Wednesday, December 17, 2008

IOC Rejects EBU Bid for 2014-16 Olympic Broadcast Rights

Sports broadcasting rights are significant money spinners for sports bodies and sports event organisers. The current three-season deal ending in 2010 for the TV rights to the English Premier League, one of the richest Football Leagues in the world, is worth a staggering £1.7 billion. But is the so-called ‘credit crunch’ and global economic downturn beginning to bite as far as the economic value of sports rights generally - and sports broadcasting rights in particular - is concerned and what sports bodies can get for them?

Perhaps the recent bid of the European Broadcasting Union (EBU) for the European broadcast rights to the Olympic Games, including the Paralympics, for the period 2014-2016, which the International Olympic Committee (IOC) recently rejected, is a portend of things to come and may suggest a slow down in the upward spiral trend of Sports TV rights in recent years. The 2014 Winter Olympics will be held in Sochi, Russia, whilst the host city for the 2016 Summer Games is yet to be decided and will be selected by the IOC in 2009.

The EBU is the largest association of national broadcasters (so-called ‘free to air’ broadcasters) in the world with 75 active members – in effect, it is a cartel, which, as such, has had its brushes with the Competition Directorate of the European Commission in the past on the grounds that the collective buying of sports broadcast rights may be anti-competitive under the European Union Competition Rules – but that is another story for another occasion.

The EBU has already bought the rights for the 2010 Vancouver Winter Games and the 2012 London Olympics and paid the IOC more than $700 million for them.

In a recent Press Release, the current EBU President, Fritz Pleitgen, stated:
“We very much regret the decision of the IOC. We have worked with the IOC since 1956 to deliver the Olympic Games to the broadest possible audience, and ensured maximum exposure of the Olympic Games, and also Olympic Sports between the Games. We note that there are different views about the future monetary broadcast value of the Games. EBU Members were surprised by the high financial expectations of the IOC. We regret that, it seems, little account is taken of the additional high level of investment by the EBU in rights for, and the production and quality editorial coverage of, World-, European- and National Championships, across many Olympic Sports.”

A fair point and argument, which did not cut much - if any - ice with the IOC, who - of course - are out to get as much money as they possibly can for their valuable broadcast rights for what is undoubtedly, despite the claims of FIFA in relation to their World Cup, the greatest sporting show on earth! In fact, the biggest source of the IOC revenue comes from broadcasting rights deals, which are expected to bring in close to $4 billion for the next two Games periods of 2010 and 2012.

But despite all this, the IOC needs to be realistic and take account of present market forces and the current economic climate and, in particular, the fact that Europe - which is a vast market for sport and sports rights - is now officially in recession!

The EBU President-elect, Jean-Paul Philippot, also had this to say about the IOC’s rejection of the EBU bid:
“The worldwide financial crisis will not stop at the doorstep of free-to air television; it will also have an impact on the value of broadcast rights for sports events. The EBU’s offer reflected the maximum price public service broadcasters could pay for the rights, our philosophy of investing in Olympic sports throughout the Olympiad (the four years between the summer Games), and the value of offering Olympic sports free of charge to all citizens.”

Again, a fair point, which reflects the present economic situation. Philippot further remarked:
“We are sorry that we did not manage to convince the IOC of the importance of our global support of Olympic sport. We will now carefully analyse the consequences of the IOC decision on our sports-rights acquisition policy”.
So, does this mean that the EBU may have a change of mind, despite their robust defence of their offer - the amount of which has not been disclosed - and come in with a higher offer?

It will be interesting to see what happens next.

 Ian Blackshaw, International Sports Lawyer


Comments

Stoyan Radoslavov said...

What I find really interesting is the eventual application of the AVMS 2007 rule that allows all member states to define some events of national importance that should be freely accessible to the general public and thus moved to free-to-air broadcasting. The Olympic Games could easily be regarded as such and thus kept away from PAY TV providers. This could be a serious blow to IOC aspirations because till now only Pay TV channels are really willing to pay big amounts of money for the broadcasting rights.

30/07/2009

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