Norwegian football and media rights
Preamble
The value of football media rights in Norway has seen a formidable growth in recent years. In December 2020, Norwegian TV channel TV2 purchased the TV rights to Norwegian football for the years 2023-2028, with a bid of NOK 4,5 billion (about EUR 450 million), NOK 750 million a year. Four years earlier, In 2016, Discovery Networks acquired TV rights to matches in the two top divisions for men for the years 2017 to 2022, for NOK 2.4 billion, i.e. NOK 400 million per year. The equivalent amount in 2011 was NOK 1.6 billion[2], corresponding to NOK 320 million per year. In 1997, the fee for media rights to national football matches amounted to just under NOK 15 million[3].
The growth in the value of media rights has actualized the question of who owns the media rights to football matches.
Property law and sports regulations
There are two possible positions that can form a claim for media rights to football matches. Firstly, the rights may result from being the owner of the stadium in which the matches in question are played. Anyone who owns the stadium, basically has the right to exploit the right of ownership, including entering into agreements on the economic exploitation of the rights.
Secondly, the rights may result from being the organizer of the relevant matches. The vast majority of football matches played in Norway, including matches in the series systems and the cup, are arranged by the Norwegian Football Association (NFF). Both the Norwegian Sports Federation (NIF) and the Norwegian Football Association NFF have provisions in their statutes on media rights for sports events. The provisions of NFF’s and NIF's statutes are binding for its member clubs.
According to the NFF and NIF statutes, it is the organiser of a sports competition that has the media rights for the sports competition. This is stated in the NIF's statutes Act § 14-3 cf. § 14-2, which also states that the participating member clubs are entitled to a reasonable remuneration for their participation. As an organizer, NFF will have the media rights to all competitions organized by NFF, while the clubs will be entitled to a reasonable remuneration. According to UEFA's Articles of Association Art. 48, the national affiliate has exclusive media rights to battles that are under the national association’s jurisdiction.
There is limited jurisprudence dealing with media rights to football matches. In the so-called Nordlys-case, an unpublished court decision handed down by Tromsø City Council on May 21, 1986, the court concluded that Radio Nordlys was liable for damages to NFF as a result of Radio Nordlys having, without permission, radio transmitted a league match, arranged by NFF, between two of NFF's membership clubs, Harstad IL and Tromsø IL. In the decision, the court finds that NFF was a formal and real organizer of the match, and that the radio transmission violated NFF's ownership of the product.
In 1982, the Danish Supreme Court concluded that the Danish Football Association, as organizer of football matches, could refuse Danish Radio's to cover its matches on radio and TV. However, the questions about who was to be regarded as the organizer, and who had the media rights to the football matches, were not issues.
In addition to the outlined rights positions, it can be claimed that the media rights must be regarded as a joint ownership between the clubs and NFF, since the clubs have the main responsibility for the matches, while NFF is responsible for the competitions. In a statement in 2004, the Norwegian Competition Authority expressed such a view, that the media rights must be regarded as a joint ownership between the clubs and NFF.
The media rights of the international teams will belong to the NFF, according to the NIF's statutes chapter 14. The clubs have no ownership interests in the national team, and are obliged to release players to international matches in international windows, see FIFA’s Regulations on the status and transfer of players (RSTP) annexe 1.
Media rights and competition law
Competition law can have an impact on how media rights can be exploited. It is first and foremost the Competition Act §§ 10 and 11 that may have an impact on the exploitation of media rights.
The Competition Act § 10
Section 10 of the Competition Act prohibits, inter alia, decisions taken by associations of undertakings whose object or effect is to prevent, restrict or distort competition. The provision has its counterpart in the EEA Agreement Art. 53, which again corresponds to the provision of EC Treaty Art. 81. The only difference between the text in the EEA Agreement art. 53 and section 10 of the Competition Act, is that the provisions of the Competition Act are not limited to conditions that may affect trade between member states in the EEA. The jurisprudence and practice in the EU and the EEA will be relevant when understanding The Competition Act[4]. In national legislation, efforts will be made to follow international developments so that in practice there will be little difference between the importance of international guidelines and decisions for the interpretation of competition rules. In the assessment of whether NFF's sale of media rights to football is prohibited by the Competition Act, several factors will have to be considered.
Firstly, it must be decided whether the individual clubs and / or NFF are to be considered "undertakings" or "associations of undertakings" and thus are subject to the provisions of the Competition Act. The prohibition of restrictive agreements in section 10 applies to "undertakings» and is defined as "any entity that carries out private or public business". The European Commission has stated the following about the relationship between sports associations and the concept of association in EU competition law[5]:
"Sports associations are associations of undertakings under Article 81 EC to the extent they constitute groupings of sport clubs/teams or athletes for which the practice of sport constitutes an economic activity."
In White Paper on Sport[6] published by the European Commission in 2007, it is stated that “[s]port activity is subject to the application of EU Law” og at “[c]ompetition law and Internal Market provisions apply to sport in so far as it constitutes an economic activity”.
On this basis it must be assumed that NFF must be regarded as an undertaking as defined in the Competition Act § 10.
