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The new amendment ramifications for competition law on sports exclusivity

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The effect of this arrangement on competition law therefore, has to be evaluated within Nigeria’s peculiar economic and legal context, taking into account, for example, the feasibility of participants selling rights individually.

Apart from the regulatory mechanism embedded in the new NBC Code, Nigeria enacted the Federal Competition and Consumer Protection Act in 2019 which has wide-ranging competition law provisions.

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.

However, of major concern is the mandatory requirement to sub-license broadcast rights as provided in section 9.0.1 of the new NBC Code. The Amendment provides that:

‘licensee of broadcasting rights shall not enter into an agreement- whether in Nigeria or anywhere in the world- which seeks to prohibit the sub-licensing of such broadcasting rights’.

This provision apparently, proceeds on the mistaken assumption that the licensees of the broadcast rights agreements are obliged to sub-license and re-sell a quantum of these rights to other local broadcasters.

This provision may become problematic, particularly where the licensee (whether out of commercial expediency or contractual obligation) insists against sub-licensing of the broadcasting right.

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Taking the broadcast rights of the English Premier league for example which is exclusively owned by Multi-Choice in Nigeria, with the prohibitive rates of premium sports contents, the author struggles to hazard a guess of how many local TV stations that can match Multi-Choice’s asking price in a sub-licensing arrangement.

Directing the rights holders of premium entertainment content without considering the peculiar commercial realities in the country is with the greatest respect, disingenuous.

Perhaps the Federal Government can borrow a leaf from the UK, which has through technological innovations and regulations enhanced the commercial potentials in sports broadcasting without infringing on its Competition law.

In the Bundesliga, for instance, commitments were offered that divided rights into separate packages for internet, TV and Mobile broadcasting. This system has been replicated in Spain, and Italy and even some South American countries.

Similarly, the FA Premier League in England bifurcated broadcast rights into packages for mobile, internet and radio, without breaching the rule against exclusivity. It is hoped that the rights holders would consider this to ensure it does not run foul of these regulations.

As a post-script, the author takes the view that granting broadcasting rights for sports events on an exclusive basis is an established commercial practice and one which has gained worldwide recognition.

Undoubtedly, it enhances the value of TV rights for sport events, especially given the ephemeral nature of the value of sports events. Issues of exclusivity in selecting sporting events for a short period would typically not pose any competition problems.

However, exclusivity for a longer period and for a wide range of rights can restrict competition, as it is likely to lead to market foreclosure. This is particularly the case if the broadcaster is in a dominant position. Exclusive broadcast rights agreements with automatic renewal clauses are inherently anti-competitive and would infringe on existing regulations.

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Admittedly, the author is not privy to the existing TV rights agreement between Multi-Choice and the Premier League but takes the humble view that the issues surrounding exclusivity can be mitigated by encouraging Nigerian brands to make incursions into the market by acquiring other packages such as live streaming packages similar to the one acquired by Amazon for the 2019 -2022 season.

This is analogous to the sub-licensing arrangement between Talksport in the UK and Lagos Talks FM which has enabled the latter to broadcast live Premier League Matches to its audience.

Instead of hounding the licensees/rights holders, Nigeria should see this regulation as an opportunity to leverage on other available packages in the broadcast rights chain.

The argument on sub-licensing is inherently flawed and fraught with logistic challenges especially regarding the fact that the price for such arrangements would be prohibitive and bound to frustrate Nigerian bidders. Critically, the government may not be in the best position to fix the prices for the rights.  

Looking at the various provisions of the Amended Code, it is commendable that efforts are being made to protect the national interest. However, a rigid application of some of the provisions could stifle foreign investment.

The government can adopt the sub-licensing approach but should allow sub-licensees to pay the market price as proposed by the licensees. It is hoped that a broader consultation with the stakeholders would address some of the niggling issues in the amended code.

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