Foul play suspected: investigation into Serie A TV rights kicks off
The Italian Competition Authority, Autorità Garante della Concorrenza e del Mercato (AGCM), has commenced ex officio proceedings into alleged anticompetitive practices in connection with the tendering process for and allocation of football broadcasting rights in Italy.
The Authority suspects that the country’s two largest pay television companies, Sky Italia and RTI-Mediaset (Mediaset), conspired with the Italian Football League and Infront, the Swiss company that managed the tender process, to allocate the football broadcasting rights for matches between 2015 and 2018. The Authority is investigating the behaviour of each of the four entities
Sky Italia is a wholly owned subsidiary of Sky, Europe’s largest pay-TV broadcaster, the largest shareholder in which is Rupert Murdoch’s 21st Century Fox. Mediaset, an Italian media conglomerate, is owned by Silvio Berlusconi, the former Italian prime minister. Infront is run by Philippe Blatter (the nephew of Sepp Blatter,the head of Fifa, football’s world governing body).
The tender process was for the broadcasting rights that related to Serie A’s next three seasons. The rights had been divided into five categories. These were:
- The exclusive right to broadcast the matches of the eight leading teams on satellite television;
- The exclusive right to broadcast the matches of the eight leading teams on digital terrestrial television;
- The exclusive right to broadcast the before and after-match interviews, as well as locker room footage;
- The exclusive right to broadcast live all matches not included in the first two categories; and
- The exclusive right to broadcast a limited number of matches on the internet.
Sky submitted the highest bids for Categories 1 and 2, while Mediaset offered the highest bid for Category 4. Had the bids concluded the process, therefore, Sky would have obtained the rights to broadcast matches of the eight leading teams on satellite and digital terrestrial television, while Mediaset would have been entitled to broadcast all remaining matches live on all platforms. It was, however, a condition of Mediaset’s offer that it would only honour its bid if it won either Category 1 or Category 2 rights. As it won neither, the Football League found that their bid was invalid. This would have resulted in a further round of tenders.
Following three weeks of discussions, however, the Category 1 rights were assigned to Sky, while the Category 2 rights were assigned to Mediaset (despite it’s bid for the Category 2 rights was almost 150 million euros less than that of Sky). Mediaset’s RTI did obtain the Category 4 rights, but it then assigned them to Sky. In essence, Sky traded its digital rights to Mediaset in exchange for the rights to broadcast the remaining games. The outcome of the process effectively preserved the status quo with regard to the division of digital and satellite broadcasting rights between the two broadcasters.
On 19 May the Authority, in conjunction with the Guardia di Finanza, raided six offices in Milan and Rome belonging to Sky Italia, Mediaset, Infront Italy and Serie A League, looking for evidence that the allocation of rights discussed above was the result of a collusive allocation agreement. The Authority has suggested that the alleged arrangement would violate Article 101 of the Treaty on the Functioning of the European Union, in that it conditioned or altered the outcome of a competitive bid and foreclosed the relevant market.
The catalyst for the investigation was reportedly media reports in February 2015 of Murdoch and Berlusconi having done a deal with Serie A and Infront. The Authority alleges that the companies agreed that Sky would obtain the rights to broadcast most matches, but would not compete in the digital television market. In exchange, Mediaset would retain its control of the digital sector and gain rights to broadcast UEFA Champions League matches.
Both companies have released statements in relation to the investigation. Mediaset maintains that the agreements in question had already been approved by Italy’s Telecoms regulator, AgCom, and that it was “absolutely convinced that the allocation of TV rights was done correctly.” One newspaper, Milano Finanza, reported that the regulator acknowledged considering the transfer of the Category 4 rights, but denied that there had been a ruling on the deal as a whole. Sky Italia observed that, “The final agreement regarding the rights to Serie A for 2015-2018 differed to the initial result when the bids were opened. It is entirely understandable therefore that the ACGM should wish to satisfy itself as to the behaviour of all parties involved.”
The Authority has signalled that it will conclude its investigation in April 2016.
Our EU colleagues are monitoring the progress of this investigation, please see their Insight here.
The allocation of broadcasting rights in relation to sports has, of course, come under much scrutiny in Australia in the last fifteen years, most notably in the litigation commenced by Channel 7 against New Ltd, the AFL and others. You can find that decision here.
 By number of customers.
 The auction was initially delayed due to complaints from the rival bidders concerning the transparency of the process.
 The matches of the leading eight teams account for almost 90% of viewer share.