Tuesday, March 11, 2008
Joint selling and antitrust in the Bundesliga
The new TV contract for the Bundesliga, like many in the States and elsewhere, is a joint selling arrangement, although revenue sharing appears to be more complicated than a simple 1/N rule. This sets the stage for a massive wrangle over just what the shares will be, with redistribution from the large to small clubs being the key issue. Enter the antitrust agency:
A new lucrative television contract for the Bundesliga was criticized by Germany's anti-trust agency on Monday.So, the threat of a price fixing charge is the leverage for squeezing more money out of Bayern Munich. No wonder the German giants are playing in the B-league European competition (the UEFA Cup), rather than the Champions League. Germany's politics won't allow Bayern the funds to compete at the top level any more. And yes, Bayern are currently leading the Bundesliga and are thus likely to return to the Champions League next season. But they will do so with a revenue handicap of about €75m, if the article's figures are accurate.
The federal office said the €3 billion (US$4.5 billion) contract will only be allowed if small clubs are awarded more money. The agency has investigated the central marketing policy of German top division clubs for several years.
"Central marketing of media rights has the same effect as controlling prices," Ralph Langhoff, an anti-trust agency official, was quoted as saying in the trade magazine Kicker.
Media mogul Leo Kirch's new company, KF 15, has offered the Bundesliga a sizable increase in television revenues with the €3 billion spread over six years.
The Bundesliga, composed of both the first and second division leagues, splits TV revenues and is regarded as more equitable than the other top European leagues in England, Spain and Italy.
Labels: antitrust, soccer, television
Wednesday, October 24, 2007
Sandomir on the Rangers vs. NHL Lawsuit
We previously discussed the NY Rangers antitrust suit against the NHL, demanding that they be able to run a website independent of the other 29 teams. Like MLB and the NFL, the NHL has moved to a "unitized" internet business model. Here is NY Times sports media beat writer Richard Sandomir's take on the suit:
The rhetoric of the Rangers, and their parent, Madison Square Garden, features phrases like "unrestricted power," "illegal cartel," "seizure," "crackdown" and "blatant expropriation of team assets."Sandomir has some useful facts and analysis as well. Recommended.
There is a Marxist twist to this. Not Karl, but Groucho. The Rangers could well have cited in their legal papers the far funnier Marx, who once said, "I wouldn’t belong to any club that would have me for a member."
Saturday, September 29, 2007
Hockey team sues NHL
The NHL violated antitrust laws and is acting like "an illegal cartel" by monopolizing control of team promotions, Madison Square Garden claimed in a lawsuit Friday.The NHL appears to be copying major league baseball's approach to managing team websites. Surely there are significant economies derived from MLB running astros.mlb.com, padres.mlb.com, etc. for the team. Baseball's internet operations have turned into a significant revenue generator for the league and its teams, and this revenue growth is surely not derived from restricting competition.MSG, which owns the New York Rangers, said it filed the suit in U.S. District Court in Manhattan because the NHL would begin fining the organization $100,000 per day starting Friday if the company did not give the league complete control over the Rangers' Web site and other promotions.
The league is seeking to control the licensing of teams for all commercial purposes and to stop teams from marketing apparel, merchandise and memorabilia, the suit said. MSG asked that a judge order the league to stop limiting team promotions, and it also wants the court to clarify the boundaries of the league's rights.
The company said the NHL had once worked with teams in a legitimate joint venture but had more recently "veered into unlawful behavior."
"By seeking to control the competitive activities of independent businesses in ways that are not necessary to the functioning of that legitimate joint venture, the NHL has become an illegal cartel," the suit said.
In 2006, Chris Isidore wrote:
One of Selig's greatest legacies might end up being MLB Advance Media, the joint Internet operations for all the clubs. Besides being a leader in things like Web casts and mobile updates for fans, Selig was able to get the owners to agree in 2000 to equally share their Internet revenue, a move that might one day be comparable to Pete Rozelle getting the NFL owners to agree to share their national television revenue.These facts suggest to me that the NHL's website operations can be cast in a joint venture framework. MSG's real complaint could be with the manner in which the venture is produced or, more likely, how the revenues are distributed.
Both newyorkrangers.com and rangers.nhl.com claim to be the "official site of the NY Rangers." They are built from a similar template and look equally crummy, although the Rangers' own site has a "Rangers Account Manager" tool that is lacking on the league-produced page.
