EU ruling threatens int'l TV biz

LONDON -- In a landmark ruling for the broadcasting industry, Europe's highest court has ruled that U.K. sports fans can watch live sports matches on cheaper foreign decoders. The ruling, which centers around Brit pub landlady Karen Murphy who, five years ago, started using Greek firm Nova via a decoder to show Premier League soccer games to her customers, is likely to trigger wider ramifications for all broadcast rights holders in Blighty and the EU. Murphy paid around 8,000 ($12,300) in fines and costs because she used a foreign satellite TV provider to showcase Brit soccer games rather than going through U.K. pay TV outlet BSkyB, which paid more than $1.54 billion for the rights to Premier League soccer matches. Murphy appealed the case to the European court of justice, which ruled on Tuesday that the Football Assn. Premier League cannot prevent individuals from looking for better deals for TV sports subs from European broadcasters. The court found that the sale of rights on a country-by-country basis broke the EU law. While increased competition could strike good news for consumers and pub landlords across Blighty, the ramifications for rights holders, content producers and broadcasters could be damaging. For instance, movies that are currently released in specific chronological windows in each country due to exclusive territorial licensing could see the erasure of a territory-by-territory distribution structure via television. Exclusive territoriality allows broadcasters to tailor content locally to suit local consumer demand in a given country or region. The destruction of this model could lead to fewer broadcasters. Writing in U.K. newspaper The Times, Stephen Garrett, chairman of Kudos Film and TV and exec chairman of Shine Pictures, expressed why the content industry had reason to worry. "We finance our productions by selling rights on a territory by territory basis, a strategy that self-evidently only works if it is exclusive," he said. "An episode of 'Spooks' costs around 1 million ($1.54 million) to produce and employs hundreds of people. High quality entertainment is not cheap and as a producer, Kudos has effectively to mortgage these territorial rights in order to secure the upfront funding to make the show in the first place. "The incentive for broadcasters to make this investment is the guarantee that they will be the only one screening the film on their turf when it is released, which means maximum ratings and advertising revenues. Without it why would they bother to invest?" He added that the ruling could see smaller companies "squeezed out of the market." "Broadcasters would find themselves forced to buy more rights than they need in order to secure the ones that they really want, creating a fictitious and fundamentally unsustainable market for unwanted rights. Only the biggest broadcasting companies could afford to play such a game, fuelling concentration detrimental to media pluralism and competition." However, as sporting events have no intellectual properties while theatrical performances do, it is still unclear how this ruling will play out to the wider broadcasting industry. Currently, the cost of individual subscriptions for BSkyB's sports package is not hugely more expensive than its European counterparts and a foreign subscription will of course be susceptible to localized content with any English language pics or TV programs subtitled or dubbed accordingly. Contact Diana Lodderhose at diana.lodderhose@variety.com

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