This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
The Court of Appeal has ruled on the appeals by the bookmaker body BAGS, Ladbrokes and William Hill against the 2008 judgment in relation to media rights agreements entered into by AMRAC, the racecourse-owned body that operates the betting shop audiovisual service, Turf TV.
The original litigation was a complex mixture of allegation and counter-allegation arising from AMRAC's establishment in late 2006 and its acquisition of exclusive media rights for horseracing to be shown at licensed betting offices (LBOs) in the Turf TV service. Horseracing rights had previously been held by BAGS, which sub-licensed the rights to Satellite Information Services (SIS), which has been broadcasting to LBOs since this was first permitted in the late 1980s. SIS also holds certain LBO rights directly from racecourses.
BAGS challenged as anti-competitive the arrangements by which AMRAC and its racecourse members acquired exclusive rights with the aim of increasing revenues from LBOs. AMRAC counter-claimed by first attacking the exclusive media rights agreements held by BAGS and SIS and then by alleging anti-competitive collusion amongst bookmakers aimed at preventing AMRAC entering the market.
Following a lengthy trial and two judgments all of the claims and counter-claims were dismissed, leaving all of the media rights agreements intact and no outstanding allegations of collusion against the bookmakers. However, BAGS and two of the bookmakers, Ladbrokes and William Hill, were not willing to leave it at that and appealed against the first judgment, which had dismissed their challenge to the Turf TV rights agreements. AMRAC neither revived its counter-claim against BAGS and SIS nor sought to defend its earlier collusion allegations.
In their appeal, the bookmakers refined their arguments from the lower court to make clear that they were not challenging the principle of exclusive agreements for LBO rights (always awkward given BAGS' own exclusive agreements), but were concerned by the unique circumstances under which over half of British racecourses had both agreed amongst themselves to sell their rights on a common basis to a company they themselves controlled (AMRAC) and had refused to countenance potential offers from other buyers who would have been interested, notably BAGS and SIS. The bookmakers contested that this amounted to one or more anti-competitive agreements prohibited by EU/UK competition law, because it involved collective negotiation and closed dealing by rival racecourses. A further objection to the exclusivity of AMRAC's agreements was not pursued, so the Court of Appeal judgment leaves untouched the lower court's generally relaxed attitude to exclusive LBO rights agreements.
The Court of Appeal acknowledged the "ingenuity" of the bookmakers' case, but rejected it in fairly strong terms, stating that the bookmakers' objections to AMRAC's arrangements did not reflect "in any realistic way either the economic context in which the arrangements were made, or the object of the arrangements". The bookmakers had sought to argue that the AMRAC parties had an anti-competitive object (the racecourses fixing prices and agreeing on closed dealing), and an anti-competitive effect (same points as for object plus collective negotiation). Both arguments were briskly rejected by the court.
One particular finding of the Court of Appeal was that "the racecourses do not compete with each other as regards the sale of LBO media rights". This was on a somewhat technical basis - AMRAC's economic evidence to this effect had not been rebutted at trial - but does seem to indicate a potentially fairly broad principle. The argument was that races do not generally coincide with each other due to the regulations for race fixtures and races are not events that are sold in competition with other in the way that, for example, broadcasters might bid for Chelsea or Arsenal matches being played at the same time if the clubs were permitted by the Premier League to sell rights to their own home games.
As a result of the Court of Appeal's judgment, it has been ruled for a second time that there will no interference with AMRAC's LBO rights agreements. However, press reports suggest that the bookmakers are unwilling to leave the case as it is and are actively considering a further appeal to the Supreme Court (formerly the House of Lords).