UK: Discovery's Olympic Games Bid

1. What are the terms of the agreement between the International Olympic Committee (IOC) and Discovery?

From what we can glean from the IOC's announcement on June 29 2015, the IOC has entered into an agreement with Discovery Communications, a US based global media company and the parent company of Eurosport. The €1.3bn deal grants Discovery the exclusive broadcast rights in Europe (excluding the Russian Federation) to the four Olympic Games events taking place during 2018-2024. However in France and the UK the rights only apply during 2022-2024 as the rights for 2018-2020 have already been awarded. The Discovery deal includes rights across all platforms including free-to-air television, subscription/pay-TV television, internet and mobile.

2. What is the legal framework around the distribution of broadcast rights for the Olympic Games? Is Discovery under any obligation to sublet the rights to other broadcasters or could it retain sole rights to show the Olympics?

Prior to this landmark agreement the European broadcast rights to the summer and winter Olympics have allocated on a country by country basis pursuant to an umbrella agreement entered into between the IOC and the European Broadcasting Union (EBU) the body which represents public service broadcasters in European and which of course includes the BBC.

Pursuant to the Audio Visual Media Services Directive 2010 (which replaced the Television Without Frontiers Directive 1989) EU Member States are required to ensure that important sporting and cultural events are preserved for the largest audiences. In the UK this requirement was reflected in The Broadcasting Act 1996 which introduced the concept of 'Listed Events' – the "crown jewels" sporting events, as specified by the Secretary of State and regulated by Ofcom in its Code on Listed Events. The Olympics are listed as a "Category A" event, together with the Fifa World Cup, Wimbledon Championships, FA Cup Final and so on, which means that they cannot be broadcast live on an exclusive basis without Ofcom's prior consent.

Before granting such consent Ofcom must be satisfied that certain criteria concerning the acquisition of the rights and the provision of the broadcast service are met. Where the proposed broadcaster is not one of the UK's public service broadcasters (The BBC, ITV, Channel 4 or Five, each of which is available free to air on all the main broadcast platforms in the UK) Ofcom must have regard to the steps the broadcaster proposes to take to ensure that the event is transmitted on free television to ensure that a substantial proportion of the population is not deprived of the possibility of following the event. Usually this means some form of sub-licence to one of the PSBs.

In order to meet IOC sensitivities and the various local Listed Events requirements, Discovery has committed to ensuring that a minimum of 200 hours of the Olympic Games and 100 hours of the Olympic Winter Games are broadcast on free-to-air television. Since Discovery currently does not have a free-to-air channel in the UK with the coverage of any of the PSB Channels, it will need to sub-license coverage to one of the PSBs in order to have any prospect of obtaining Ofcom approval.

3. What has been the reaction from the BBC?

The Olympic Games remain "a priority" according to the BBC, who have broadcast them continuously since 1960 and invariably enjoyed huge audiences. According to the BBC more than 90% of the UK population watched the BBC’s coverage of London 2012 at one time or another and the Olympic Games and it remains one of the most popular free-to-air, sporting events for UK viewers.

The BBC has pointed out that it has acquired other sports rights via sub-licensing deals with either agencies or broadcasters in the past. The BBC has said it will be seeking further discussions with Discovery about the 2022 and 2024 Olympic Games "in due course".

4. Could the pan-European deal be challenged?

Almost certainly not (on competition grounds at least) unless possibly it also granted Discovery exclusive options to acquire future Games thereby closing out competitors.

5. With the next three Games set to be on the BBC, what will be the key features of any rights negotiations between Discovery and the BBC? What are your predictions?

Negotiations are likely to centre on the extent and the nature of the coverage that Discovery is willing to sub-license to the BBC. The negotiations will also be affected by Ofcom's position as their approval to any eventual deal is crucial. Discovery has said that it will provide a minimum of 200 hours for free-to-air television. Significant as this may sound, it pales into insignificance by reference to the estimated 2,500 hours of coverage the BBC broadcast during the 2012 Olympics. Secondly, quantity is one thing, but what about quality – which events and which stages of those events?

Furthermore, apart from being the only UK rights holder to the Olympics to date, the BBC has also filmed and produced the Games – a massive logistical undertaking requiring very high levels of skill and experience, not to mention resources. Quite how UK coverage of the 2022 and 2024 Games could be produced without the BBC's involvement is, at this distance at least, hard to imagine. The BBC has worked hard to market itself as the British 'home of the Olympics' and it will therefore be keen to ensure it still has a meaningful part to play in the future. The vast majority of UK viewers will be wishing likewise.

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