Sports Event: Value of Exclusive Broadcast Rights Essay

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Sports Law

Grayson & Edward 2000 noted that in sporting events, activities are governed by terms and conditions which are usually set with consideration for all parties involved in the sporting events, to give some guidance and direction in handling matters arising in the events. These terms and conditions are usually written down or fixed as guiding principles, rules, strategies and regulations, encompassed in what is referred to as the law of sports. Therefore sports law can be defined as a combination of sub-laws, all which apply to sportsmen and women (athletes) and the sporting events they take part in. all these combined sub-laws have specific principles and guidelines which are legal, adopted and utilized by organizations to administer various specific areas in the broad sporting arena (Gardiner 2006).

However some of these sub-laws differ from a sport to another, countries, regions and their legal system and procedures, but all aim in creating some harmony and fairness in sports events, as well as protecting right reserved to various stakeholders in a specific sporting event. The sports law touches on various sports related matters and issues such as athlete contracts, antitrust, torts, discrimination in terms of sex, race, nationality, criminal issues in sports, among others. The international law states that broadcasting of sport events like any other form of marketing and advertising should adhere to the set guidelines and policies (Gardiner 2006).

Broadcast Rights

A right can be described as an entitlement prescribed to an individual, individuals or organizations to act in a particular manner. Laws regarding sports outline some rights entitled to the parties involved in the broadcasting processes of sports events. The law on sport marketing strives to protect and regulate sports event owner’s and broadcasting corporations’ rights, over sporting events to be broadcasted, and ensures that broadcasting agents and sponsors do not violate the stipulated rights reserved to the owners and vise versa (Grayson & Edward 2000).

Griffith 1997 argued that issues surrounding joint buying and selling of TV rights are among the major concerns for sports event owners and organizers in the broadcasting of sports events. The owners should ensure the value and exclusivity of broadcasting rights, through getting proper knowledge and information about each party’s right, and the legal procedures to undergo whenever a party acts in a way which goes against the stipulated rights. The awareness of legal measures to take when there is violation on broadcasting rights by a party is vital for event owners.

The optimal aim of ensuring value and exclusivity on these broadcasting rights is to reduce conflicts which are likely to arise, as well as making sure that the broadcasted service satisfies the sports consumers, as they are the key movers of the broadcasting industry and sporting events in general.

Broadcasting as a Sports Marketing Tool

Like any other activity, sporting events need to be focused to their customers i.e. fans and any other party interested in utilizing information from a sporting event. Broadcasting of sports events therefore acts as a marketing tool which links the actual activities taking place in sports events with the end-user client, generally the fans of the sport. For instance, sport fans can view and enjoy their favorite sporting events on their televisions, necessitated through broadcasting of the event (Fullerton 2007).

The marketing deal involving broadcasting of sports events encompasses transmission rights through several media such as television, the mobile phone and the internet. Transmissions through the television, accounts for the greatest stake in the sport clientele. The process of marketing sporting events will be highly successful if broadcasting corporations as well as the event owners adhere to the set guidelines regulating broadcasting of sports events, while executing the broadcasting rights entitled to each party involved. An owner of a sports event can therefore ensure that fans of the event receive the utmost satisfaction they deserve from the sport, by guaranteeing that all broadcasting rights are exclusively adhered to and executed (Fullerton 2007).

Broadcast Rights in Sports Events

The media plays a great role in creating awareness to people and specifically sports fans on a specific sporting event. Sports event owners therefore utilize the media in broadcasting their sports events as a form of advertising, so as to keep and maintain their customer as well as attracting more customers to listen or view their broadcasted sporting events(Higton n.d). The media therefore has a great impact on issues surrounding broadcasting practices and rights; hence legal regulation in broadcasting sporting events is necessary to govern these rights, to ensure that the value of broadcasting rights is not interfered with. With proper follow up of broadcasting rights, conflicts arising between the owners of the event, broadcasting agents and the sports viewers or fans will be greatly minimized, hence harmony will be enhanced between all these stakeholders in sports event broadcasting. The broadcasting component in Sports laws should act as a mediator in resolving disputes which are likely to arise between agents involved in broadcasting events and the owners of the sports events (Higton n.d).

Sports Laws and Acts Governing Broadcast Rights

Various laws and enactment have been passed in regard with safeguarding the broadcasting rights, and sports club owners should have a great understanding of these laws and enactments to that they receive a fair treat in the course of broadcasting and marketing of their sporting events in the media.

The anti-trust law and the competition law are among the major laws which govern activities taking place in sporting events, as well as defining the legal procedures to follow, when pursuing a legal matter arising in the sporting events. These laws were designed to promote free and fair competition and with stronger emphasis on illegalizing and outlawing monopolistic characters in the sports market. In the sports perspective these laws helps in abolishing monopolistic activities which can be experienced in various fields such as in broadcasting and transmission of sports events. All the stakeholders involved in sports events ought to acquaint themselves with the basic stipulation of this law, and more so the main players in broadcasting and transmission of the sporting events i.e. the event owners/ organizers and the broadcasting corporations. Both parties should know their rights as well as limits entitled to them, when it comes to execution of transmission and broadcasting powers. With the exact information in regards to the law and sporting activities, event owners will execute their powers and rights to ensure that exclusive broadcast rights are adhered to and strictly followed, hence satisfying their customers needs and wants (Higton n.d).

