Important decision!

Karen Murphy, the owner of the Red, White and Blue pub in Portsmouth, has recently been taken to court by Rupert Murdoch owned BSkyB network because she had purchased a Greek decoder to show English Premier League games at her pub. By doing so, she was able to save money, but it soon caused lots of troubles because BSkyB had the exclusive right for broadcasting Premier League matches in England.

Yesterday, however, the final ruling of the Court of Justice of the European Union on the cases Football Association Premier League and Others v QC Leisure and Others as well as Karen Murphy v Media Protection Services Ltd was issued (press note on the ruling to be found here). The crucial point of the ruling is that judges found that "national legislation which prohibits the import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified". The ruling even goes as far as stating that the Football Association Premier League could not claim copyright of Premier League matches as it is not "an author’s own intellectual creation".  It was ruled that "a system of exclusive licences is also contrary to European Union competition law if the licence agreements prohibit the supply of decoder cards to television
viewers who wish to watch the broadcasts outside the Member State for which the licence is granted."

This ruling has two major implications:

1.   Leagues cannot claim copyrights for TV broadcasts of matches
2.   Cross-boarder transfer of broadcasts is allowed, i.e. breaking national monopolies like the one of BSkyB for the English Premier League  

My prediction is that this ruling has to potential to reshape the broadcasting industry of sporting events. While several leagues all over Europe have similar exclusivity deals with TV networks, the most obvious case might be the FIFA and the way it sells the rights for the Football Worldcup. Taking the court ruling serious would question FIFA's claim to have the copyrights for the Worldcup matches. The same is true for UEFA and the Champions League.

In terms of Economics my expectation is that the ruling of the Court of Justice of the European Union will open up the market and generate a Europe-wide market for broadcasting of sports events. From what we know about opening up markets, and consequently increasing competition, we might see a sharp decrease in licence prices for broadcasters and consumers. This might go along with a move from several national monopolists towards a European market with a large number of suppliers. The fan at home, or in the pub of course, will be the winner.