World Crisis Online

That most exclusive of clubs, the chairmen of the Premier League’s 20 teams, sat down to dinner on Thursday night after a board meeting at the Churchill Hotel in central London, contemplating a very unsavoury problem.

It was not sexism in football, but the financial foundation of the league and their clubs’ TV rights income. Nevertheless, that foundation is under threat because of two women – pub landlady Karen Murphy and Juliane Kokott, advocate-general at the European Court of Justice.

Ms Kokott on Thursday said Ms Murphy was justified in arguing she should be allowed to show live Premier League matches in her Southsea pub using a Greek decoder card rather than the encrypted service of BSkyB, which owns the UK rights. BSkyB charges pubs about £10,000 a year. But Nova had bought the Greek rights to EPL matches at a much lower rate so Ms Murphy was charged a 10th of what she would have had to pay the UK broadcaster.

The advocate-general’s opinions are generally endorsed by the ECJ. If that happens, the implications cannot be underestimated – for the league, which receives £1.8bn for the three-year UK rights, the clubs, whose income from TV generates nearly half their income, and their players, whose wages are inflated because of the level of TV income.

Ms Kokott’s opinion also applies to home viewers of live matches. She said the sale of rights country by country was against the European Union’s internal market.

Landlady’s reaction

‘I’m fighting for freedom of choice’

“It’s not about football, it’s about principle,” says Karen Murphy from her pub in Southsea. Her husband supports Portsmouth, but she is not particularly interested in the game.

However, according to Paul Dixon, her lawyer, she fights for her rights. “Good on her,” he says.

Ms Murphy likens her struggle with the combined forces of the Premier League and BSkyB as “a bit like David and Goliath”. She has fought her case with backing from European satellite providers, but few others took much notice.

Mr Dixon says the case was fought with minimum resources. “We’ve had leading counsel and had a pretty small legal team, compared to what was trotted out by the Premier League,” he says.

Ms Murphy says her 5½-year battle has been “a bit unnerving”, and at times made her wonder if it was worth it.

“I’m fighting for freedom of choice. Sky are overcharging, they are dictating, they have too much control, not only over the TV market, but over the whole football situation,” she says. She thinks the financial problems in the game are the result of the huge sums of money the Premier League makes in TV rights. Her customers have been fed whatever sporting diet terrestrial television has served since she was convicted in 2007 of breaching UK copyright law and fined £8,000 for screening live Premier League football using a Greek decoder card.

“Sky is a private company with private interests and private profits and they shouldn’t be dictating to us.” BSkyB declined to comment.

The only crumb of comfort for the club chairmen is the knowledge that the £1.4bn the Premier League receives from the sale of live matches to non-European markets is unaffected.

In future, it must be carried out on a pan-European basis, which would mean redrawing the Premier League’s TV rights distribution system.

It is not just the Premier League, but other rights holders such as Uefa, that look set to feel the effect. Also caught up would be other creative industries.

“This will have a colossal impact across the EU . . . ,” says Robert Vidal of Taylor Wessing, a European law firm, “as it will initiate a race to the bottom on price, not only in relation to broadcasting, but also for digital music, books and film as broadcasters and other providers compete with each other on a pan-European basis.”

Small wonder that Ms Kokott’s opinion has staggered the Premier League, the club chairmen, BSkyB and numerous lawyers.

The Premier League, which retorted that Ms Kokott was simply wrong, must hope that the ECJ will eventually conclude that she has over-reached herself. But her position is shared by MEPs and the Brussels executive. Richard Scudamore, Premier League chief executive, must now draw up a contingency plan for what a pan-European sale of the league’s broadcast rights would look like from 2013 onwards.

That will involve second-guessing how much broadcasters such as BSkyB and ESPN, the only probable bidders for a pan-European package, would pay.

Omar Sheikh of Credit Suisse said: “If this is followed through and it actually happens, ultimately the value of the rights will probably go down because there are only two likely bidders on a pan-European basis.

“Another big question for Sky will be what will they be able to charge for business subscriptions after this ruling?”

Analysts estimated that the loss of income for BSkyB from pubs and clubs would be about £70m. BSkyB insiders were not rushing to judgment. “The Premier League will adapt and they will find a way to market rights that maximises value,” said one.