Rights to broadcast sporting events under Italian law.

• Author: Ferrari, Luca

1. Introduction

   In this chapter, we explore the Italian scenario of the very current and ever controversial subject of the ownership of and access to special information with extraordinary commercial and entertainment value -the voice and video dissemination of sports events. The contending parties include the sports leagues and associations, the sports clubs, the players, the powerful media conglomerates, the fans and the public, the regulatory agencies and, of course, the politicians. With such diverse interests and so much economic power at stake, the policies and the rules are fluid and often enigmatic. We strive here to give the reader a workable understanding of this changeable mosaic.

2. The ownership of broadcasting rights - from individual to collective selling

   2.1 The legal background

   Italian scholars traditionally tend to emphasize the importance of a dogmatic and systematic collocation of the situations, which require legal recognition and protection. In relation to broadcasting rights, they have proposed, tried and rejected several possible juristic conceptualizations. All seem to reject the possibility to have such rights fall directly into the notion of copyright. Not so unanimously rejected is the more general classification of the media right to a sport event as a new kind of intellectual property, although it is noted that Italian Law does not provide a general discipline and definition of this category of rights, but rather a limited number of specific and narrowly defined rights (copyright; trademark; patent right etc ...) none of which fits the idea of a right to commercially exploit a football game. No matter how entertaining, a football match does not involve any intellectual creation.

   The scholars' effort is not just an academic exercise. Effective legal protection must be found for a value, which undeniably is the object of investment, interest and negotiation. Hence the importance of its identification as a value, whose ownership or whose control can be affirmed by a court of law. UK courts have come to the prevailing conclusion that such value cannot be the object of an intangible right. Rather, the only available protection is that provided by the property or tenancy of the venue where the event is staged and, by its organization, the right to control access to the stadium or racecourse, admitting spectators under contractual restrictions.

   A similar approach has been adopted in several continental European jurisdictions including Italy (1). However, the latest tendency seems to be that of providing a protection based on the idea of an exclusive right in the sporting event as the result of the specific economic activity (value creation) of the organizer or investor. From an idealistic perspective, it is the right of the organizer of the game not to be deprived of the results of its economic activity and investments, in other words the sports spectacle as a new kind of entertainment not protected by copyright and yet whose value cannot be "siphoned away" to benefit other entities without the consent of the "owner" (2). This perspective coincides with that of the US, where the Courts recognize a right in the commercial value of a sports competition and protection is afforded against "commercial misappropriation" of related goodwill.

   Recognition and protection of business investment is still the principle underpinning of the legal protection afforded to organizers of sports competition, affirming ownership and goodwill in relation thereto. However, while this legal reasoning is generally applicable to any sports event, which commands a relevant TV audience and entails a corresponding broadcasting value, professional team sports broad-casting rights have been the object of specific statutory regulation. In particular, Legislative Decree ("D. Lgs") n.9 of 9 January 2008 (3), the only existing Italian statute governing ownership and commercialization of sports broadcasting rights, applies to professional team-sports' tournaments or championships. The latter, based on current CONI (4) qualifications, are football and basketball top national competitions. Volleyball and rugby, which are certainly well developed and largely professional sports in Italy, are not subject to the statutory provisions as they are still qualified, even at the top level, as amateur sports. On the other hand, professional cycling -also a professional team-sport- is not subject to D. Lgs n.9/2008, since there are no national cycling competitions organized as a championship or tournament (5).

   For the reasons stated above, most of the chapter will focus on the broadcasting regulation applicable to professional football and basketball.

   2.2 Law no.78 of 29 March 1999 and the -gone- age of individual selling

   In 1999, limited to football matches, the ownership issue was settled by statute: "Each Serie A and Serie B Football Club is the owner of the television broadcasting right in codified format" (6). Art. 2 of Law 78/1999 has been for years the only Italian statutory provision, which expressly affirmed ownership of (pay) television broadcasting rights; it certainly constituted an important statement as it reinforced the then prevailing opinion that rights to football events belong to the clubs rather than to the league or federation (7).

   It must be noted that the statute did not define the content and the nature of the pay-TV rights. Indeed, the provision appeared as marginal within a law, whose stated objective was the pro-competitive regulation of the pay-TV market, introducing a 60% cap in the ownership of football pay-TV rights by a single operator in a multi-platform TV context. However, the underlying assumption of the mainstream commentators and jurisprudence, recognizing the existence of a commercial property in sporting events had been established.

   As to the actual owner of such commercial rights, the 1999 legislator stated that, as to football, the broadcasting rights belonged to each club, individually. This appeared in conformity with the broad principle whereby the goodwill inherent in a sports event would be controlled by whomever "holds the keys of the door". By the same token this statutory provision clashed with the ambition of the event organizer -the National Professional League in the case of the Serie A and Serie B championships- to be recognized as the actual owner of such goodwill.

   Although it did not offer a definition and statement of the right to broadcast a sports event, art 2 of Law 78/99 and European Directive n. 89/552 of 3 October 1989 ("Television Without Frontiers Directive") provided a rather solid argument for the legal protection erga omnes of the "sports property", in addition to or in lieu of mere recognition of the power to restrict access to the venue. Notably, the object of the act was very narrow, since it was limited to football and "codified" pay television, with the exclusion, arguably, of other forms of transmission including cable TV, free-to-air TV, radio broadcasting, internet and mobile telephone transmission. Nonetheless, there seemed to be no compelling reasons preventing an extension of the principle, if not the actual rule, affirmed by Law 78/99 to other sports events and other technologies for the broadcasting and transmission thereof.

   The conclusion that envisaged an original right of commercial exploitation of the sports event did not resolve whether original ownership of media rights to championships' or tournaments' matches rested with the hosting club or both clubs participating. Moreover, the question of individual or collective ownership of matches scheduled within a tournament or championship was and possibly still is the object of divergent decisions elsewhere in Europe (8). In Italy, however, the individual ownership of such rights by the clubs was generally undisputed at the time (9). This precept, in conformity with the then only existing statutory statements, rested with the vast majority of the scholars10 as well as with the sports regulators.

   This conclusion was further supported by recent court decisions concerning the commercialization of images of the football games by certain mobile telephone companies. We will later discuss this interesting jurisprudence, but here we stress that all decisions move from the premise that the hosting club is the holder of the rights to the economic exploitation of the game, including its transmission through all media (11).

   Indeed, as we know, Italian clubs had been selling pay-TV rights individually for some years before statutory recognition in 1999 and their entitlement to the negotiation and fruits of such agreements had never been seriously challenged.

   Based on this practice, and possibly taking into consideration the notion that the visiting club may also have rights in the single game and be entitled to a share of the profit thereof, the League had promoted specific agreements among its affiliated clubs to redistribute part of the revenues from gate receipts as well as season tickets and TV-rights licensing. It is noteworthy that these agreements and the ambivalent language of art. 2 of Law 78/99 did not address the issue of possible co-ownership of the visiting club.

   However individual selling and related juristic conceptualizations were swept away, as it often happens, by a stroke of the legislator's pen.

3. Law no. 106 of 19 July 2007 and legislative decree no. 9 of 9 January 2008 (12)

   3.1 Introduction

   At the end of football season 2005/2006 a hurricane hit Italian Serie A, in the form of criminal and disciplinary proceedings against representatives of top clubs, referees and prominent members of the football establishment (including the President of the Italian Football Federation). A network of secret alliances and relationships had been discovered, capable of influencing the activity of referees. Although investigations, mainly based on months-long tapping of mobile telephones, did not prove...