The document discusses sports broadcasting in Latin America. It notes that the global value of sports broadcasting rights reached $55.2 billion in 2022, with 4.5% ($2.4 billion) in Latin America. In Brazil, national football league broadcasting rights generated around $270 million in 2019. The document outlines how broadcasting rights are traditionally sold through free-to-air TV or pay-TV, but new over-the-top services are changing the model and intensifying competition. Collective selling of exclusive broadcasting rights packages has typically been the dominant model. The application of competition law to collective selling is also discussed.

1. Sports Broadcasting
Competition and Sports – LAC OECD Meeting
Marcela Mattiuzzo
Professor at INSPER, Partner at VMCA

2. Sports industry in Latin America
• The sports industry involves various economic activities such as labour market,
organization of tournaments, broadcasting of events, advertising and sponsorship,
sale of events tickets, merchandising, among others.
• The main economic players within this industry include athletes, clubs (teams),
leagues, sports governing bodies (federations), sponsors, broadcasters,
advertisers and supporters.
• Global value of sports broadcasting rights reached USD 55.2 billion in 2022, 4.5% of
which in Latin America.
• In Brazil, the sale of broadcasting rights of the national football league led to
around USD 270 million in 2019, and the revenue from the leading football
clubs reached USD 1.3 billion in 2021.
• Global players’ transfers football market generated USD 7.4 billion worldwide in
2019, 12% of which involved clubs in Latin America.

3. Sports Broadcasting - Overview
• Traditionally, sports are broadcasted in two main ways: (i) free-to-air TV,
comprising public service broadcasters and commercial broadcasters (financed by
advertising revenues); and (ii) pay-TV based on subscription fees.
Transformations: Over-the-top (OTT) services provide consumers with access to
content from any compatible device, anytime, at their will. This has been changing
consumer behavior, driving a shift from TV to online video consumption. Supply side
is also changing with an increase of different business models, with both new
online-only competitors and incumbent media players taking part in this sector. The
incursion of OTT into the realm of sports broadcasting is intensifying competition, a
trend exemplified by the dynamic landscape in Brazil.
Sports broadcasters in Brazil
until 2020:
Sports broadcasters in Brazil
since 2020:

4. Sports Broadcasting - Overview
• In the sports industry, sports organizations are
upstream suppliers of audio-visual “raw content” to
downstream broadcasters, through the
commercialisation of broadcasting rights
§ Broadcasters package these rights and sell sports
programmes to audiences in the downstream
market. In the downstream market, broadcasters
compete for viewers.
• The commercialization of broadcasting rights
represents a pivotal revenue stream for the majority of
sports organizations, constituting a substantial portion,
typically ranging from 40% to 60%, of their total income.
§ Having access to sports content often drives a
relevant part of the demand for pay-TV and OTT
services. However, given the limited number of
premium sports events every year, sports content
has become scarcer and therefore a bottleneck in
the broadcasting market

5. Sales of Broadcasting Rights
• The sale of sports broadcasting rights can be done individually (by each team)
or by joint sales. When done individually, each club sells the broadcasting
rights of its home matches. When done jointly, all clubs of a league or
championship bundle the broadcasting rights of all the respective matches and
sell them together
§ Collective selling of exclusive packages has been the dominant model for
commercialising sports broadcasting rights worldwide. FIFA reported that
88% of broadcasting rights of top-tier football competitions are sold
collectively.
• This market operates based on procurement processes, direct negotiations,
revenue distribution and the segmentation of rights and markets.
• Sports leagues, or those representing them, usually hold competitive bidding
processes to sell a bundle of rights. Such rights are then negotiated with audio-
visual producers, marketing agencies or broadcasters to transmit the sporting
events on free-to-air, pay-TV, pay-per-view, streaming services or other means.

6. Regulatory Approaches
Free market approach: Driven by commercial, rather than
sociocultural goals. United States, Brazil and South Africa can be
characterised as predominantly market-driven, as there is no major
sports broadcasting legislation.
Strong regulation approach: Australia, Argentina and India are
examples of strong regulation of sports broadcasting, with major
sports broadcasting legislation, protecting coverage of major sporting
events on free-to-air television.
Balanced regulation approach: EU’s regulation of sports
broadcasting provides the best example of a balanced approach. Unlike
in the strong approach, this one allows the television rights to be
purchased by either free or pay TV broadcasters, but restricts the
broadcast on pay-TV, unless there is no interest by free-to-air
broadcasters.

