CNMC examines LaLiga's tender proposal to sell broadcasting rights for national football competitions

The CNMC welcomes the proposed structure of the tender for selling the rights in different lots and options, as this may encourage more operators to participate and increase competition between them. However, it points out that LaLiga should exclude the possibility for operators to bid for more than three seasons to fully comply with EU and national competition rules.

• Overview of national regulation for the broadcasting of football rights

In 2015, Royal Decree-Law 5/2015 of 30 April on urgent measures regarding the marketing of audio-visual rights for professional football competitions (“RDL 5/2015”) implemented a system of collective selling of the broadcasting rights for professional football competitions in Spain. LaLiga, as organiser of the National Football League’s first and second divisions, is entitled to collectively sell the broadcasting rights of the football clubs participating in such competitions. Previous to the RDL 5/2015, there was no regulation in place, and each football club sold its broadcasting rights individually.

Pursuant to such legislation, prior to approving the conditions to sell the rights, LaLiga is obliged to submit any proposal to the CNMC in order to issue a non-binding opinion on such conditions from a competition law perspective.

Regarding the duration of collective commercialisation contracts for football competitions, it has been limited to three years since the entry into force of the RDL 5/2015. However, this time-limit was removed in April 2020, and currently Article 4.f) subjects the duration of this kind of contracts to EU competition rules.

• LaLiga proposes to extend the duration of the contracts beyond three years

Following the removal of the three-year limit, LaLiga has introduced, in its latest tender proposal for the broadcasting of the National Football League’s competitions from the 2022/2023 season onwards, the possibility of extending the duration of the contracts either for three, four or five seasons.

LaLiga argues that the possibility to extend the duration of the contracts to four and five years allows to provide a greater variety of options for the granting of broadcasting rights, rather than sticking to the maximum duration of three years.

According to LaLiga, there are several reasons that would support the compatibility of this extension of the duration with EU competition rules, including the following:

i. The emergence of new operators;

ii. The ease of amortisation of the costs of alternative operators;

iii. The RDL 5/2015 provides a mechanism to avoid the exclusivity in the broadcasting contracts: Article 4.g) specifies that the same person or entity shall not acquire (directly or indirectly) rights for content corresponding to more than two different packages or lots;

iv. The provision of a stable financing of football clubs over the coming seasons; and

v. A reduction in the price paid by consumers.

• The CNMC rejects LaLiga’s proposal as for the duration

Even considering the above-mentioned positive factors presented by LaLiga as regards the extension of the duration, the CNMC considers that duration of more than three years would not be compatible with EU Competition law and that it would affect the principle of free competition established in RDL 5/2015.

In particular, in the view of the CNMC, a duration of more than three years would go against the conclusions reached in the European Commission’s precedents in which the compatibility of collective selling of broadcasting rights with EU Competition law was analysed (i.e., COMP/C.2-37.398 UEFA, COMP/C.2/37.214 Bundesliga and COMP 38.173 FA Premier League). In these decisions, the Commission accepted the collective selling of broadcasting rights by sports associations under Article 101(3) TFEU provided that strict conditions aimed at mitigating the risk of foreclosure effects on downstream markets were met, including the limitation of the duration of the rights to no longer than three years.

The CNMC’s report also addresses the relevance of a situation raised by LaLiga in which the British Government accepted a three-year renewal, without bidding procedure, of Premier League broadcasting contracts. The CNMC alleges that, while in the British case the duration of the broadcasting contracts is being exceptionally extended for three more years (i.e., to a total of six years) because of the global COVID-19 pandemic, LaLiga is proposing a total duration of four and five years starting from the 2022/2023 season, which would result, in the view of the CNMC, in a period of time clearly disproportionate to an alleged connection with the effects of the economic crisis caused by COVID outbreak.

According to the report, the British case cannot be compared to LaLiga’s proposal, and exceptional times caused by the pandemic would not justify extending here the duration of the broadcasting contracts, even more, taken into account that football competitions are now resumed, and stadiums are at full capacity.
All in all, the CNMC’s report concludes that the duration of three years would be the most suitable way to guarantee free competition for the acquisition of football broadcasting rights.

• LaLiga decides to publish the tender in the original terms

Despite this disparity of criteria, LaLiga published the official tender documents on 3 November 2021, and it will finally allow operators to bid for the acquisition of rights for three, four and five seasons, as in the original proposal submitted to the CNMC. The procedure for receiving the bids will be open until mid-December.

In any case, the CNMC’s report rightly reminds that LaLiga’s tender is subject to Spanish and EU Competition law in all those aspects that exceeds the scope of protection provided by RDL 5/2015. Therefore, it remains to be seen whether the CNMC will take any action if the rights in question are finally acquired for more than three years.

For further information, please refer to the CNMC’s report of 19 October 2021 here (in Spanish).

For more information, please contact Candela Sotés or Miguel Orellana