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ip/01/1579

Brussels, 13 November 2001

Commission clears sports rights venture between Canal+, RTL and Groupe Jean-Claude Darmon

The European Commission has cleared the acquisition of joint control by French pay-television group Canal+ S.A and Luxembourg-based RTL Group of French sports rights agency Groupe Jean-Claude Darmon S.A (GJCD). As part of the deal, Canal+ and RTL will merge their own sports rights agencies, respectively Sport+ (France) and UFA Sports GmbH (Germany) into the GJCD joint venture. The Commission's analysis has shown that the venture will result only in insignificant and limited overlaps in the market for the acquisition and re-sale of sports TV rights which are not of a nature to reinforce Canal+'s position in the downstream pay-TV market or RTL's European presence. KirchMedia and the European Brodcasting Union (EBU) will remain strong competitors.

The new joint venture will include the activities of GJCD, Sports+ as well as UFA Sports and will operate as a trader of TV sports rights and provider of marketing services for sports events, especially for football.

The Commission examined carefully the impact of the merger, the first one to have been notified for regulatory clearance in the European Union in the field of sports rights.

But it found only minor horizontal overlaps, namely in the market for the acquisition and re-sale of football broadcasting rights for events played annually and, even there, they are limited to the qualifying matches of the UEFA Champions League and of the UEFA Cup. In France, where the merger's impact will be felt the most, the overlaps amount to less than 10% in terms of value of the market and represent only 4-5% of the total matches played in the qualifying rounds of the UEFA Champions League and the UEFA Cup.

The Commission found no overlaps regarding the rights for the final rounds of the UEFA Champions League and the UEFA Cup or for the national leagues and cups, which are much more attractive.

It also established that the markets for the acquisition and re-sale of football broadcasting rights to events that are played more intermittently such as the FIFA World Cup and the European Championships was unaffected by the transaction.

Having concluded that the merger did not result in any significant overlaps, the Commission also examined the extent to which it could have an adverse effect on the markets for downstream television broadcasting (so-called vertical integration), especially in view of third party concerns that the transaction might strengthen Canal+'s dominant position on the pay-TV markets in several Member States and RTL's presence on the free TV market.

Its investigation showed, however, that this would not be the case given, in particular, the strong competition from other European sports rights traders such as TEAM, KirchMedia and EBU, a grouping of European free-to-air television channels. KirchMedia and EBU are themselves either vertically integrated or co-operate in the acquisitions of sports rights.

The Commission also took into account the significant increase, in the last few years, of the bargaining power of the rights holders in particular with respect to the most attractive football rights as well as the absence of any significant barriers to entry in the sports rights wholesale market.

In conclusion, as the horizontal overlaps are not substantial, the creation of the JV will not significantly strengthen the position of the parent companies in the pay TV or free TV downstream markets.


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