UK Government looking to exempt Premier League broadcasting deal from competition law

Europe

Introduction

On 12 May 2021, the UK Department for Digital, Culture, Media and Sport (“DCMS”) wrote to the Premier League, Sky, BT, Amazon, and the BBC – the current holders of broadcasting rights to the Premier League in the UK – informing them that the UK Secretary of State for Business, Energy and Industrial Strategy (“BEIS”) was looking to exempt the Premier League from competition law to renew its current broadcasting rights agreements for an additional three-year period.

Football Broadcasting Rights

Competition authorities, including the European Commission, have consistently required that national football leagues[1] – such as the Premier League[2] – have to tender their domestic broadcasting rights on a three-year cycle basis and with no single buyer having the option to purchase the entirety of the rights. Similar requirements have been asked of European club competitions, notably the UEFA Champions League.[3]

The rationale for shorter rights cycles through a tendering procedure is to provide a transparent and non-discriminatory procedure, ensuring that all rights are being made available to the market, contributing to innovation and dampening the concentration tendencies in the media markets.

Possible Covid-19 Exclusion Order

Covid-19 has had a significant impact on the value of broadcast rights for football across Europe. Under an auction, it is likely that the value of the Premier League’s domestic rights would drop.

Under paragraph 7 of Schedule 3 to the Competition Act 1998, BEIS has the power to exclude, via a so-called “Exclusion Order”, certain agreements from the application of UK competition law where there are ‘exceptional and compelling reasons of public policy’ to do so.

According to BEIS and DCMS, if such an Exclusion Order is made, the Premier League has committed to:

  • guaranteeing existing levels of financial support for the “football pyramid” for four years from 2021/22 to the end of the 2024/25 season. This includes solidarity payments, parachute payments, youth development funding and funding for grassroots football at existing levels, worth over £1.5 billion over the three-year rights cycle.

  • maintaining at least this level of funding even if its international broadcast rights decrease in value when they are re-tendered over the next year into 2022, and to increase the level of funding if its international broadcast rights exceed their current value; and,

  • providing a further minimum £100 million in solidarity and good causes funding to the end of the 2024/25 season, in roughly equal shares, to the National League, women’s football, League One and Two clubs, grassroots football and cross-game initiatives. This would make a significant financial contribution, including doubling the support for the non-league system, and providing crucial financial support for the women’s game.

Comment

It It is very rare for a government to grant any form of exemption to the application of competition law to private businesses.  The UK government has previously (in 2020) granted limited Exclusion Orders to assist the healthcare sector throughout the Covid-19 pandemic.  However, granting an Exclusion Order to the Premier League’s football rights due to the possible economic impact of the pandemic is a big step away from the essential nature of earlier exclusion orders.

The UK government’s willingness to grant an exclusion order, possibly also influenced by the previously proposed European Super League, demonstrates that it is prepared to intervene in the regulation of football. The protection of English football, both financially and culturally, has become an important political issue in recent months.



[1] Case COMP/47.214 German Bundesliga, 19 January 2005.

[2]Case COMP/38.173 The Football Association Premier League Limited, 28 March 2006.

[3]Case COMP/37.398 UEFA Champions League, 23 July 2003.