ANTI-TRUST LAW IMPLICATIONS IN SPORTS BROADCASTING MONOPOLIES

This article is written by Satirtha Basak of Faculty of Law, Delhi University, an intern under Legal Vidhiya

Introduction

An overview of Antitrust Law: Antitrust laws, also called competition laws, are rules set by governments to ensure fair competition. They prevent monopolies that can hurt consumers and block new ideas. In the United States, important laws include the Sherman Act of 1890, the Federal Trade Commission Act of 1914, and the Clayton Act of 1914. The Sherman Act bans agreements that restrict trade and prohibits monopolies or attempts to create them. The Federal Trade Commission Act created the Federal Trade Commission (FTC), which enforces antitrust laws and fights unfair competition and deceptive actions. The Clayton Act targets specific behaviours not clearly forbidden by the Sherman Act, such as mergers and shared board members, aiming to stop anti-competitive actions early.[1]

The key aims of antitrust laws are to

Encourage Competition: These laws stop anti-competitive deals and actions, keeping markets active and fair.

Prevent Monopolies: Antitrust rules work to avoid too much power being held by a few big companies. They ban actions that could create or misuse monopoly power.

Protect Consumers: By supporting competition, antitrust laws help ensure reasonable prices, enhance product quality, and promote innovation, benefiting consumers.

Significance in Sports Broadcasting

Applying antitrust laws to sports broadcasting is especially important because professional sports leagues have a unique structure and significant economic influence. These leagues often act as natural monopolies by managing team organization and game schedules. This control can lead to anti-competitive behaviour. For example, when leagues negotiate broadcasting rights together, they may create exclusive deals. These agreements can block other broadcasters from entering the market. As a result, consumers might face higher prices and have fewer choices.[2] A key case involves the National Football League (NFL) and its TV broadcasting methods. In 2024, a California jury decided the NFL broke antitrust laws by making its “Sunday Ticket” exclusive to DirecTV. This led to monopolized pricing. As a result, the NFL was required to pay around $4.7 billion in damages.[3] Such cases highlight the essential role of antitrust laws in overseeing sports broadcasting to prevent monopolies. These laws ensure that broadcasting rights are allocated competitively, keeping the market balanced. This approach encourages innovation and offers consumers a variety of viewing choices. Additionally, antitrust regulations stop sports leagues from misusing their dominant positions. This promotes fairness and integrity within the industry.[4]

Development of Sports Broadcasting Rights

The development of sports broadcasting rights has greatly changed how fans access sports content. In the early 1900s, people mainly watched games by going to them or listening on the radio. The first major sports broadcast took place in 1921. KDKA, a Pittsburgh radio station, aired a live baseball game, starting the history of sports broadcasting.[5] In the mid-1900s, television became the main way people watched sports, changing how fans experienced events. Large TV networks started obtaining exclusive rights to broadcast games. This created a mutually beneficial relationship between sports leagues and broadcasters. The partnership not only increased the popularity of sports but also generated significant income from advertising and sponsorships.[6] In the late 1900s and early 2000s, digital technology and the internet introduced new ways to broadcast sports. Streaming services became more common, allowing fans to watch live games on various devices. This change led sports organizations to update their broadcasting methods. They now negotiate rights for both traditional TV and digital platforms to reach a wider audience and boost revenue.[7]

Antitrust laws have been essential in shaping sports broadcasting. A key case is Federal Baseball Club v. National League in 1922. The Federal Baseball Club of Baltimore accused the National League of being an illegal monopoly, violating the Sherman Antitrust Act. However, the U.S. Supreme Court ruled that professional baseball was a state matter and not interstate commerce. This decision exempted Major League Baseball from federal antitrust laws. This exemption has had lasting effects, especially on broadcasting rights. While other professional sports leagues must follow antitrust regulations, Major League Baseball has a unique status. This allows MLB to negotiate broadcasting deals with less legal oversight. As a result, MLB maintains strong control over its broadcasting rights. This control influences market dynamics and competition in the sports broadcasting industry.[8]

