All sports for free! A difficult match? Right to information in the digital broadcasting era.

• Author: Lefever, Katrien
• Position: ARTICLES

1. Introduction

   Needless to say that sport fulfils a vital function in our society. As the European Commission argues in its white paper on sport, "sport is a growing social and economic phenomenon which makes an important contribution to the European Union's strategic objectives of solidarity and prosperity". (1) According to the famous Latin saying "mens sana in corpore sano", sports contribute to the physical and psychological wellness of the people. Moreover, sports hold an enormous potential for community building regardless of age or race by fighting against racism and violence and by promoting volunteering and active citizenship. But more than ever, sports have developed into a dynamic global business environment. Broadly defined, sports' macro-economic impact in the European Union is estimated at 407 billion Euros, accounting for 4.58% of EU GDP. (2) This economic value of sports is exemplified by the top wages sports stars earn and especially by the multibillion dollar broadcasting rights contracts, which have played a major role in the establishment of professional sports and the media sport content economy.

   The exploding broadcasting rights marketplace is considered one of the driving forces behind this fast-growing share of sports within the European economy. In today's hypercompetitive media climate, these sports rights have become increasingly important for broadcasters as well as platform operators to differentiate from other competitors. In this era of digital and mobile television platforms, live sports coverage has shifted from terrestrial and free-to-air (FTA) television towards digital premium television. For these new platforms, the acquisition of live sports rights became a competitive advantage to drive up subscription uptake and to reign supreme in the digital premium content marketplace. However, as these premium platforms including pay-television require an additional subscription payment, analogue households could be denied access to major sports events. Contrary to the United States, the European Commission has introduced the list of major events mechanism within its regulatory framework to guarantee access to these sports events and to safeguard the right to information of the public. This mechanism should allow Member States to assure free-to-air coverage of events of major interest for society. Although the European Commission claims that this major events mechanism is working satisfactorily, at least some critical assessments should be made.

   Because issues on sports broadcasting rights have mainly been studied either from an economic or from a legal perspective, an interdisciplinary approach is handled in this article. As the transformation of the media ecosystem may affect the sale and application of media sports rights in a fundamental manner, the article kicks off with a political economy of the digital sports broadcasting market. In this section, the digitised value chain and the established synergy between sports and digital media are emphasised. Afterwards, the legal implications of exclusive sports coverage for major events with a national interest are critically explored with a specific focus on the Flemish legislation.

2. Digital sports broadcasting market

   For decades, sports and the media, in particular broadcasting, have developed a self-interesting relationship allowing them to gain benefits from their complementary interests. Sports act as a pool for content and audience for broadcasters, which function as a revenue source and a promotion tool for sports. (3) This interdependence between sporting organisations, media companies and public society is often referred to as the sports/media complex. (4) This relationship originates from the end of the 18th century when newspapers began to cover sporting events. This clearly meant a win-win situation for both parties: sports coverage enabled newspapers to sell more copies and to attract manufacturers interested in advertising their products to these committed sports readers while sporting organisations gained benefits from this media exposure to drive up stadium attendance.

   As ticket sales represented the major revenue source for sporting organisations at that time, the introduction of televised sports was originally feared to cause depletion in stadium attendance because people would attend the events directly from their own living room. However, live television sports soon demonstrated to be a fan builder and a financial engine for sports clubs as well. For broadcasters, sports programming became an important competitive feature to attract a large crowd of viewers with significant buying power that was interesting to target by advertisements. (5) Although sports clubs' income heavily inflated thanks to the increased media exposure, the economic model of European sports was still built on stadium attendance and ticket sales. (6)

   However, recent policy developments towards liberalisation in the European broadcasting market have fundamentally reshaped sports' financing model thanks to the expansion of the broadcasting industry. The emergence of digital technology has further broadened the media ecosystem and has multiplied the number of delivery platforms and sports channels. This has in turn fundamentally transformed the structure of the sports business, which has become heavily dependent on television rights as its primary revenue source. (7) In today's era of abundance, digital premium channels have taken free-to-air television's place as primary medium for live sports coverage. (8) For platform operators, acquiring sports rights was instrumental to secure a strategic market position and to establish a basis for a sustainable development of the emerging digital television landscape. Next to offering a basic package targeting a broad audience while containing generalist channels, television aggregators provide succesful content such as recent Hollywood movies and large sports competitions on premium channels that are only accessible for end-users by paying an extra subscription fee. (9) By means of pay-per-view (PPV) games and thematic sports channel boutiques, a direct monetary exchange between media sports providers and sports fans has been established, which is clearly challenging traditional television business ans viewing practices.

   2.1. The new media sport ecosystem

   Traditionally, Porter's value chain concept (10) has been widely applied to analyse the roles of all stakeholders involved in the value creating process within the broadcasting industry as it maps the position these stakeholders occupy in the flow of value-adding activities. A firm acquires a competitive advantage when holding a crucial stake in this chain of activities (such as the exploitation of sports media rights or the distribution of content) where value is created through a sequential line of stages in which suppliers add value and pass their output to the next intervenient in the chain until the product or service finally reaches the end-user. Four consecutive stages, from creation to consumption, can be distinguished in the value chain in which established actors are assumed to play fixed roles: (11)

1. Creation and production: in this stage, content is invented, financed and produced. Beside production companies, rights holders (and rights intermediaries as they reduce transaction costs) are an important part of this stage of the value chain.

2. Aggregation: aggregators are dealing with scheduling programmes in channels (broadcasters) and bundling these channels in packages to be distributed (platform operators). In this stage, added value is created by the inclusion of new services and applications in broadcasting (such as interactivity and on-demand features).

3. Distribution: distributors are making television content widely accessible through the network infrastructure they exploit. In...