7. Competition Law Issues
• To date, the application of competition law to sports broadcasting has
focused mainly on the collective selling by sports leagues of the rights to
broadcast exclusive live coverage.
• The case for regulatory intervention is based on the argument that by
selling their rights collectively through a league, clubs act as a cartel,
colluding to artificially create a monopoly and extract supra-competitive
rents from their customers (broadcasters), increasing prices and limiting
output.
• Collective selling can also undermine the development of innovative
submarkets, such as new media markets and cross-border broadcasting,
to ensure rents from the exclusive sale to pay-TV broadcasters. Therefore,
these arrangements can reinforce the market position of dominant
incumbent broadcasters.

8. Competition Law Issues
• According to Evens, Iosifidis and Smith, 2015, there are three
main means by which collective sale agreements tend to
restrict competition:
1. Collective selling gives the league market power to
dictate the price of broadcast rights, which leads to
inflated prices for both broadcasters (upstream) and
consumers (downstream).
2. Collective arrangements also tend to limit the
availability of rights to sports events.
3. Collective selling arrangements can strengthen the
market position of the most important broadcasters.

9. Competition Law Issues
• In defence of collective selling of broadcast rights, it is pointed out that sports,
and in particular team sports, have several distinct economic characteristics
which make the application of general competition law inappropriate:
1. The production of sporting contests in professional teams requires joint
production by at least two individual teams.
2. If individual teams are allowed to sell the broadcast rights to their matches,
it may lead to income disparities (based on number of supporters and
commercial projection of a club), which reduces the competitive balance
of the league and undermines the long-term popularity of the competition.
3. Leagues that operate collective selling share the revenue from broadcast
rights much more evenly, albeit in various ways and to varying degrees.

10. Case Law
The most relevant case was settled in 2010, involving a joint selling by the Brazilian biggest football clubs to broadcast
matches of the Brazilian football league to Globo, Brazilian leading broadcaster. The investigated parties signed an
agreement with CADE to close the investigation, including the following commitments: (i) elimination of the “preference
clause” (i.e. according to which for new contracts rival broadcasters had to submit every bid to Globo, who could match
the bid); (ii) introduction of an auction with clear and objective riles to award the broadcasting rights; (iii) unbundling of
broadcasting rights in five relevant media platforms (free-to-air TV, pay-TV, Pay Per View, mobile and internet).
In 2019, CADE initiated a new investigation on the sale of broadcasting rights of football events, which is still ongoing.
CADE opened another proceeding to investigate an alleged international cartel, with effects in Brazil, in the market of
broadcasting rights for sports events. The General Superintendence alleged that the investigated parties fixed prices,
shared the market and rigged bids in competitive bidding processes for sports events broadcasting rights.
In the realm of merger control, the Disney-Fox merger of 2019 witnessed CADE as the final Competition Authority to grant
approval. CADE's decision carried significant weight, as it imposed stringent structural remedies regarding the divestiture
of the sports broadcasting channel Fox Sports. Given Disney's pre-existing ownership of the ESPN channels, CADE
deemed it essential to prevent the creation of a potential monopoly in the pay-TV sports broadcasting market.

11. Case Law
The Disney-Fox Merger in 2019 led to the main decision by the Argentinian Authority regarding
broadcasting rights. The CNDC issued an Objection Report, stressing the worrying impact on the
concentration in the market for sports-themed pay-TV basic signals. In addition to concentration
indicators, the CNDC studied some qualitative elements that could accentuate or eventually mitigate the
effects of the deal.
The CNDC finally authorized the merger on the condition that structural and behavioral remedies were
implemented. In relation to the sale of assets, the Commission pushed in particular for the sale of
broadcasting rights for live sporting events, considering that a signal’s value lay in the “must-have”
content. It also established several requirements concerning the multiplicity of sports to be broadcasted,
because the signals that drew a large audience tended to offer a varied range of sports. If the two
conditions were not met, structural remedies would not be sufficient to restore competitive conditions.

12. Case Law
On February 2023, the FNE rejected a complaint filed in December 2022 by a private party, regarding the
direct, exclusive and free allocation of the broadcasting rights to the 2023 Pan American Games and
2023 Parapan Games. According to the complaint, the Santiago 2023 Committee, which is in charge of
organizing the Games and allocating the TV broadcasting rights to this multi-sport event, justified this
decision on the public role of TVN, a state-owned channel, and on its greater geographic coverage.
However, new facts later arose that implied that the allocation of TV broadcasting rights was no longer
exclusive. Indeed, in view of the FNE intervention and market reactions, and after the alternative
proposal that did not succeed with any of the remaining channels, the Corporation offered them the
allocation on similar terms to TVN, as long as they matched or improved its offer.
The Disney-Fox merger also ignited competition worries in Chile, with the FNE concluding that the
transaction would increase the bargaining power of the merged entity, leading to an increase in prices
or a worsening of other commercial conditions. The merger was cleared with remedies absolutely
prohibiting the tied and bundled sales between Disney and Fox channels.

13. Thank you!
marcela@vmca.adv.br