CNMC moves to prevent LaLiga pay-TV rights being sold to one bidder
Spanish soccer’s top-tier LaLiga has been requested by the CNMC, the country’s competition regulator, to scrap one of the lots in its proposed domestic tender for media rights in the next cycle on the grounds that it would allow a single operator to be awarded all of the pay-television rights.
It emerged yesterday that the regulator had stated that the draft set of rules it had received from the league last month for seasons 2019-20 to 2021-22 only “partially complies with the obligations established” by the Royal Decree of 2015 that reintroduced the collective selling of rights in Spanish soccer.
The rights have been divided into 10 lots, and the CNMC’s most significant objection appears to relate to lot 7, which it wants eliminated “given that it unjustifiably distorts the allocation of lots 4 and 5 of the same procedure, and allows the same pay-TV operator to capture the main core of rights tendered by the LNFP [the Spanish league].”
LaLiga has set a target of €1.3 billion ($1.6 billion) per annum from the sale of domestic media rights in Spain in the next three-year cycle, with a bulk of the income expected to come from subscription broadcasters.
At present Mediapro, the Spanish sports rights agency, together with its pay-TV partner BeIN Sports, and Movistar Plus, the satellite and IPTV pay-TV service of Telefónica, hold the major live rights packages in Spain in three-year deals worth a total of €1.9 billion and €750 million, respectively.
Lot 4 in LaLiga’s proposed tender comprises one exclusive match per round, to be shown free-to-air or on pay-TV, from the top division, and one exclusive match, on the same basis, from the second division, plus non-exclusive free-to-air or pay-TV rights to the six matches in the promotion play-offs.
Meanwhile, Lot 5 is made up of exclusive rights to eight matches per round from the first division, to be shown on pay-TV only, non-exclusive pay-TV rights to the promotion play-offs and pay-TV rights to the Copa del Rey, the national cup competition, excluding the semi-finals and final.
The disputed Lot 7 includes all rights in Lots 4 and 5 with the exception of the exclusive second division match.
Exclusive free-to-air rights to the semi-finals of the Copa del Rey are included in Lot 1, which also includes one exclusive free-to-air match per round from the first division, in what represents a departure from the previous tender.
By law, the Copa del Rey final has to be shown live on free-to-air television, and the rights to the game are sold separately by the RFEF, the Spanish football federation.
Outlining its stance on the tender, the CNMC said “the award [of rights] must be made through a public, transparent, competitive procedure and without discrimination of bidders, based on objective criteria, which must include, mainly, the economic profitability of the offer, the sporting interest of the competition, and the growth and future value of the audiovisual rights that the awardee may provide.”
It added: "If the economic offer is not going to be the only valuation criterion used by LNFP, the entity should develop and assess what weight it will give to the economic offer in view of the allocation of a certain lot and what weight they will give to the other valuation criteria."
In addition to requesting the elimination of lot 7 and a review of the process for allocating the lots so that it adheres to the Royal Decree, the regulator has recommended various changes to the tender, namely:
• Review of the regulation of the right of access to stadiums for news summaries
• Review of the time slots in which matches will be played so that there is more certainty over the setting of kick-off times by winners of the lots
• Apply the criteria established by the judicial and competition authorities, and minimise distortions in the allocation of rights
• Review the news obligations and marketing obligations imposed on the winners of the lots, since these go beyond what is reasonable and may breach the Antitrust Law
• Avoid including obligations to providers of audiovisual communication services in the field of advertising, specifically regarding sponsorships, which may be incompatible with the law
LaLiga is not duty bound to accept the recommendations of the CNMC not covered by law, but said yesterday that it would “carefully study” them, with the objective that the final version of the rules of the tender is in accordance with the Royal Decree and the antitrust regulations.
LaLiga president Javier Tebas has maintained that the league is targeting €2.3 billion per year from sales for the next cycle, including €1.3 billion from the domestic market, and €1 billion internationally.
He has recently played down concerns raised by Spanish telecoms companies, including Telefónica, over increasing rights costs and sub-licensing fees in soccer, claiming that it has a contingency, possibly its own over-the-top service, if the bids do not match expectations.
In an interview with AS last week, Tebas said: "Before the end of the [2017-18] season we want to have the packages awarded or the contest declared void if the amounts we want are not reached."
Tebas added: "If you do not attend our contest, we have other strategies. We have one year left [to decide]. It is for 2019."