Sports and television: How to reconcile profit with the right to information | In Principle

This year’s huge sporting events—the recently concluded European football championship and the Summer Olympic Games in Paris—are a good opportunity to look at regulations for broadcasting major events. In this article, we write about the events covered by the regulations, the obligations imposed on broadcasters, and the sanctions for non-compliance.

Sports are attractive content for viewers. It is no longer only traditional TV stations competing for sports, but also pure streaming services. The sale of television rights to events such as the Olympics, the World Cup and the European football championship is one of the most important sources of revenue for the organisers. In turn, broadcasters of such events can earn above-average revenues from the sale of advertising or viewer access (to a paid sports channel or via pay-per-view).

Major events—the heart of the regulation

Sporting events of the greatest interest to the public play an important role in building social and cultural cohesion. Meeting this social need depends on ensuring that as many people as possible have access to sports broadcasts.

By definition, the broadest access is free access. Meanwhile, popular sporting events are an opportunity for broadcasters to generate increased revenues, e.g. from the sale of paid access to premium channels. And maximising the value of sports broadcasting rights also lies in the interest of the organisers of these events. Broadcasters and VOD providers compete for these rights, and the more attractive to the media an event is, the higher the rates they are willing to offer in return. Hence the great temptation for broadcasters and organisers alike to assign broadcast rights on an exclusive basis and subsequently distribute them only through paid access.

The regulations pertaining to “major events” are designed to prevent this from happening. For this purpose, they introduce the duty of broadcasting on free television.

Important developments in EU law

The European Parliament has long recognised the tension between the social need for access to sports broadcasting and the interests of broadcasters and organisers of sports events.

Therefore, it authorised member states to create lists of major events (Art. 3a(1) of Council Directive 89/552/EEC). Inclusion of an event on this list means that it must be broadcast on free television. Free television means broadcast on a television channel (public or commercial) accessible without payment, apart from modes of funding widely prevailing in each member state (such as a radio and television licence fee or a basic tier fee for subscription to a cable network) (recital 22 of Directive 97/36/EC).

Although the consequences for broadcasters and organisers inevitably lead to restrictions on their freedoms (freedom of establishment, freedom to provide services, property rights, and competition), these restrictions are considered acceptable because they are justified by another fundamental right, namely the public’s right to information.

Lists of major events require prior approval by the European Commission. Nonetheless, EU member states have a great deal of leeway when creating them. EU law provides only general guidelines in this regard (see recitals 18 and 21 of Directive 97/36/EC). Namely, the event in question should be:

• Extraordinary and of interest to at least a significant part of the member state, and
• Organised in advance by an entity authorised to sell transmission rights to the event.

Additionally, the Commission considers the following criteria to be reliable indicators of the significance of an event (at least two of them must be met, see Commission Decision 2007/479/EC of 25 June 2007):

• Particular widespread resonance in the member state, and not just relevance to those who typically follow a given sport or activity
• Generally recognised special cultural importance for the society of the member state, especially as a factor in strengthening cultural identity
• Participation of the national team in a competition or tournament of international importance
• The fact that the event has traditionally been broadcast on free-access television and gained a large television audience.

Therefore, the Commission exercises only limited oversight of these lists. In principle, it is sufficient for a state to provide a general justification for inclusion of an event on the list, for example by citing the success of domestic athletes in a particular field. There is no need to provide detailed information such as specific viewing figures. (If the Commission has doubts whether an event should be considered “major,” it may seek clarification from the member state which has made such a qualification, see C-505/09 P, Commission v Estonia). Only clear wrongdoing by the member state, whether due to a violation of national procedure in creation of the list or in the determination of whether the event actually enjoys significant public interest, can be grounds for the Commission to refuse to approve the list.

Poland’s list of major events—Olympics, football, volleyball, handball, skiing—and proposed changes

The Polish list of major events stems from two pieces of legislation:

• Art. 20b(2) of the Broadcasting Act
• The National Broadcasting Council regulation of 14 November 2014 issued on the basis of the Broadcasting Act.

The list was approved by the European Commission in November 2014 (Commission Decision (EU) 2015/163).

The Polish list of major events currently in force includes:

• Summer and Winter Olympic Games
• Semifinals and finals of the World Cup and the European football championship, as well as all other matches in these events with participation of the Polish national team, including qualifying matches
• Other matches involving the Polish national football team in official competitions and matches with the participation of Polish clubs in the Champions League or UEFA Cup
• Matches with the participation of the Polish national volleyball team, in the world and European volleyball championships for women and men, including elimination matches
• The Men’s Volleyball World League competition played in Poland
• Semifinals and finals of the men’s world and European handball championships and all other matches at these events with the participation of the Polish national team, including qualifying matches
• World Nordic Ski Championships
• Ski Jumping World Cup competitions
• Women’ Cross-Country World Cup (skiing) competitions
• World Athletics Championships.

As far as football is concerned, the list mentions only the semifinals and finals of FIFA/UEFA championships (regardless of which teams are playing, i.e. even when the Polish national team is not participating), as well as matches involving the Polish national team or Polish clubs. However, the Court of Justice has held that listing of all matches played in the final phase of the World Cup and European Football Championship—as done by Belgium and the UK (when it was in the EU)—can be justified by public interest and therefore compatible with EU law (Cases C‑201/11 P, C‑204/11 P and C‑205/11 P, UEFA and FIFA v Commission).

All of the Polish major events are sports, although the directive does not impose such a restriction. For example, in addition to sports, Belgium counts the final of the Queen Elisabeth Music Competition as a major event (see Commission Decision of 25 June 2007), and Austria counts the Vienna Philharmonic’s New Year’s Concert and the Vienna Opera Ball (see publication 2002/C 16/06).

