A pub landlady's legal victory over the Premier League could be good news for all concerned, but we shouldn't worry too much about negative consequences for Sky, claims David Harrison
Once the knee-jerk media response to the recent ruling on EU televised football rights died down, we were left with a commodity notably lacking during the broadcasts in question – silence. Predictably lazy images – grinning pub landlady pulls celebratory pints in Southsea boozer – were duly filed below celebratory headlines proclaiming Karen Murphy's "victory" in the European Court of Justice. Well, possibly.
To recap, in 2005, Murphy was taken to court for screening live Premier League games in her pub. To do so she used a Greek decoder card to access live matches transmitted by the Hellenic company Nova. This cost her a fraction of the sum demanded by the Sky commercial tariff. She took her case to the European Court of Justice, despite racking up what must have been hefty costs, claiming she was within her rights to show coverage from inside the EU. And eventually, some five years later, they agreed.
Her case remains subject to final High Court settlement, but the European court's verdict – that any legislation preventing the import, sale or use of these cards cannot be justified within EU free trade law – does not carry right of appeal. Leaving aside the intriguing issue of who has been picking up Murphy's legal costs, the outcome is difficult to interpret. Hence the deafening silence.
Despite their current contractual stance of territorial exclusivity no longer passing legal scrutiny, the Premier League were still able to express "quiet satisfaction" over a verdict which, at first glance, looked guaranteed to provoke precisely the opposite response. But they still seem to possess the wherewithal to bar foreign broadcasts on the basis that, although the action itself cannot be subject to copyright, all those annoying broadcast bits and pieces surrounding the game – the music, graphics and logo – remain within copyright legislation. So as long as they deliver a feed that incorporates distinct Premier League branding (and I've a funny feeling they will) this all sounds less like a victory for Murphy and more like a thumping home defeat.
However, these restrictions only cover public screenings, meaning that whatever broadcast atrocities you choose to commit within the privacy of your own home remain your affair. So what happens now? At least until the end of next season, when broadcast rights are likely to have been renegotiated, you can do as you please. You are at liberty to snap up a decoder and viewing card from any EU source. The downside would involve foreign language commentary and presentation with no post-match analysis or interviews, while a positive take would see significantly lower fees, 3pm Saturday match coverage and more games – possibly many more. But don't think you can just mute the sound and listen to Alan Green – the time delay as the pictures soar from Wigan to a space station, then back down to Mount Olympus and, sometime later, into your living room would drive you mad.
Sky are yet to respond, but the facts are that broadcast rights from continental Europe, relatively speaking, do not represent a major contribution to Premier League funds. Only around a quarter of the £1.4 billion generated from overseas sales comes from Europe, far less than the key Asian growth market. There must be a possibility that all European rights will now be bundled into one single package. And guess who would be in pole position to hoover that up? Somewhere around £120 million per season for rights to cover the whole of non-UK Europe would only equate to one of the six current 23-game domestic packages shared between Sky and ESPN.
City reaction perfectly reflected this lack of clarity. Sky shares immediately fell around three per cent when the news of the ruling was released. Yet within a couple of weeks they had not only recovered the lost ground, but also added another three per cent in response to a typically impressive 32 per cent year-on-year rise in operating profits, all underpinned by average annual revenue per user growth, from £510 to £535.
So, on the face of it, everyone's a winner. Landlady Murphy is happy because she "won" her case. The punters are happy because they can access even more live football. And the Premier League are happy as they are now free to impose intellectual property rights over live broadcasts. One slightly puzzling aspect is that Sky's legendary legal team will have known of this potential outcome for some months, yet haven't come up with any public response. As ever, when considering matters related to Sky, there remains an underlying suspicion that the eventual result will not prove detrimental to that particular organisation.
From WSC 298 December 2011