Antitrust Regulations Applicable to Sports Broadcasting

In the United States, antitrust laws are mainly based on the Sherman Antitrust Act of 1890. This act bans monopolistic actions and supports fair competition. Section 1 of the Sherman Act prohibits any agreements or conspiracies that restrict trade between states. However, professional sports have unique characteristics that required specific laws for broadcasting rights. This need led to the creation of the Sports Broadcasting Act of 1961 (SBA). The SBA allows sports leagues like the National Football League (NFL) to combine their broadcasting rights and sell them together to TV networks without breaking antitrust laws. This special permission was made to help leagues negotiate better deals with broadcasters. It also ensures that television revenue is fairly distributed among the teams. The SBA was designed to make broadcasting negotiations more effective and to maintain fairness in how TV money is shared.[9]

In the European Union, competition rules are defined in Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Article 101 bans agreements between businesses that can affect trade between member countries. It targets actions that prevent, restrict, or distort competition in the internal market. Examples include price-fixing and dividing markets. Article 102 focuses on the misuse of a dominant market position. This can involve unfair pricing or reducing production, which harms consumers. These laws also apply to sports broadcasting deals. They ensure that when sports organizations sell broadcasting rights together, they do not limit competition or harm consumer interests.[10]

Exemptions and Protections

The Sports Broadcasting Act (SBA) gives certain protections to professional sports leagues in the U.S. However, these protections only apply to the collective sale of broadcasting rights to free over-the-air channels. Deals with cable networks or streaming platforms do not receive the same antitrust exemptions and can be legally challenged. In the European Union, Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) are applied to sports. The Court of Justice of the European Union (CJEU) confirmed this in the Meca-Medina case. This ruling established that sports organizations must comply with EU competition laws when their actions have economic effects.[11]

In India, sports broadcasting is regulated by the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act of 2007. This law requires rights holders to share the broadcast signals of important national sports events with Prasar Bharati, the public broadcaster. This ensures that more people can access these events. Additionally, the Competition Act of 2002 works to stop practices that harm competition, including in sports broadcasting. The Competition Commission of India (CCI) can investigate and decide on cases where anti-competitive behavior is suspected. This helps prevent monopolies in sports broadcasting and keeps the market fair.[12][13]

Case Studies

Star Sports India Private Limited v. Prasar Bharati and Others (2016): In this instance, Star Sports disputed the requirement to share live broadcast signals of nationally important sports events with Prasar Bharati, as mandated by the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act of 2007. Star Sports argued that providing the feed without advertisements violated its intellectual property rights and reduced its earnings. The Supreme Court of India confirmed the Delhi High Court’s ruling. It decided that broadcasters must share live, ad-free signals with Prasar Bharati. This ensures that the public has broader access to key sports events.[14]

Competition Commission of India (CCI) Order against Sports Broadcasters (2018): In 2018, the Competition Commission of India (CCI) fined multiple broadcasting companies for manipulating bids in sports broadcasting tenders. The probe showed that these companies had formed a cartel to control the bidding process. This action broke Section 3 of the Competition Act, 2002, which forbids anti-competitive agreements. The CCI’s decision emphasized the necessity of fair competition in the sports broadcasting field.[15]

Disney-Reliance Merger (2024): In 2024, Disney proposed an $8.5 billion merger with Reliance Industries’ media divisions. This plan triggered major antitrust concerns in India. The Competition Commission of India (CCI) closely examined the merger, especially the risk of dominating cricket broadcasting rights. Such dominance could reduce competition and drive up advertising costs. To address these issues, Disney and Reliance agreed to sell certain regional TV channels and made commitments about their advertising practices. Eventually, the CCI approved the merger, provided these conditions were met.[16]

