcing the black-out rules it forces fans to develop increasingly sophisticated ways to pirate sports content.14

These issues are perhaps even more pertinent since recent reports have recently surfaced that Eleven are reconsidering the viability of their UK operations in the face of lower than expected subscriber numbers.15 If the black-out rule prevent broadcast providers such as Eleven from showing football which they own the commercial rights to then there is a suggestion the rule is restricting the growth of new OTT providers.

Ofcom

The issue of the broadcasting of English football matches during the black-out period was briefly considered by Ofcom16 when considering Virgin Media's competition law complaint against the English Premier League (which was closed in 2016).17 One of Virgin"s complaints was that the EPL restricted the number of matches available for live broadcast so pushing up the price of live rights and disadvantaging Virgin as an acquirer (from Sky and BT Sport) of channels containing those matches. As part of its deliberations, Ofcom carried out consumer research to find out the attitudes of football fans towards broadcasting more live matches on TV.

At the time of the investigation, the EPL had just increased the number of matches available for live broadcast, which meant scheduling more matches outside of the black-out window. Ofcom's investigation revealed that a fifth of fans wanted to see more live games on TV, and another fifth wanted to see a greater variety of matches.

Ofcom also considered the match-going habits of EPL fans. Ofcom found that "among match-going fans, a high proportion said that the day of the week and kick-off time was of high importance, with over two-thirds of this group identifying the Saturday 3pm kick off as their preferred time to attend." To many fans the 3pm Saturday slot still represents the prime weekend football slot and many fans still want to go and watch their games at this time.

Ofcom concluded that a balance would need to be struck between the desire of fans to watch more live games, and the potential disruption to match going fans to these games being rescheduled outside of the black-out period.

Ofcom's investigation does raise the issue that if more games are to be scheduled for broadcast but must avoid the black-out window, then fans who want to watch live games will be the ones who suffer the inconvenience. It is arguable therefore that rights holders cannot have it both ways, and must consider whether they are more inclined to protect the grassroots game, or benefit from the lucrative extra television rights money.

European Court of Justice (ECJ) in the Murphy case

The black-out issue was previously brought before the ECJ in 2011 in the cases of QC Leisure18 and Murphy19.In brief, the ECJ discussed the legality of foreign decoding devices being used to watch EPL matches against the express wishes of the EPL. This, the Premier League argued, was in violation of the licensing agreements the Premier League had in place, and was also in violation of The FA black-out rule (as pubs were using the devices to broadcast EPL games during this period). The case was decided on the basis of the internal market restrictions, rather than competition law, but did provide a useful insight into the ECJ's opinion on the legality of the black-out rule.

The tone of the ECJ was set in the opinion of Advocate General Kokott.20 The AG stated,

"Measures to enforce exclusive broadcasting rights are at odds with the principle of the internal market,"[7] and went on to state,"It is, in fact, doubtful whether closed periods are capable of encouraging attendance at matches and participation in matches. Both activities have a completely different quality to the following of a live transmission on television. It has not been adequately shown to the Court that the closed periods actually encourage attendance at and participation in matches."[209]

The AG went on to say that matches were shown during this period in France, Germany and other European countries and this has no effect on live attendances.

Whilst the AG did acknowledge there were certain competition law benefits to barring the use of decoders (for example, to protect competition between pubs who relied on domestic licences against those who imported them) [204], the AG believed that the rules of the internal market and freedom of services could not be infringed by a black-out rule which the AG saw no purpose in.

The ECJ stated:

"the restriction which consists in the prohibition on using foreign decoding devices cannot be justified by the objective of encouraging the public to attend football stadiums."[124]

It is clear that in judging the balance of Article 101 of TFEU against the exception that the rule is for the benefit of the game, the ECJ believed that the restraint of the internal market argument was much stronger.

European Commission

In 2001 the Commission also handed down a Decision relating to Article 48.21 In brief, the Commission decided that Article 48 did not breach the competition law rules. The basis of the Decision was the following reasons:

1. The black-out period is for a maximum of 2 ½ hours each weekend;

2. The blocked hours must correspond to the main domestic fixture schedule;

3. This prevents any arbitrary decision to block hours;

4. Associations and broadcasters can choose to schedule events well in advance to avoid the black-our period;

5. Broadcasters may be prevented from broadcasting a particular match but that there are plenty of other matches from the same competition which they can broadcast;

6. The Commission did not rule on the effect of the amateur participation and stadium attendance because they deemed the rules had no adverse effect on the broadcasting of football.

Although this case may now have little modern legal relevance, UEFA and The FA might raise this case in defence of the black-out rule given the court"s statement that: "There is consequently no service at this stage for which the broadcasting regulations could imply an appreciable restriction."[23] The Commission has already stated that the negative effect of the black-out rule on competition is not appreciable enough to be considered a restriction of competition.

Current relevance of the black-out rule

There has, to date, been no conclusive data which demonstrates attendances would suffer as a result of the rule being abolished. Indeed, as pointed out above, the lack of a black-out rule across the rest of Europe has not affected attendances22 in those leagues at all when compared to the UK.23

However, there is still a risk that allowing the broadcast of live games during the main domestic fixture period would have an adverse effect on grassroots attendances and participation. It is also debatable whether viewers are indeed disadvantaged by the black-out given the plethora of other live sporting content available to them.

What is clear is that this issue will not go away any time soon, particularly with the rise of OTT broadcasters such as Eleven who are hungry for more live content. There is therefore a real possibility of a legal challenge to the black-out rule, and the future of the rule will depend on the balance between protecting the grassroots game and allowing market forces to dictate what content gets shown when.

Views 5324

• Tags: Broadcasting | Competition Law | English Premier League (EPL) | Europe | European Court of Justice (ECJ) | Football | Football League (EFL) | The FA | UEFA | UEFA Regulations governing the implementation of Article 48 | UEFA Statutes | UK

Related Articles

• How agents are regulated in the NFL and the potential lessons for FIFA
• Private investment into sport - what governing bodies need to know
• Why sports federations are under increasing scrutiny from competition authorities

Author

Alex Haffner

Alex is a Partner in the Commercial, Sports and IP Team at Fladgate LLP, specialising in the sports, technology and media sectors.

• This email address is being protected from spambots. You need JavaScript enabled to view it.
• https://www.fladgate.com
• Full Profile

Thomas Edwards

Tom Edwards is a trainee solicitor in the sports business group at Fladgate LLP having joined the firm in 2017. 

 

• This email address is being protected from spambots. You need JavaScript enabled to view it.
• https://www.fladgate.com
• Full Profile