In the end it was a comprehensive victory for the Premier League, the BBC and BSkyB. There was certainly no need for a penalty shoot-out when Mr Justice Ferris handed down judgment in respect of the Director General of Fair Trading’s reference of three agreements (concerning the television broadcasting of Premier League football matches by BSkyB and the BBC) to the Restrictive Practices Court.
In essence, the case concerned the review by the Restrictive Practices Court of the Premier League’s exclusive broadcasting arrangements with BSkyB and the BBC.
The court was asked to consider and decide whether certain restrictions in the agreements imposed on member clubs of the Premier League were contrary to the public interest.
This included the restriction on member clubs of the Premier League (in accordance with its rules) which conferred on the Premier League itself the exclusive right to grant licences to broadcast on television Premier League matches. The clubs themselves accepted reciprocal obligations not to grant licences for that purpose.
As a result of this, the Premier League chose to grant BSkyB an exclusive licence to broadcast 60 Premier League matches live during each season until the end of the 2000-01 season. The BBC was also granted the exclusive right to broadcast on television recorded highlights of Premier League matches until the end of the same season.
Other supplemental restrictions were also referred to the court, which reinforced the exclusive rights of BSkyB and the BBC, and affected the ability of Premier League clubs to engage in competitions other than the Premier League.
The agreements referred to the court by the Director General of Fair Trading were referred in accordance with the provisions of the Restrictive Trade Practices Act 1976. This is due to be repealed shortly by the new Competition Act 1998.
The Director General of Fair Trading, in his role of promoting and safeguarding the economic interests of consumers, alleged that the various restrictions were contrary to the public interest. He submitted that the restrictions, in preventing clubs from individually selling the rights to televise their games and taking part in other competitions, meant that BSkyB had a dominant position in the supply of sports channels in the UK.
In joining together and selling their rights collectively, as a league, the Premier League clubs were acting as a cartel. This led to higher prices as, if there were a number of sellers on the market rather than just one, there would be more competition, which would lead to more choice for consumers and lower prices.
By making games available to other broadcasters, this would also increase competition in broadcasting and hopefully lead to new forms of broadcasting development, including new regional programmes covering the Premier League matches of local clubs.
It was also argued that, by freeing up the market in rights to live coverage of Premier League games, competition in the pay-TV market would increase. Further, as only 60 Premier League games out of a total of 380 in any season were shown on BSkyB, there was ‘unsatisfied demand’ on the part of the public. By enabling other broadcasters to show games, the fans of certain clubs had more chance of seeing their clubs on television during a season.
The decision of the
Restrictive Practices Court
The terms of the Restrictive Trade Practices Act 1976 placed the burden on the Premier League, BSkyB and the BBC to satisfy the court that the restrictions were not contrary to the public interest. This required convincing the court of two things: firstly, that each restriction could pass through one of the prescribed ‘gateways’ set out in the Act; secondly, that the restriction was not ‘unreasonable’, having regard to the balance between the circumstances that enabled it to pass through a gateway and any detriments to the public which resulted from acceptance of the restriction.
The court decided that the restrictions set out above could successfully pass through one of the gateways set out under the Act, namely, that the removal of the restrictions would deny the public “specific and substantial benefits or advantages”.
The court was concerned that if the restrictions were removed then clubs of the Premier League might suffer a substantial decrease in their revenues, which would lead to a knock-on effect on the quality of their stadiums and playing squads. Equally, if the restrictions were removed, the ability of the Premier League to ensure an equitable division of television revenues between all member clubs of the league would be lost or seriously diminished, as would the ability of the Premier League to confer benefits on football outside of the league itself.
The court also felt that competition between broadcasters would be impeded, and not encouraged, if the restrictions were removed as competition was partly dependent on them being granted exclusive rights in sporting events.
When balancing the benefits and detriments to the public interest which resulted from the acceptance of the restrictions, the court felt that only limited weight could be accorded to the detriments pointed out by the Director General of Fair Trading. The court was not impressed by the Director General’s argument that, as a result of the present arrangements, the public’s demand to see more matches broadcast on television was going unsatisfied.
In conclusion, the court felt that the benefits and advantages, which would be lost if the restrictions ceased to have effect, would be greater than the detriment as a result of them being in place. The court felt they were not unreasonable and were not against the public interest.