Sports law Jargon, n.d outlined the sports broadcasting Act of the year 1961, in an act which was passed in regard to a court ruling decision. The court in its decision had ruled out that the American National Football League (NFL) had breached and violated the American antitrust laws regarding sports. In its violation, the NFL had used a negotiating method for soliciting its television broadcast rights, which was a violation to the set antitrust laws. The court’s ruling illegalized all form of teams for soliciting their rights to enter into an exclusive contract with the CBS. However the Act overrules the court decision and allows for sports broadcasting agents to enter into joint agreements in broadcasting professional sporting events. The Act went further to allow sports broadcasting agents to engage in the sale of television broadcasts to other network or networks, a phenomenon which is highly common in today’s broadcasting of sporting events. In many people’s perspective, the law is given the interpretation of erasing the ‘blackout rules’ which aim at protecting home team against competing games which are broadcasted within its home territory on the same day when the home team is playing at home.

An owner of a sports event with the knowledge of this act can successfully fight against any violation which can present themselves as ‘blackout rules’, as well as ensuring that broadcasting rights are exclusively and strictly adhered to. The broadcasting rights will entitle the owners’ home team’s rights when playing foreign teams at their home ground. Sports events owners in ensuring exclusive broadcast Rights, can utilize this ruling and the proceeding elements of the Act, to take legal action against any individual or broadcasting agent who violates the rights entitled to the event owners as stipulated in the act.

Event Owner and Broadcast Rights Awareness

In the event of marketing and advertising sports events, event owners and all the other stakeholders in the sporting events and activities must be aware of some of the broadcasting rights encompassed in the sports law, and the legal procedures to undergo in handling or resolving matters regarding broadcasting issues. An event organizer is entitled to various broadcasting rights which he or she has direct control over. Some of these rights include restriction of broadcasting equipment such as cameras or even controlling access of these equipments in a stadium where the event organized is taking place. The debate on who is responsible or owns which rights in the course of event broadcast and coverage still lingers around, and many of the laws in regard to these right don’t provide an exclusive stand between the owners or organizers of the event and the broadcasting media, such as television channels.

The TV rights to broadcasting corporations include sports coverage on televisions channels which has some particular characteristics on viewers such as the following. First, sports are short-lived product. Sports viewers are mainly interested in live sport broadcasts. The delaying which can be involved in the contract of selling TV rights from one broadcaster to another can make fans loose interest in viewing the game especially when the broadcasting market is characterized by a monopoly. In the long run the event owner is likely to experience the negative effect such as low turnover due to withdrawal of viewers from the sport. Sports viewers can also change to another broadcaster probably with similar event and abandon the previous event organizer. It’s therefore necessary for event owners to know who suits best in broadcasting their event, while maintaining their client base.

Another characteristic about sports coverage primarily on the television is that viewers do not like and are usually not satisfied with viewing another event substituted with the exact sports event there are interested in viewing. This substitution is more likely to occur when a broadcasting corporation buys selling rights from another broadcaster. Whenever this happens the viewers are disappointed, others loose interest with the broadcasting channel as well as the sport, and this phenomenon is highly likely to affect future event organization, by the owners. As the commercialization trend is fully engulfing the sports industry, events owners are also eying gaining some profits from broadcasting a certain event. If the trend of loosing viewer due to poor broadcasting of sporting events persists, the great loss is inclined towards the vent owners and organizers. The organizers or the owners therefore ought to ensure that broadcasters execute their duties effectively. They should ensure that viewers of their sports events get exclusive satisfaction from the broadcasted event and that the broadcasting agents do not substitute the event being viewed with another, as this will violate the viewers’ rights as well as the event owner’s rights to give their viewers a quality value of the sport.

The concentration of broadcasting rights on federations concerned with sporting events, reduces the amount of right-left for other stakeholders in the broadcasting arena such event owners and the broadcasting agents. In addition, these rights have been further reduced by the highly increasing Number of contracts between TV channels. These TV rights which are giving the contracts a longer duration while covering very many sporting events. This phenomenon is giving rise to unhealthy competition in the broadcasting market with big Broadcasting Corporations gaining a huge market share and position. These big broadcasters obtain the top position since they are capable of bidding for TV rights which are sold in huge packages. In this situation, right of entry to TV markets by smaller broadcasting channel as well as developing new media markets will be highly tampered with. The consumer choice will therefore be narrowed down to the big broadcasting agents. Even the event owners will have minimal choices in choosing who to broadcast their events. It is therefore wise for event organizers and owners to petition such phenomenon in the courts concerned with sports law, especially when the event broadcasters act in a way as to violate the rights of all parties concerned in the broadcasting process of a sports event.

