Eleanor Whitcombe
The value and tension of collective media rights
Media rights are the financial engine of modern sport. For leagues, selling broadcast rights collectively – as a single package – often secures higher fees than if each club negotiated alone. The rationale is straightforward: a league-wide product is more attractive to broadcasters than a patchwork of individual deals. Yet this very practice raises competition law questions. When clubs agree to sell together, they are agreeing not to compete on the sale of their own rights. That is an agreement between undertakings that may restrict competition. The challenge for regulators is to distinguish between arrangements that benefit fans and those that simply line pockets.
Why collective selling attracts scrutiny
Collective selling can be pro-competitive. It can create a balanced league, prevent a few wealthy clubs from dominating broadcast revenue, and ensure that smaller clubs survive. It can also deliver a single, easy-to-access product for fans. But it can also harm competition. It may foreclose rival broadcasters, reduce output, and lead to higher prices for consumers. The key concern is that clubs, which would otherwise compete on media rights, are instead coordinating their behaviour. This is a classic horizontal agreement. Under UK competition law, such agreements are prohibited unless they can be justified.
The legal tests under UK competition law
The starting point is the Chapter I prohibition in the Competition Act 1998. It bans agreements between undertakings that prevent, restrict or distort competition within the UK. Collective selling clearly falls within that description. The question then becomes whether the agreement can be exempted. The exemption test – often called the four cumulative conditions – is set out in section 9 of the Act. To be exempt, the agreement must:
- Deliver efficiency gains – for example, better quality coverage, wider distribution, or cost savings.
- Allow consumers a fair share of the benefits – fans must see some of the gains, whether through lower prices, more choice, or improved service.
- Be indispensable – the restrictions must go no further than necessary to achieve those gains.
- Not eliminate competition – a substantial part of the market must remain competitive.
In practice, the competition authority will also consider whether the agreement has the object of restricting competition. If it does, it is almost certainly illegal. Collective selling is usually assessed by effect, meaning a detailed economic analysis is needed. The specific nature of sport – the need for competitive balance – is relevant but not a trump card. It cannot justify blanket restrictions.
Recent regulatory attention
The competition authority has kept a close eye on sports media rights. In the early 2000s, it examined collective selling of top-flight football rights and accepted that the practice could be exempted, but only with conditions. Those conditions included selling rights in separate packages and ensuring that no single broadcaster could acquire all live rights. This opened the door to more than one pay-TV provider. More recently, attention has shifted to streaming. The rise of digital platforms has changed how rights are packaged and sold. Regulators are now asking whether long-term exclusive deals, bundling of rights, and joint selling between leagues might foreclose new entrants. There is also growing interest in how rights are sold in other sports, such as rugby and cricket, where collective selling is less common but increasing.
Resolving disputes: the role of tribunals and arbitration
Disputes over media rights can arise in several ways. A broadcaster may complain to the competition authority that a league's selling model is anti-competitive. A club may challenge the league's distribution of revenue. Or a regulator may open an investigation. In the UK, the Competition and Markets Authority (CMA) is the primary enforcer. It can issue infringement decisions and impose fines. Appeals go to the Competition Appeal Tribunal (CAT), which can review the CMA's findings on law and fact. Separately, many sports bodies have arbitration clauses in their rules. The Court of Arbitration for Sport (CAS) is often used for international disputes, but domestic arbitration is also common. For rights holders, the practical lesson is to build compliance into the deal from the start. Early engagement with the CMA – through informal guidance or a formal exemption application – can save years of litigation.
Practical steps for clubs, leagues and rights holders
If you are involved in negotiating a collective media rights deal, here are some practical steps to reduce risk:
- Document the justifications. Explain clearly how the collective arrangement delivers efficiencies, such as wider coverage or investment in grassroots sport.
- Keep packages separate. Avoid selling all rights as one indivisible bundle if that would foreclose rivals.
- Limit exclusivity. Short exclusivity periods and carve-outs for free-to-air or digital highlights can help.
- Monitor market share. If the league or its broadcast partners have high shares, the deal is more likely to be scrutinised.
- Seek legal advice early. Competition law is fact-specific. What works for one league may not work for another.
Collective selling is not inherently unlawful. But it sits on a spectrum. The more restrictive the arrangement, the stronger the justification must be. By understanding the legal tests and keeping the consumer benefit front and centre, leagues can continue to reap the rewards of collective selling whilst staying on the right side of the competition rules.
