Fair Competition in Football – Both on the Pitch and in Broadcasting

The new season for the first division of the Bundesliga kicks off this week. Second division matches have already started, with the two teams relegated in the previous season, 1. FC Cologne and Hamburg SV, hoping to make it back into the first division. Meanwhile, all the teams in the top league will be trying to stop Bayern Munich from winning the German championship for the seventh year in a row. The fans are all hoping for a gripping season of competition. When it comes to marketing the games, however, competition is nowhere to be seen. The German Football League (DFL) has the exclusive rights to market the games. This is a billion-euro enterprise, with the DFL expected to net 4.64 billion euros over the next four seasons from 2017/18 to 2020/21.

However, this isn’t a foregone conclusion, at least from the perspective of competition. All clubs in the Bundesliga have agreed that the DFL has exclusive rights to the games. Isn’t this essentially a cartel?

But it doesn’t have to be this way, as shown by what recently happened in Spain. Up until two years ago, Spanish teams were responsible for selling the broadcasting rights to their own matches until the government passed a law requiring the league to sell these rights collectively in order to increase revenue.

In Germany, it is currently not clearly defined by law who has the right to broadcast matches. It is therefore difficult to say whether the football clubs are working together, that is, they have made some kind of arrangement, or whether these rights belong to the DFL anyway. Most likely the answer is a bit of both. Both scenarios, however, may not be in accordance with the principles of fair competition. On the one hand, the clubs themselves are operating as a cartel while, on the other, the DFL occupies a dominant position on the market that has the potential to be abused.

The German Federal Cartel Office therefore seeks to ensure that the current collective marketing of football broadcasting rights is not overly harmful to providers and consumers. When the TV broadcasting rights for Bundesliga games were being granted back in 2008, the Cartel Office ensured that rights were given to near-real-time free TV highlights coverage before 8 p.m., thus saving the popular sports magazine “Sportschau”. In 2012, the DFL was required to provide offers with attractive content for smaller providers as well. Finally, in 2016 the Cartel Office imposed a “no single buyer” rule for all live broadcasts of matches – as a result, Sky is no longer the only provider, with viewers now also able to watch live Friday matches on its competitor, Eurosport.

When it comes to the marketing of Bundesliga games, the argument is often made that the league has to aim for the highest profits possible in order to compete with other European leagues. That may be the case. It would therefore, however, be all the more important if the arm of the European Commission responsible for regulating competition were to introduce some universal rules across the EU.

The argument for high profits in the context of European competition, however, doesn’t work if we look at the Champions League. These games are marketed centrally by UEFA. Since the European Commission checked over this arrangement back in 2003, no other competition authority has tried to investigate the allocation of the television rights for this championship. As a result, from the next season until at least the 2020/21 season, viewers in Germany will for the first time no longer be able to watch the matches on free TV, since they will only be available on fee-paying channels. The only exception to this will be if a German team reaches the final. So, fingers crossed!

Also in the case of the Champions League, it is the responsibility of the Federal Cartel Office to look into the allocation of broadcasting rights – at least, as long as the European Commission continues to do nothing in this respect. This is exactly what the German Monopolies Commission has called for in its latest report.

And while we’re on the subject, the recent World Cup, in which Germany was eliminated disappointingly early, was also marketed in a centralised manner, with FIFA earning billions for selling the broadcasting rights. Doesn’t this also count as abuse of market power? At least if FIFA decide to increase profits further by only selling TV rights to fee-paying channels, this would be the time for competition authorities to step in.

This piece initially appeared on 16 August 2018 in the “Süddeutsche Zeitung”.