Europe's state-owned broadcasters lose sports rights case

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LUXEMBOURG -- The European Broadcasting Union (EBU)--the group of primarily state-owned broadcasters--and Europeans, accustomed to watching major sporting events for free, have been dealt a serious blow by a July 11 court ruling.

In 1993 the European Commission gave the EBU a five-year exemption to antitrust rules that allowed members to club together to buy exclusive TV rights to major sporting events.

In February this exemption allowed the EBU to buy the exclusive European TV rights to three summer and two winter Olympics between 2000 and 2008 for $1.4 billion. EBU also has the TV rights to the 1998 soccer World Cup finals in France.

On Thursday The European Court of the First Instance in Luxembourg annulled the European Commission's decision following a complaint filed by several privately owned broadcasters.

Private broadcasters welcomed the ruling against the European Commission which gave the EBU antitrust immunity to buy exclusive sports rights.

Exclusive broadcast rights to sporting events have become crucial to the building of private television. Rupert Murdoch's U.K. satellite service BSkyB has built up its subscriber base by acquiring exclusive rights to events such as English Soccer's Premier League. The EC gave the EBU the exemption because it was worried that state owned broadcasters, particularly those in smaller countries, would be outbid by smaller broadcasters.

The Commission and the EBU are expected to appeal against the verdict at the European Court of Justice.

If the final verdict goes against the EBU, then all sports rights from then on will have to be bid for on equal terms. The EBU's contracts for the Olympics through to the year 2008 and its rights to the 1998 soccer World Cup finals are not expected to be put out to tender again.

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