National borders in Europe re-examined for TV exclusivity

The advocate general to the top European Union court said last week that viewers should have the right to buy pay-TV broadcasts from any provider within the bloc of 27 nations. If the court honors the request, the move could tear down national borders in Europe’s TV business and have a huge impact on broadcasters’ exclusivity rights there.

Like in the United States, European TV markets are divided along geographical lines. In Europe’s 27 nations, however, TV rights are sold by country. The advocate general, an adviser to the court, said such arrangements are incompatible with the European Union’s single market in goods and services.

“The exclusivity rights in question have the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of the freedom to provide services,” said Juliane Kokott, the advocate general to the European Court of Justice.

The opinions of an advocate general are not binding, but the court follows them in the vast majority of cases.

The issue has risen in Europe due to a lawsuit involving several global media companies familiar to Americans. The suit addresses a situation in which many Europeans watch satellite TV by unscrambling foreign signals, thus avoiding the local providers who have rights to the signals.

In Britain, some pubs buy decoders to show Greek satellite broadcasts of English Premier League soccer matches, undercutting British Sky Broadcasting, whose broadcasts of the same matches cost more. In a case now before the European court, the owner of a pub in Southsea, England, was sued by the Premier League for doing just that.

The league has a $2.9 billion three-year domestic rights deal with Sky. Its biggest shareholders are News Corp. and the ESPN sports network, which is owned by Walt Disney.

If the court rules in favor of the advocate general, the implications for rights holders could be significant, Paul Dixon, a lawyer for Karen Murphy, the pub’s owner, told The New York Times.

“This would make it unlawful to partition the European television market into different territories,” Dixon said. “Any citizen of the EU could buy any television service from any provider in the EU.”

Such a court ruling would please European Union lawmakers, who want to break down barriers to a single EUmedia market, including licensing restrictions. However, for media rights owners, including sports leagues and Hollywood studios, it could be a major financial hit to the lucrative multination deals.

“If the European Commission wants to create a pan-European licensing model for sports, film and music, then it must go through the proper consultative and legislative processes to change the law rather than attempting to force through legislative changes via the courts,” the Premier League said in a statement.