Collective Selling of Broadcast Rights in Serie A

The broadcast company Sky Italia has submitted a complaint to the European Commission in relation to proposed legislation approved by the Italian government which would mean that the broadcast rights for Italian Serie A matches will be sold centrally.

Sky Italia is the Italian satellite broadcasting division of Rupert Murdoch's News Corporation. It argues that the centralised selling of broadcast rights, which will come into force beginning with the 2010-2011 Serie A season, is in breach of competition law and will force it to purchase certain broadcast rights that it may not want to acquire.

Italian clubs have individually negotiated the sale of rights to broadcast their matches since 1999. This has commercially benefited the biggest clubs such as AC Milan, Internationale, Juventus and AC Roma whose rights are deemed to be considerably more valuable than the smaller Serie A clubs by virtue of their wider fan base and success.
However, last year Serie A clubs agreed following a majority vote to establish a formula whereby the sale of broadcast rights in Italy would be conducted on a central basis (with 40% of all revenues being distributed equally amongst clubs, 30% being determined by the performance of each club and 30% being apportioned in accordance with each club's fan base). The intention was to ensure greater competition between clubs in Serie A and to bridge the widening gap between the rich and the poor clubs.

By comparison, the Barclays Premier League currently divides revenues according to a different formula, with 50% being distributed equally amongst clubs, 25% being distributed in accordance with each club's final league position, and 25% being distributed in accordance with the number of television appearances made by each club. The net effect of this apportionment is that broadcasters bid more for games involving the top clubs.

Other leading European leagues (such as those in France and Germany) also sell their broadcast rights centrally, albeit using a different formula, but Sky Italia is upset that government intervention has been at the root of the changes in Italy. In other European countries the leagues work with anti-trust regulators to determine the appropriate formulae.