Home Information Cases Office of Fair Trading v Premier League (1999)

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Office of Fair Trading v Premier League (1999)

Summary

Restrictive Practices Court decision on the Premier League championship football broadcasting arrangements. The three main restrictions/provisions were within the terms of the Restrictive Trade Practices Act 1976 and were accepted under the 1976 Act by each member club of the Premier League. The court concluded that the restrictions were not unreasonable and not against the public interest.

Facts

Decision of the Restrictive Practices Court on whether or not any restrictions relating to the provisions of services were contrary to the public interest. The main provisions related to the arrangement for the broadcasting on television of football matches played as part of the Premier League championship. There were three main provisions the court was required to rule on: (i) the Premier League Rules, especially Rule D 7.3 which provided, inter alia, that no Premier League matches were to be televised without the consent of the board of the Premier League and by accepting the Rules the member clubs of the Premier League restricted their ability to sell the television rights in their matches on their own behalf; (ii) the Sky Agreement, especially clause 2.2 which gave British Sky Broadcasting Ltd an exclusive right to broadcast a number of live matches over a certain period and where the Premier League agreed that it would not grant to anyone other than Sky the right to attend (for broadcasting purposes) any Premier League matches during the term of their agreement, with an exception relating to the BBC; (iii) the BBC Agreement, especially clause 2.3 (having a similar effect to the Sky clause above), whereby the BBC was given the exclusive right to attend certain Premier League matches for broadcasting purposes. The questions were, inter alia: (1) whether the Director General was correct in his contentions that the contractual provisions resulted in the acceptance of restrictions which were within the terms of the Restrictive Practices Act 1976 and were accepted by the individual member clubs of the Premier League and not by the Premier League alone; (2) whether or not each of the restrictions were contrary to the public interest.

Held

(1) The first question involved complex issues of law. In summary the three restrictions ie the contractual provisions above, were within the terms of the 1976 Act and they were accepted, or were deemed to have been accepted under the 1976 Act, by each member club of the Premier League. In undertaking to exclude other broadcasters from their grounds, the individual member clubs accepted the imposition of restrictions upon their provision of services. The admission of a spectator constituted more than a mere licence to enter the ground (which was not a restriction upon services under In re Ravenseft Properties Ltd's Application (1978) 1 QB 52). It was a composite right which included the entitlement to remain in the ground until the end of the match. The main purpose was to provide entertainment (Hurst v Picture Theatres (1915) 1 KB 1). It was no different in the case of a broadcaster present for commercial purposes, who was as much the recipient of a service as a spectator. Thus the main contentions by the Director General were accepted.

(2) The respondents, that is the Premier League, British Sky Broadcasting Ltd and the BBC had to satisfy the court, inter alia, that each restriction passed through one of the prescribed "gateways" and that the restrictions were not unreasonable with regard to the balance between benefits and detriments. For the restrictions to pass through the gateway primarily relied upon, that is gateway (ii) as defined in s.19(1)(b) of the 1976 Act, the court had to be satisfied that the removal of the restriction would deny the public of "specific and substantial benefits and advantages". The benefits which the public would be denied were sufficient to enable the three restrictions to pass through the gateway (subject to the requirement that they were "not unreasonable" having regard to the balance between benefits and detriments). In particular: (i) The ability of the Premier League to sell television rights in the Premier League championship as a whole would be lost or substantially diminished. (ii) The member clubs of the Premier League would suffer a substantial diminution in their income and would be unable to improve the quality of their stadia, facilities, playing squads and the provision of other public benefits to the same extent as had been achieved with the restrictions in place. (iii) The ability of the Premier League to achieve an equitable division of television revenue between its member clubs and thus maintain and improve competitive balance would be lost or seriously diminished. (iv) The ability of the Premier League clubs to confer benefits on football outside the Premier League would be seriously diminished. (v) Competition between broadcasters, which partly depended on their ability to be granted exclusive rights in sporting events or programme material, would be impeded and not encouraged.

(3) On the balance of benefits and detriments the restrictions gave rise to some detriments. (i) Less Premier league football was shown on television than would have been the case if the restrictions were struck down. (ii) If the restrictions were struck down the court thought it likely that there would have been a greater choice of programmes comprising Premier League matches. The court was particularly concerned about the inability of broadcasters to offer a wider range of programmes based on recorded matches and that the restrictions had inhibited the development of pay-per-view methods for Premier League football, for example. However for a number of reasons the court concluded that it was not possible for them to attempt to prescribe a new regime which gave a greater latitude in those respects without also causing the public to be denied the benefits or advantages mentioned above in (2). This was because the 1976 Act required the court either to approve or strike down a restriction completely. Given those stark alternatives the court only gave limited weight to the detriment of a reduction in choice of programmes. (iii) If the restrictions ceased more broadcasters would be likely to have programmes based or including Premier League football and it was argued that presentation and coverage would improve (although it was not suggested that presentation by Sky or the BBC was less than excellent). No obvious deficiency was identified in the existing presentation and coverage and a broadcaster who wanted to adopt a fresh approach would have the opportunity of bidding for television rights for the 2001/2002 and subsequent seasons. The court concluded that the restrictions were not unreasonable as the disadvantages suffered by the public as a result of being denied the benefit or advantages which would be lost if the three main restrictions ceased to have effect would be greater than the detriments which it suffered as a result of the restrictions remaining in place. Thus the three main restrictions were not unreasonable and not against the public interest.

All consequential matters reserved.

Chancery Division
Ferris J, BM Currie, DL Summers
Judgment date
28 July 1999
References

LTL 28/7/99 : [2000] EMLR 78 : Times, August 18, 1999