Major events established in other EU states are relevant to Polish broadcasters. Pursuant to the National Broadcasting Council regulation of 21 April 2004, a broadcaster under Polish jurisdiction that has acquired exclusive rights to broadcast an event included in a foreign list of major events cannot exercise those rights in such a way as to deprive a substantial part of the audience of the given member state of the opportunity to watch the event. In such a situation, the Polish broadcaster must exercise these rights in accordance with the rules set by the competent EU member state.

In the fall of 2023, the National Broadcasting Council conducted a public consultation toward expanding Poland’s list of major events, as it had been some time since the original list was introduced in 2014. Among other things, the proposed update would cover grand slam tennis tournaments (Australian Open, French Open, Wimbledon, US Open), as well as the men’s basketball world championship and European championship. But so far no changes have been formally implemented.

Major events—the broadcasters’ obligations

Inclusion of an event in the list of major events means that direct broadcast of the event cannot take place exclusively through limited access (pay-per-view or premium channels). (As a rule, “direct transmission” means “live” transmission, but in some cases it may also be a delayed broadcast, as long as the delay does not exceed 24 hours and the broadcast is delayed because the live event would take place between midnight and 6 am Polish time or coincide with another major event.) The event must be broadcast on a nationwide channel, available in its entirety without fees (excluding subscription fees within the meaning of the Act on Subscription Fees and Basic Fees Charged by Cable Operators of 21 April 2005). Under Polish conditions, this means a free-to-air (FTA) programme, distributed by digital terrestrial broadcasting via terrestrial transmitters (multiplexes) whose coverage extends throughout the country.

Therefore, a major event must be broadcast in the manner prescribed by law, or it cannot be broadcast at all. Consequently, a major event may be:

• Broadcast on a free television channel, and only there, or
• Broadcast by other means (in particular in a paid programme) and concurrently on a free TV channel.

Rights to broadcast an event in Poland can be acquired from the organiser by a public broadcaster or a private broadcaster disseminating program via terrestrial television, or by a coded premium sports channel, or pay-per-view, or both.

(Pursuant to statement issued on 26 February 2013 by the National Broadcasting Council on classification of pay-per-view services in light of the Audiovisual Media Services Directive, programmes referred to in Art. 20b of the Broadcasting Act also include pay-per-view services. Consequently, a pay-per-view service provider is considered a television broadcaster. It is impermissible to use a pay-per-view service to circumvent the ban in Art. 20b. To make a broadcast of a major event available on a pay-per-view service, the provider must enter into a licence agreement with the broadcaster of a national programme or simultaneously broadcast it on its own national channel.)

The essence of the regulation on major events is to ensure that the event is broadcast on free television. Broadcasters are left with the choice of whether transmission will occur only on a (qualified) national channel, or simultaneously on a national channel and elsewhere, or not at all.

In practice, this means that a broadcaster who bought the broadcast rights from the organiser:

• May broadcast the event on its qualified channel (on which it does not profit from paid access, although it can still generate ad revenue), even if it simultaneously broadcasts it on another (non-qualified) channel; or
• May broadcast the event on a non-qualified channel, but license to another broadcaster, on reasonable (financial) terms, the right to simultaneously broadcast the event on the other broadcaster’s qualified channel.

The terms of the licence with another broadcaster should be reasonable in light of market conditions. However, if no nationwide broadcaster wishes to enter into such an agreement, the broadcaster who has purchased the broadcasting rights may broadcast the event in the manner it chooses.

Sanctions

For a broadcaster’s violation of Art. 20b of the Broadcasting Act, and transmitting a major event exclusively via pay-per-view access, the National Broadcasting Council will impose a fine of up to 50% of the annual fee for the right to use the frequency for broadcasting on terrestrial TV, or if the broadcaster does not pay the fee for the right to use such a frequency, a fine of up to 10% of the broadcaster’s revenue in the previous fiscal year, also taking into account the scope and harmfulness of the violation, the broadcaster’s previous actions, and its financial capabilities.

To date, the chair of the National Broadcasting Council has issued three such decisions, all involving two of Poland’s largest broadcasters. The fines imposed were PLN 10,000 and PLN 30,000. As a benchmark, the regulator relied on the fees for the right to use frequencies held by broadcasters of national channels. The violations consisted in the failure to broadcast on a free channel volleyball matches involving the Polish national team (including qualifying matches), as well as the semifinal and final matches of the men’s handball world championship, although they were broadcast in coded channels or VOD services. Specifically, the regulator found that free broadcasting on the internet, as well as broadcasting via a coded channel offered exclusively via satellite through digital platforms or cable operators, does not count as broadcasting on a national channel.

The relatively low number of decisions issued by the National Broadcasting Council imposing fines on broadcasters in this regard suggests that Polish broadcasters are generally complying with the regulations on major events.

Conclusion

Recent media reports clearly show how sports broadcasting is evolving (e.g. “Game changer: How streaming will transform sports” and “The state of play,” The Economist, 27 July – 9 August 2024, pp. 9, 14–16). Audiences are eager to learn about new sports, and leagues are interested in conquering new markets. This can be seen in the boom in global streaming services, which have audiences in many countries and are capable of delivering new content to viewers. This will certainly have an impact on the audiovisual market. New audience needs will arise, which in time will require legislative intervention, and that also applies to major sporting events.

Barbara Załęcka-Wysocka, attorney-at-law, patent attorney, Wardyński & Partners