Prasar Bharati v. Board of Control for Cricket in India (BCCI) (2017): In 2017, Prasar Bharati, India’s national broadcaster, lodged a complaint against the Board of Control for Cricket in India (BCCI). They accused BCCI of unfair practices in how broadcasting rights were distributed. The Competition Commission of India (CCI) investigated whether BCCI awarded exclusive broadcasting deals without a clear bidding process. The CCI’s findings emphasized the importance of having honest and open methods for assigning sports broadcasting rights to avoid disrupting the market.[17]

NFL ‘Sunday Ticket’ Antitrust Litigation (2024): In 2024, a jury decided that the National Football League (NFL) violated antitrust laws. The NFL had exclusively sold its “Sunday Ticket” package to DirecTV. This limited competition and caused prices to rise for consumers. The court ordered the NFL to pay about $4.7 billion in damages. The NFL announced it would appeal the decision. They argued that their media distribution strategy was legal and benefited fans.[18]

Liberty Media’s Proposed Acquisition of MotoGP (2024): Liberty Media, the company behind Formula One, proposed buying the MotoGP World Championship for $3.67 billion. The European Union began an antitrust investigation to examine possible anti-competitive impacts. They focused on the merger of broadcasting rights for two major motorsports under one company. The investigation aimed to determine if this deal would decrease competition in the broadcasting and streaming of motorsport events.[19]

Impact of Digital Platforms

Entry of Streaming Services: Recently, platforms like Amazon, YouTube, and Netflix have been buying more sports broadcasting rights. This trend is changing the sports media landscape. For example, Amazon has focused on live sports to boost its profits. They invest around $3 billion each year in rights for major leagues such as the NBA and NFL. Notably, Amazon secured a $77 billion deal to broadcast NBA games alongside ESPN and NBC Universal.[20] Similarly, DAZN, supported by investor Sir Leonard Blavatnik, has invested more than $6.7 billion since 2016 to build a global sports streaming platform. Their ambition is to become the “Spotify of sport.” Even with strong revenue growth, DAZN is still seeking additional funds to achieve profitability and expand its services.[21] Netflix has ventured into live sports by hosting major events like the Mike Tyson-Jake Paul boxing match and NFL Christmas Day games. These events have greatly increased viewership and boosted subscriber numbers. However, Netflix has stated that it won’t aggressively pursue full-season sports broadcasting rights. Instead, the company prefers to offer occasional live programming to keep costs down and maintain a diverse range of content.[22]

Data and Consumer Behaviour: Digital platforms have advanced methods for collecting data. They gather detailed information on what consumers like, how they watch content, and their buying habits. With this data, platforms can offer personalized content suggestions, targeted advertisements, and flexible pricing models. This strategy boosts user engagement and increases revenue.[23] However, these platforms collect and use a lot of consumer data, which brings up antitrust issues. Using data to gain an edge can make it difficult for new companies to enter the market. This may result in a few large platforms dominating the industry. Regulators are paying more attention to how data practices affect the market. There are concerns that big platforms might engage in unfair behaviors, such as favoring their own services or blocking competitors.[24]

Challenges in the Digital Age

The fast-paced changes in digital broadcasting create major challenges for regulators trying to keep up with new technologies. Traditional antitrust laws may not fully address the complexities of digital platforms, such as their data-driven power, network effects, and how algorithms distribute content. Additionally, digital platforms operate worldwide, making it difficult to enforce regulations because rules differ between countries. International cooperation is often needed to effectively tackle anti-competitive practices in the digital sports broadcasting market. Regulators must also find a balance between encouraging innovation and the benefits digital platforms offer consumers, while preventing market abuses and ensuring fair competition.[25]

Policy Recommendations

Encouraging Fair Competition

To ensure fair competition in sports broadcasting, several steps can be taken:

1. Shortening Exclusive Contracts: Regulators might limit how long exclusive broadcasting deals last. Shorter contracts can prevent long-term monopolies. This allows more broadcasters to obtain rights and keeps the market dynamic.
2. Making Rights Negotiations Transparent: Requiring clear bidding processes for broadcasting rights helps create a level playing field. Open auctions with defined rules can stop anti-competitive behaviors. This allows smaller and new broadcasters to compete effectively.
3. Introducing Anti-Siphoning Rules: Governments can set laws that require major sports events to be shown on free-to-air TV before pay-tv networks can secure exclusive rights. This ensures that important cultural events are accessible to everyone and prevents pay-tv from monopolizing these events.

