Having analyzed the commercial implications of this deal, it is pertinent to take a cursory look at the legal implications of the broadcast deal. As noted earlier, the sale of TV rights in sports entails a joint selling model that allows the football association or relevant league regulatory body to negotiate the sale of these rights to a rights buyer.
This model has been criticized for restricting competition. This concern has been ameliorated in large part by the unbundling of broadcast rights that can be sold to an individual bidder.
Thankfully, technological intervention has ensured that the fears of restriction of competition and exclusivity do not jeopardize the commercial prospects of the deal.
The legal implications of this deal are very straight forward. Nigeria earlier this year, passed the Federal Competition and Consumer Protection Act. The Act aims at promoting a competitive market and protecting consumer rights in Nigeria. Before the enactment of the Act, there was no single piece of legislation regulating competition in Nigeria.
Read related articles in this series
- The collective sale of broadcast rights package and legal implications.
- The legal and commercial implications of the new broadcast deal of the Nigeria Professional Football League.
- Non exclusive broadcasting and sports
Thus, provisions of laws regulating competition were found in various legislation such as the ISA; the Nigerian Communications Act 2003; the Electric Power Sector Reform Act 2005 amongst other laws. However, the new Act applies to all businesses in Nigeria and supersedes all laws on competition and consumer protection.
The Act prohibits unfair business practices or abuse of dominant market position by any company, as well as an agreement to restrain competition such as agreements for price-fixing, price rigging, collusive tendering, etc.
To regulate and facilitate competition, the President may from time to time, by order published in the Federal Gazette, declare that prices for goods and services specified in the order shall be controlled in line with the provisions of the Act.
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This legislation has far-reaching implications for this deal. For one, it ensures that this deal is subject to some regulatory mechanism that would keep the sponsors in check. It also gives aggrieved consumers the rights to challenge any arbitrary increase in subscriptions.
Above all, the law would facilitate competition and put both the LMC and Next TV on their toes to ensure the end-users of this deal get the most out of it. At any rate, time will tell whether the LMC has made judicious use of the commercial potentials of this deal.
