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Italian Football Pay-TV Contracts To Be Renegotiated

By | January 31, 2001

      Rome’s appeals court has suspended the pre-emption clause written into contracts between Tele+ and the major clubs in Italy’s Serie A, thus ruling partly in favour of rival Stream, on the issue of pay-TV football rights.

      The court’s decision means that only those contracts “binding the clubs and the TV channel for any period in excess of three years” will have to be renegotiated at the end of the current championship. Unless the ruling is challenged, the battle for the TV rights will resume this summer, but Tele+ will not have automatic rights to renewal of the contracts if no better offers are made when the contracts expire.

      The court also dismissed claims by Tele+ and certain football clubs that a ruling be put off until the final report of the Antitrust Authority which last June ruled that Tele+ was unfairly using its dominant position in the acquisition of TV rights for football. Tele+ has since submitted a plan to remove all obstacles, but has yet to receive a response from the authority.

      According to Stream, Tele+ has abused its position with regard to the pay per view (PPV) rights for the Serie A and B matches, having signed contracts with the top clubs that contain clauses making it prohibitive for any potential rival operator to make counter offers. Back in 1998, Tele+ acquired the exclusive rights to the majority of Serie A and B teams, in particular for the most popular teams – Juventus, Inter, Milan and Napoli – which accounted for 47.9 per cent of pay-TV subscribers during the 1998-1999 season.

      According to the court, not only did Tele+ carve out a dominant position in the past but continued to abuse this after Stream entered the market in 1998. Tele+ doubled its number of subscribers between 1996 and 1999, from 770,000 to 1.4 million, while in 1998 Stream had less than 90,000 subscribers. The court expressed the opinion that a market share of viewing rights that exceeds 60 per cent is not the only proof of a monopoly position; in certain cases even a lower percentage share can have the same effect.

      The difference between the two pay-TV operators is still significant – Tele+ currently holds a 72 per cent share of the pay-TV market compared to Stream’s 28 per cent. Finally, the court considered that Tele+ has been making Stream’s position untenable, “threatening its very survival”, thus fully justifying the court’s emergency ruling.

      The court ruling may, paradoxically, turn into a boomerang for the football world, which could find itself renegotiating contracts but at prices lower than previously asked. Both Stream and pubcaster RAI have made it clear that football does not render what it costs, both in terms of subscribers and audience.

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