Updating Antitrust Laws

To address the unique challenges from digital platforms and global broadcasting deals, antitrust laws need to be revised:

Redefining Market Boundaries: Traditional market definitions might not fully capture the competition from digital platforms. Antitrust authorities should include streaming services and digital content providers when evaluating market power and potential anti-competitive actions.

Combating Data Monopolies: Digital platforms use large amounts of consumer data to gain an advantage. Antitrust laws should include measures to prevent data misuse that can hinder competition. This ensures that data practices do not block new companies from entering the market.

Boosting International Collaboration: Since digital platforms operate globally, enforcing antitrust laws requires international cooperation. Creating agreements for global collaboration can effectively tackle anti-competitive practices that cross borders.

Conclusion

The sports broadcasting scene has changed a lot, with digital platforms becoming more important. This change gives consumers more access and options. However, it also brings issues like market concentration and unfair competition. Cases like the proposed Disney-Reliance merger in India show why strong antitrust enforcement is necessary to keep the market competitive. As technology advances, using artificial intelligence and personalized content will further transform sports broadcasting. Antitrust laws need to evolve to continue promoting competition and protecting consumers. Ongoing regulatory oversight and proactive policy changes are crucial to manage the complexities of the changing sports broadcasting industry.

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[1] Twin, A. (2024) Antitrust laws: What they are, how they work, major examples, Investopedia. Available at: https://www.investopedia.com/terms/a/antitrust.asp (Accessed: 23 January 2025).

[2] Bartee, , H. (2016) The role of antitrust laws in the professional sports industry from a financial perspective, The Sport Journal. Available at: https://thesportjournal.org/article/the-role-of-antitrust-laws-in-the-professional-sports-industry-from-a-financial-perspective/ (Accessed: 23 January 2025).

[3] Dowling, T. (2024) NFL must pay $4.7bn in damages after Sunday ticket broadcast lawsuit, The Guardian. Available at: https://www.theguardian.com/sport/article/2024/jun/27/nfl-must-pay-47bn-in-damages-after-sunday-ticket-broadcast-lawsuit (Accessed: 23 January 2025).

[4] Bartee, , H. (2016) The role of antitrust laws in the professional sports industry from a financial perspective, The Sport Journal. Available at: https://thesportjournal.org/article/the-role-of-antitrust-laws-in-the-professional-sports-industry-from-a-financial-perspective/ (Accessed: 23 January 2025).

[5] Guru, H. (2024) The evolution and impact of sports broadcasting, GuruHiTech. Available at: https://guruhitech.com/the-evolution-and-impact-of-sports-broadcasting/ (Accessed: 23 January 2025).

[6] Haynes, R. (2005) ‘5 Broadcasting rights to sport’, in https://academic.oup.com/. Edinburgh University Press.

[7] WIPO (no date) Broadcasting & media rights in sport, WIPO. Available at: https://www.wipo.int/en/web/sports/broadcasting (Accessed: 23 January 2025).

[8] Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922)

[9] (No date) Act of September 30, 1961. Available at: https://www.govinfo.gov/content/pkg/COMPS-12156/pdf/COMPS-12156.pdf (Accessed: 25 January 2025).

[10] Competition law treaty articles (no date) Competition Policy. Available at: https://competition-policy.ec.europa.eu/antitrust-and-cartels/legislation/competition-law-treaty-articles_en (Accessed: 25 January 2025).

[11] Alfonso, R. (no date) Wiki note: Core EU competition law provisions and sport – articles 101 and 102 TFEU, Jus Mundi. Available at: https://jusmundi.com/en/document/publication/en-eu-competition-law-provisions (Accessed: 25 January 2025).

