Will sports rights holders eventually have to help bail out 3G mobile operators?

The announcement this week that the EC Commission competition department is to open an industry-wide investigation into the sale of sports rights to the Internet and 3G mobile operators, under a rarely used procedure that could lead (eventually) to some individual decisions by competition authorities at national level, is unlikely to set pulses racing. It nevertheless constitutes a medium and long term threat to sports rights holders (and particular football rights holders) which they need to take seriously and respond to strategically.

In its recent and unsuccessful intervention in the English Premier League case, the EC Commission was concerned with bundling of TV Rights with new media/UMTS Rights and sought to ensure that access to key content for 3G networks remained open but without much success. The Commission’s intervention in that case lacked any heavyweight political or commercial support so it is interesting that in its press release announcing this enquiry, Mario Monti specifically refers to the need to assist 3G mobile operators (all of whom of course overpaid for their licences).

For 3G operators, the hope must be of there being eventually a freeing up of the market for new media rights, so that broadcasters will no longer be able to hog and under exploit them (as the EC Commission alleges) by paying an exclusivity premium to rights holders in order to stop cannibalisation of their key broadcasting revenue streams.

This kind of Commission intervention raises the interesting theoretical issue whether it is right to use competition law to make certain markets more financially solid (3G mobile) at the expense of others (rights holders of football content who presumably won’t get exclusivity premiums anymore).

However, football’s concern is more practical. Despite the current depressed climate, which makes the chances of clubs thinking beyond next Saturday rather remote, the challenge must be for them to retain some control over the content they produce and not let it become part of someone else’s agenda. This must involve revisiting issues such as setting up their own broadcasting and distribution channels or investing in a major lobbying effort to head off the serious threat the Commission’s enquiry presents in the medium term.

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