Professional soccer in Germany is financed largely by the licensing of broadcasting rights to soccer games. Profits from soccer are derived principally through the exploitation of media and marketing rights.
The exploitation of these rights raises a potential conflict; the owner of the rights is concerned with securing the most profitable terms whereas public interest is concerned with ensuring that the soccer games should be as widely seen as possible. This conflict has come to a head in recent discussions regarding the proposed so-called “public-screening” of the world-championship 2006 on big screens in German cities.
The German Federal Court of Justice has considered whether the organiser of a sports event has the right to grant a radio broadcaster access to, and radio coverage outside of, a sports stadium for monetary consideration. Judgment was given on 8 November 2005.
Opponents of such “radio-broadcasting” rights argue that in radio coverage, the performance of the reporter is the most important factor whereas in television broadcasting, the viewer regards the picture as the most important part of the coverage. The two methods of broadcasting cannot therefore be compared. It has also been argued that radio coverage relies on the tension of the direct coverage and on the live atmosphere, with the reporter’s manner of speaking and articulation being affected by the mood of the stadium. Television and radio broadcasting are, however, similar in that in both cases there is a close temporal and textual connection with the game. Press coverage does not have the same connection.
Central marketing of media rights
The majority of media-rights for the society and joint stock companies of the first and second German soccer leagues are centrally marketed. The Ligaverband e.V. and its 100% owned subsidiary the Deutsche Fußball-Liga GmbH (DFL) (which conducts the operative business), were founded especially for this purpose. Recently, almost exclusive rights were awarded to Arena, a subsidiary of the Cable-TV company Unity Media. Media rights are marketed after a predetermined procedure dictated by the European Cartel Authority. This follows a commitment to collective marketing of media rights for the German soccer league made by the Ligaverband.
Judgment of the Federal Court of Justice of 11/08/2005 – Circumstance and Conclusion
The facts of the case are as follows: The Claimant was a private radio station in Hamburg. The Defendants were two well-known Hamburg soccer clubs HSV and FC St. Pauli (Defendants no. 2 and 4), and DFL (Defendant no. 3), to which Ligaverband had assigned the “media marketing rights” for soccer league games. In the past, the Claimant reported regularly on the home matches of HSV and FC St. Pauli in the football leagues, either with short live-reports or with updated summaries of the game, broadcasted from the stadium. After the first dispute regarding the existence and the possibility of licensing “radio broadcasting rights” during the football season 2000/01, the DFL requested compensation for the right to broadcast during that season
The Claimant sought a declaration that the Defendants had no rights to live or other radio coverage for the home matches of the Defendants no. 2 and 4, in the first or second soccer league. In the first subsidiary motion, the Claimant requested a declaration that Defendants no. 2 and 4 were obliged to grant the Claimant compensation for costs, access to games (press seats), participation in press conferences and access to mixed-areas.
In an additional subsidiary motion, the Claimant sought a declaration that it had a claim against the Defendants to free live or other coverage outside of the stadium for the German Soccer League home matches of Defendants no. 2 and 4. The Claimant argued that the broadcasting coverage of these events should be cost-free, except for appropriate compensation for costs, and should last up to five minutes per game.
The Federal Court of Justice dismissed the claim, finding that the Claimant had no right to free access to the stadium for the purpose of radio broadcasting. The Federal Court of Justice held that the Defendants should pay compensation for radio broadcasting rights, a condition to the access to the German Soccer League home matches.
Legal issues arising from the decision of the Federal Court of Justice
The decision of the Federal Court of Justice regarding the “radio broadcasting rights” is noteworthy in relation to the following legal issues:
Domestic authority of the organiser
The BGH makes clear that the domestic authority that derives from §§858 ff., 1004 BGB supports the Defendants no. 2 and 4, as they are (co-)organisers of the home matches. This right establishes a sufficient basis to grant radio broadcasters access to the stadium, but only on payment of a fee.
The Federal Court of Justice held that at present there is no “radio broadcasting right”, in terms of an exclusive authority to report by radio outside of the locality, which is connected with the domestic authority, and is based on title to land.
Market dominating companies - §§19, 20 GWB
A market-dominating company can only require payment of a fee in return for the right to radio broadcasting, if it does not adversely obstruct other companies. It may not treat one company differently to another, without having an objective reason for doing so (§20 I GWB). The conditions for access must not differ from those that, in all likelihood, would have resulted from effective competition (§ 19 I and IV Nr. 2 GWB).
As a result, the Federal Court of Justice in this case found that there had not been an infringement of relevant antitrust law. In its view, the demand for a fee to access the stadium for the purpose of radio broadcasting, does not give rise to a ground for action.
Art. 5 I 2 GG as civil rights/ basic constitutional rights barrier
The Federal Court of Justice also had regard to the constitutional protection given to the Claimant, as a radio broadcaster, under the freedom of TV and radio broadcasting pursuant to Art. 5 I 2 GG.
In the Court’s view, the role of the broadcaster to inform the public, can extend beyond political reporting to include outstanding sports events, on the basis that such events fulfils an important social role.
The protection of Art. 12 I GG extends to the economic exploitation of ‘occupational (made) performance’. The economic value of a sports event lies in exploiting the interest of the audience (whether it is done visually or aurally).
The Federal Court of Justice also drew a parallel with TV broadcasting, where payment of fees has been long accepted. This argument seems fair taking into account the organisational effort and operating expenses, and the risk and costs that arise for the organiser of German Soccer League matches. The organiser should have the certainty of knowing that he does not give permission to broadcast outside of the stadium when he sells a ticket to the sporting event.
Parallel to TV Broadcasting - §5 Rundfunkstaatsvertrag
The second subsidiary motion that applied to short coverage (up to 5 minutes) was dismissed by the Federal Court of Justice.
In the first instance decision of LG Hamburg of 04/26/2002, the Court held that short radio broadcasts cannot be compared to short reports on television, on the basis that the Claimant is not interested primarily in the spread of information, but in coverage beyond this.
Ban on restraint by “program-concerning/related conditions”
The Federal Court of Justice made clear that the marketing of “radio broadcasting rights” should not result in restrictions being placed upon the broadcaster, such as an obligation to broadcast certain editorial contributions, which would limit its ability to present its programme freely.
The Federal Court of Justice has affirmed the existence and the applicability of “radio broadcasting rights” and brought the legal uncertainty surrounding this issue to an end, for the time being at least.