TELEPIÙ
PRESS RELEASE
PRESS RELEASE
Television broadcasting rights: Telepiù's request for an exception to the 60% ceiling is rejected
Following proceedings initiated under law No. 78/99 the Competition Authority has ruled, with the Communications Regulator concurring, that the conditions do not obtain for granting Telepiù the statutory exception to the 60% ceiling on the acquisition of exclusive encrypted broadcasting rights for Serie A football championship matches.
On 18 June 1999 Telepiù concluded a contract with an eleventh Serie A football club, Reggina, assigning it broadcasting rights over home matches. This would have given it broadcasting rights for 187 matches in the forthcoming Serie A championship, equivalent to 61.1% of the total matches played (306). However, the contract was conditional upon obtaining the waiver from the Compeition Authority for which a request by filed by Telepiù on 24 June.
Section 2(1) of law No. 78/99 sets a statutory ceiling of 60%, but also makes provision for the Competition Authority to grant a waiver to this ceiling, after receiving the opinion of the Communications Regulator, or to set other ceilings taking account of the general conditions on the pay-TV market, the aggregate ownership of other sports broadcasting rights, the duration of the contracts, and the need for real competition on the market. The Authority is also required to guarantee avoidance of 'distortions that might have harmful effects on the negotiation of broadcasting rights relating to events of lesser commercial value'.
The evaluation of the statutory parameters, particularly those relating to the long-term rights acquired by Telepiù, led the Authority to rule that there were grounds for thinking that the waiver might be likely to prejudice the development of the market in its initial phase. It therefore refused to grant the exception.
After carefully examination the Authority reached the decision that the refusal to grant the exception requested by Telepiù was not likely to damage events of lesser commercial value. Furthermore, the effectiveness of the Reggina contract was subject to obtaining the waiver from the Authority. This condition had been independently agreed upon between the parties, demonstrating their complete awareness of the possible consequences of exceeding the statutory threshold set by law No. 78/99.
In reality, the Authority neither authorizes nor prohibits individual contracts but merely ascertains compliance with the statutory threshold set by law No. 78/99. Ascertaining compliance with the 60% ceiling does not therefore, in principle, mean that one specific contract - in the instant case, the Reggina contract - is at issue, or necessarily involve splitting the broadcasting rights of any particular team. Consequently, the Authority's ruling does not prohibited the broadcasting of all the matches for which Telepiù has acquired the rights, provided that some of them lose their exclusive character to which the prohibition specifically applies.
Rome, 28 July 1999