GSLTR December 2013
Once again, it is our great pleasure to welcome readers to the December 2013 edition (citation: GSLTR 2013/4) of our ground-breaking journal and on-line database (www.gsltr.com): Global Sports Law and Taxation Reports (GSLTR).
Another year has passed and brought with it its own veritable crop of interesting and important developments and issues in sports and sports-related taxation law and, no doubt, the new year will do the same. This all goes to show the need for a journal such as GSLTR and we hope that existing subscribers will spread the word about GSLTR, amongst their colleagues and contacts, to encourage new subscribers and help us to increase our global footprint and continue to provide a must-have resource.
Sports TV rights are once again in the news. Indeed, of the sports marketing mix, which includes sports sponsorship, merchandising, endorsement of products and services, and corporate hospitality, perhaps the most important and lucrative one is the sale of sports broadcasting rights, especially sports TV rights, around the world. The commercial exploitation of these rights contributes mega sums to many sports and sporting events, including the Summer and Winter Olympic Games and the FIFA World Cup. For a comprehensive view of the importance and the scope of sports TV rights in several major sporting countries around the world, see the book TV Rights and Sport Legal Aspects, edited and contributed to by Professors Ian Blackshaw, Steve Cornelius and Robert Siekmann (The TMC Asser Press, The Hague 2009).
Indeed, it is fair to say that, without the mega sums generated by sports broadcasting, such major events – and, in fact, many others – could not take place and consequently sport – and sports’ fans – would be the losers. See chapters 13 and 14 on sports TV rights agreements and sports new media rights agreements in the Book Sports Marketing Agreements: Legal, Fiscal and Practical Aspects, by Prof. Ian S. Blackshaw (The TMC Asser Press, The Hague 2012). In this respect, the commercialisation of sports broadcasting rights may be considered as the “oxygen of sport”. There is a symbiotic relationship between sport and TV broadcasting. Indeed, according to David Griffith-Jones, QC: “This marriage between sport and television is one made in heaven.” See p. 289 in his book Law and the Business of Sport (Butterworth and Co., London 1997). And according to Richard Parrish: “The broadcasting sector and sport have [...] revolutionised each other.” See Sports law and policy in the European Union (Manchester University Press, Manchester and New York 2003).
Furthermore, the significance of new technology – especially broadband and quicker access to the internet and web-streaming of sports events – in the development and financial importance and value of sports broadcasting rights cannot be over emphasised as Richard Verow, Clive Lawrence and Peter McCormick rightly point out at p. 321 in their book Sports Business, second edition (Jordan Publishing Limited, Bristol, United Kingdom 2005), as follows:
“In many ways, the rise of new platforms for the dissemination of media products and the inevitable rise of sport as the global media property it now is have been intertwined. Just as the formation of the FA Premier League and the rise of satellite pay television through BSkyB seemed inextricably linked, so when new platforms, such as the proliferation of digital television channels or the exploitation for broadcast or quasi broadcast purposes of internet and mobile telephony platforms, come to the fore, their usual test bed in terms of content is in sport. It seems that only sport has the pulling power nationally and internationally to justify the sort of investments needed to bring new media platforms to market, and maybe sport is alone considered sufficiently popular for the uptake by new customers properly to reflect the potential of the medium rather count simply as a commentary on the first content offered through it.”
For example, the English FA Premier League – the world’s most popular and most financially successful football league – have recently sold their live rights to their matches for the seasons 2013-2016 for a record sum of £ 3.018 billion. The sale of additional rights packages, comprising overseas rights, highlights and mobile phone and internet rights, is expected to increase this amount to a staggering sum of £ 5 billion! Again, the lion’s share of these rights has been sold to the satellite broadcaster, BSkyB, which will show these matches as part of its Sky Sports package on a subscription basis. BSkyB is owned by the Australian media magnate Rupert Murdoch, through his group News International, who, incidentally, considers “sports as a battering ram and a lead offering” in all his pay television operations around the world (address given by him at the AGM of News Corporation on 15 October 1996 in Adelaide, Australia).
In fact, hardly a day passes without an announcement of some major sports broadcasting deal having been concluded. And now a new player, challenging Sky’s dominant position, has come onto the swinging sports TV rights’ scene: BT Sports – a division of British Telecom – which only entered this lucrative market with its BT Sports Channels on 1 August 2013. They have announced on 9 November 2013 an exclusive three-year deal from 2015 to broadcast live in the UK all the 350 matches in the European Champions League and the Europa League for a record sum of £ 897 million! As a result of this deal, the value of these rights has doubled! Of course, this will mean more money to the football clubs participating in these leagues, and fans have called for a share of this windfall, in the form, for example, of lower ticket prices for matches. Although UEFA and the participating clubs will welcome this increase in TV revenue, viewers and sponsors will be concerned that, for the first time in 2015 and onwards, live Champions League matches will no longer be shown on terrestrial TV! However, BT Sports have said that from 2015 some games, including the finals of the Champions and Europa Leagues, will be shown on “free to air” television.
This is bad news for ITV, who have already lost the FA Cup TV rights and will hope to retain their highlights rights to the Champions and Europa Leagues! Once again, the landscape for sports TV rights is changing dramatically and who knows what other developments in sports broadcasting the future will bring!
One other sports TV rights’ development should be mentioned: as not unexpected, FIFA and UEFA finally lost their appeals in the Third Chamber of the European Court of Justice on 18 July 2013 against the UK and Belgian Governments’ listings of the whole of the FIFA World Cup and the UEFA Euro Championships as “free to air” events pursuant to the EU “Television Without Frontiers” directive.
In this issue, on the sports legal side we feature, amongst others, articles on the Rihanna sports image rights case in the United Kingdom; sports justice in the United Arab Emirates; the fallout from the Lance Armstrong doping affair; and the activities of the International Centre for Sport Security, which is based in Qatar but operates worldwide.
On the sports tax side, we include contributions on the taxation of foreign professional team sports persons in Mexico, South Africa and Hungary; and an interesting Belgian case note on the taxation of a professional cyclist who emigrated from The Netherlands to Belgium.
Finally, as always, we would welcome and value your contributions in the form of articles and topical case notes and commentaries for our journal and also for posting on the GSLTR dedicated website at www.gsltr.com.
So, now read on and enjoy the December 2013 edition of GSLTR wishing all our readers the compliments of the season and all the best in 2014!
Dr. Rijkele Betten (Managing Editor)
Prof. Dr. Ian S. Blackshaw (Consulting Editor)