Second, it must be considered who owns the media rights to the football matches. If NFF is to be regarded as the sole owner of the media rights, a sale of the media rights from NFF will not be regarded as a collective sale of the club's rights, and the sale will not be covered by the prohibition in § 10. As shown above, NFF, according to NIF's and NFF's statutes, owns the media rights. The view that NFF is the sole owner of the media rights is supported by the fact that the clubs seem to have accepted that it is NFF that is the sole owner. The clubs can claim that they are co-owners of the media rights, as a result of club ownership or dispensation rights over stadiums where matches are played. One side of the property right is that the right of exploitation of the property may also include the right to prevent others from exploiting the property without the owner's consent, as well as the right to enter into economic exploitation of the property / stadium, and the right to prevent others from enter into similar agreements. The clubs will have ownership rights to the events, but do not own the media rights, although they will be entitled to a reasonable remuneration for their participation. As a result, NFF's sale of media rights will not be prohibited under section 10 of the Competition Act.
The Competition Act § 11
Article 54 of the EEA Agreement and § 11 of the Competition Act prohibits an undertaking from abusing a dominant position. An undertaking will normally be considered as dominant if it can to a significant extent behave independently of its competitors and customers. Central to the assessment is the company's share of turnover in the relevant market. Jurisprudence from the EU Commission indicate that an undertaking will normally be considered to have a dominant position if it has a market share of more than 50 per cent for a longer period.
Section 11 of the Competition Act states four non-exhaustive examples of abuse. These refer to unfair purchase or selling prices, limiting production prejudice of consumers, discriminatory trading conditions, and the imposition of non-relevant additional conditions. It is not necessary to prove that the undertaking intends to abuse its dominant position as the assessment is objective. Inappropriate utilization of a dominant position can affect different groups. In the case Tokai Carbon Co. Ltd v. Commission[7] it was emphasised that the exploitation had affected consumers (premise 159). Also competitors are often hit by exploitation, see for example British Airways v. Commission[8] where a bonus system for travel operators established by a dominant player, British Airways, affected Virgin Atlantic Airways. Whether a dominant position has been abused or not, must be assessed on a case-by-case basis after the market has been defined and analysed.
The Competition Authority defines the relevant product market as "all goods and / or services that, in the opinion of the consumer, are mutually interchangeable or substitutable based on properties, price and area of use". Furthermore, the Competition Authority defines the relevant geographic market as "the area where the companies concerned offer goods or services where the conditions of competition are sufficiently homogeneous, and which can be kept separate from neighbouring areas especially because the competition conditions are noticeably different.”
About the sports associations' dominant position the European Commission has expressed[9]:
"Article 82 EC prohibits any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it in so far as it may affect trade between Member States. For the purposes of applying this provision, the relevant market must be determined. As mentioned earlier, sports associations usually have practical monopolies in a given sport and may thus normally be considered dominant in the market of the organisation of sport events under Article 82 EC. Even where a sporting association is not active on a given market, it may be considered to hold a dominant position if it operates on that market through its members (e.g., sport clubs/teams)."
The fact that a sports association has a dominant position within the sports area on a national level, does not automatically mean that it has a dominant position in other markets in which it operates. The definition of the relevant market for media rights that NFF owns must be decided on a discretionary basis, but it may be natural to limit the market to media rights to sports events as the product market, and Norway as the geographic market. The competition in this market must then be assessed. A market that includes media rights to sports events that can be shown in Norway includes a wide range of sports events. In addition to media rights to NFF's competitions, both foreign and international football competitions and other sports competitions are included, including the Champions League, Premier League, national and international competitions in other sports and the Olympics. Although the sale of media rights to NFF's competitions has a value of as much as NOK 400 million per year, it must be assumed that this represents a relatively small share of the total turnover related to the sale of media rights to sports events distributed through Norwegian media. On this basis, it must be assumed that NFF cannot be considered to have a dominant position in the relevant market.
Final notes
According to the sports regulations, it seems relatively clear that NFF alone owns the media rights to football matches organized by NFF, including matches in the top divisions. The clubs, in turn, are entitled to a reasonable remuneration for their participation. Neither the competition act or EEA legislation support a view that the clubs have ownership in media rights to football matches organised by NFF.
A more thoroughly article about Norwegian media rights in Norwegian, is available here.
[1] http://www.dn.no/etterBors/2015/12/10/1156/Tippeligaen/discovery-kjper-tippeligaen-for-24-milliarder
[2] http://www.fotball.no/nff/NFF-nyheter/2011/TV-2-kjoper-fotballrettigheter/
[3] David Pounce, Fotball, penger og TV – Norsk toppfotballs utvikling sammen med TV
[4] Ot.prp. nr. 6 (2003-04) s. 225-226.
[5] Annex L "Commission Staff Working Document - The EU and Sport: Background and Context - Accompanying document to the White Paper on Sport" (COM(2007) 391), section 2.1.4
[6] European Commission, White Paper on Sport
[7] Tokai Carbon Co. Ltd and Others v Commission (T-236/01, 2004).
[8] British Airways v Commission (T-219/99, 2003).
[9] Commission Staff Working Document - The EU and Sport: Background and Context - Accompanying document to the White Paper on Sport