Joint selling of broadcasting rights and specifically TV rights still continues to be a major concern for event owners in regard to the quality of service delivered to the third parties i.e. the sports fans and viewers. This act is usually described as a state of affairs characterized by sports clubs and associations delegating their right to other associations to sell the broadcasting rights on their behalf. Usually these associations mint these rights together in large packages and sell them to specific broadcaster in various countries. Critics argue that these associations restrict clubs from fair competition in the sale of their broadcasting rights, consequently limiting competition among broadcasters, which in turn affects the consumer choice (Sportslaw Jargon n.d). Event organizers can therefore ensure that consumer’s choices are not restricted, by making sure that large associations give fair competition to smaller and individual broadcasting agents, even if it means through legal procedures. This is quite important since the owners survival is determined by the satisfaction of their consumers.

Higton n.d maintains that controversy still revolves around the issue of broadcasting rights on the transmission of sporting events, and this has led to the rise in enactment of more anti-trust laws, to govern and control the processes of event broadcasting and transmission between event owners/ organizers and the broadcasting agents. In a symposium held on May 2005, with the topic of discussion being on broadcasting rights in sporting activities and events under the European laws of anti-trust, some issues were evidenced. The symposium realized that the possession of broadcasting rights of sporting events by broadcasting agents or corporations was generating many problems concerning the anti-trust laws. (World sport law 2008). The battlefront was characterized between private and public broadcasting corporations, with the formation of European Broadcasting Union (EBU).

International Olympics Committee (IOC) was concerned with owners of the European Broadcasting Union bid to be the main broadcaster of the 2014 to 2016 Olympic Games, and how probably the broadcasting union would oppress other private TV broadcasting corporations who would seek to buy selling rights from the broadcasting union (World sport law 2008). The IOC concern was whether the body would be fair in the sale of the broadcast right the other channels in these times of heightened global economic crisis. In its force and authority the IOC rejected the bid perhaps due to the imminent risks likely to be suffered by smaller broadcasting agents as a result of oppression by the giant broadcaster to maximize its income in the harsh economic times, at the expense of these smaller broadcasters (Higton n.d).

In addition to this, the Olympic committee argued that European Broadcasting Union was a cartel accused of a collective buying of broadcasting rights, which were anti-competitive in regards to the EU competition rules. The European court dealing with sports issues ruled out that it was illegal for public corporations to combine with the aim of acquiring transmission rights would undermine fair competition with their private counterparts. Therefore owners of this broadcasting union could secure some broadcasting rights from IOC, if they adopted policies which involved fairness in the competitions for broadcasting rights with other private corporations (World sport law 2008).

From the legal perspective, the rights concerning the issue of selling broadcasting rights should never be sold by a sports league or any sporting association. This is because of the likelihood of the leagues or the association violation of the anti-trust laws. Collective sale of broadcasting rights could mean the league or the association will act as a monopoly in the broadcasting market, and a sole seller is highly prone in exercising and demanding monopolistic prices (Higton n.d).

Sports events organizers should therefore consider who they sell their broadcasting rights to, to ensure that their customers (fans) get what they deserve and at the exact price. This will greatly promote the relationship between the all the stakeholders involved in the event. Sport events owners and organizers should therefore have an exemplary knowledge and understanding of various broadcasting rights, especially in these times of commercializing sporting events. This is due to many illegal practices coming along, as a result of high rate of intrusion of many unscrupulous broadcasting agents to benefit in the ever increasing multibillion dollar industry (Slack 2003).

Conclusion

Increasing trends in the sports world, especially the trend of commercialization of sporting events is raising various issues, majority being unethical in the development of sports events. Sports law should therefore provide a legal framework and procedures necessary to follow when addressing these issues. Issues regarding broadcasting rights between the owners/ the organizers of sports events, broadcasting corporations and the third parties i.e. the sports consumers, have been evidenced in the broadcasting industry. Event owners are on the move to ensure that the broadcasting rights entitled to every stakeholder in the broadcasting arena are exclusively safeguarded, regulated and are exercised in accordance to sports law, with no party violating another party’s rights. The major concern is focused on the joint selling as well as buying of broadcasting rights and exclusivity granted in regard with these broadcasting rights. Unfair competition among broadcasting agents and restriction of event owners in exercising their rights, is consequentially leading to restriction on customers choice on a sports event. The detrimental effect of this can be loss of consumers in the market, hence a great concern and interests for sports event owners in ensuring value and exclusivity in the execution of broadcasting rights.

References

Fullerton, S 2007, Sports Marketing, McGraw-Hill, New York.

Higton, J. n.d, Broadcasting: rights and issues, Web.

Gardiner, S 2006, Sports Law, Cavendish, Oxford.

Grayson, D & Edward, A 2000, Sport and the law (3rd ed.), Butterworths, London.

Griffith, D 1997, Law and the Business of Sport, Butterworths, London.

Slack, T 2003, The Commercialization of Sport, Routledge, London.

Sportslaw Jargon, n.d, The Sports Broadcasting Act of 1961, Web.

World sport law, 2008, IOC Rejects EBU Bid for 2014-16 Olympic Broadcast Rights, World Sport law report, Web.

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