Oct. 3 (Bloomberg) -- English soccer’s Premier League and European governing body UEFA risk losing part of their revenue from exclusive television rights sold to broadcasters such as British Sky Broadcasting Group Plc in a ruling by the European Union’s highest court tomorrow.
The EU Court of Justice in Luxembourg is set to decide whether the Premier League’s exclusive regional contracts to televise its soccer matches are lawful. An adviser to the court in a non-binding opinion in February said they are not.
The Premier League is home to some of Europe’s most successful clubs including Manchester United, and Liverpool. The league started a three-year 1.8 billion-pound ($2.8 billion) U.K. television contract in August 2010, and receives a further 1.4 billion pounds from the sale of international broadcast rights.
“The biggest fallout is probably for the Premier League,” Daniel Geey, a lawyer at Field Fisher Waterhouse LLP in London. “Their 1.8 billion pounds contract, of which they’re in the second year of three, could potentially be deemed illegal and have to be renegotiated.”
The EU court case was partly triggered by a U.K. dispute involving Karen Murphy, the owner of the Red, White and Blue Pub in Southsea, close to Portsmouth, England. She faces a criminal lawsuit after buying a decoder card that allows her to show Premier League games from Greek television. BSkyB, the U.K.’s biggest pay-TV operator, said the cards are “illicit” because they’re being used outside their specified area.
‘Generations to Come’
Tomorrow’s EU judgment is “going to determine the way in which broadcasting rights generally, not just live-football, are marketed in the EU for generations to come,” Paul Dixon, Murphy’s lawyer, said in a phone interview.
The EU court follows its advisers’ opinions most of the time.
While there’s a chance the EU court won’t follow its adviser’s opinion, there are, from a competition law perspective, “very, very few sectors in the EU” where absolute territorial protection is permitted, said Geey.
“At the moment, the majority of the Premier League’s European money comes from the U.K.,” said Geey. If the decision goes against them, “it may be they don’t get as much money for their rights as they’re getting at the moment.”
Geey said the ruling may also deal a blow to European soccer’s governing body UEFA, which parcels up broadcasting rights to competitions such as its elite Champions League on a territorial basis.
Global broadcast rights to the competition, won by Barcelona in May, are worth about 1.1 billion euros a year. Unlike the Premier League, which gets most of its revenue in the U.K., UEFA’s income is spread more thinly from sales of rights across the continent.
BSkyB spokesman Matt Beake declined to comment, referring requests to the Premier League. UEFA didn’t respond to a request for comment.
Broadcasters may benefit from a ruling that restricts exclusive regional contracts, according to Graham Shear, a partner in the litigation department of Berwin Leighton Paisner LLP in London.
“It could be used as a weapon by the broadcasters for a price negotiation,” said Shear. “It’s in their interest to try and force down the price they’re paying for those inherent rights, whilst protecting their own revenue.”
The cases are C-403/08, Football Association Premier League Ltd, v QC Leisure and C-429/08, Karen Murphy v Media Protection Services Limited.
--With assistance from Amy Thomson in London. Editors: Peter Chapman, Simon Thiel
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