[12] THE SPORTS BROADCASTING SIGNALS (MANDATORY SHARING WITH PRASAR BHARATI) ACT, 2007 (2007) indiacode.nic.in. Available at: https://www.indiacode.nic.in/bitstream/123456789/2076/1/A2007-11.pdf (Accessed: 25 January 2025).

[13] Tiwari, A.M. (2024) Laws relating to broadcasting of Sports in India, Legal Service India – Law, Lawyers and Legal Resources. Available at: https://www.legalserviceindia.com/legal/article-15640-laws-relating-to-broadcasting-of-sports-in-india.html (Accessed: 25 January 2025).

[14] azb, partners (2016) Supreme Court decision in the case of Star Sports India Private Limited v. Prasar Bharati and Ors., azb. Available at: https://www.azbpartners.com/bank/supreme-court-decision-in-the-case-of-star-sports-india-private-limited-v-prasar-bharati-and-ors/ (Accessed: 25 January 2025).

[15] PIB, P. (2018) CCI passes order under Lesser Penalty Provisions against broadcasting service providers for rigging bids in tenders by Sports Broadcasters, Press Information Bureau Government of India Competition Commission of India. Available at: https://pib.gov.in/Pressreleaseshare.aspx?PRID=1538371 (Accessed: 25 January 2025).

[16] Massive Reliance-Disney merger cleared by India watchdog (2024) BBC News. Available at: https://www.bbc.com/news/articles/c7v5j5dern7o (Accessed: 25 January 2025).

[17] Global sports policy (2022) Role of competition law in Sports in India, GSPR. Available at: https://www.g-spr.com/post/role-of-competition-law-in-sports-in-india (Accessed: 25 January 2025).

[18] Locker, B. (2024) NFL ordered to pay $4.7 billion in ‘Sunday ticket’ antitrust lawsuit, New York Post. Available at: https://nypost.com/2024/06/27/sports/nfl-ordered-to-pay-4-7-billion-in-sunday-ticket-antitrust-lawsuit/ (Accessed: 25 January 2025).

[19] Reuters, R. (2024) F1 owner Liberty Media’s motogp deal faces EU probe, Bloomberg News Reports | Reuters, www.reuters.com. Available at: https://www.reuters.com/sports/formula1/f1-owner-liberty-medias-motogp-deal-faces-eu-probe-bloomberg-news-reports-2024-12-12/ (Accessed: 25 January 2025).

[20] Amazon Prime Video shifts focus to live sports to boost profits, the information reports | (2025) Reuters. Available at: https://www.reuters.com/business/media-telecom/amazon-prime-video-shifts-focus-live-sports-boost-profits-information-reports-2025-01-24/ (Accessed: 25 January 2025).

[21] Thomas, D. (2025) Len Blavatnik pumps further $800MN into creating ’Spotify of Sport’ , Subscribe to read. Available at: https://www.ft.com/content/4aff9714-f70f-4ce1-ac8d-f2fcf682a434 (Accessed: 25 January 2025).

[22] Blasi, W. (2025) Netflix’s live-sports strategy is working. but its next play might surprise you., marketwatch.com. Available at: https://www.marketwatch.com/story/netflixs-live-sports-strategy-is-paying-off-but-its-next-play-might-surprise-you-834fdeab (Accessed: 25 January 2025).

[23] PricewaterhouseCoopers (no date) Streaming the game: How the rise of digital platforms is changing sports consumption, PwC. Available at: https://www.pwc.com/us/en/industries/tmt/library/sports-streaming-platforms.html (Accessed: 25 January 2025).

[24] ROGERSON, W.P. and SHELANSKI, H. (no date) Antitrust Enforcement, regulation, and digital platforms, scholarship.law.upenn.edu. Available at: https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=9716&context=penn_law_review (Accessed: 25 January 2025).

[25] ROGERSON, W.P. and SHELANSKI, H. (no date) Antitrust Enforcement, regulation, and digital platforms, scholarship.law.upenn.edu. Available at: https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=9716&context=penn_law_review (Accessed: 25 January 2025).

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