20 Sep 2017
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SC bars Prasar Bharati from airing shared live sports feed on private cable, DTH

MUMBAI: In a judgment that can have significant implications for pay TV revenues, the Supreme Court has said Prasar Bharati can air the live feed of sporting events of national importance that it gets from private sports broadcasters only on its terrestrial network and own direct-to-home (DTH) platform, Freedish.

Private sports broadcasters consider this as a major victory as they feel that the judgment bars Prasar Bharati from airing the mandatory sharing of sports feed on cable TV networks and pay DTH platforms.

Star India, which had moved the court, will stand to immediately gain as it holds the rights to the ICC Cricket World Cup and the international matches played in India. Other private sports broadcasters will also benefit.

Star India had earlier said that the sharing of live feed with cable operators through Doordarshan had resulted in a subscription loss of Rs 970 crore and a loss of advertising revenue to the extent of Rs 245 crore since 2007.

The value of the BCCI rights will get a boost after this judgment, a media analyst said. With the value of Test matches dropping, the new ruling would act as a positive price support for the BCCI rights, he added.

Star India had paid Rs 3,851 crore for the rights to broadcast BCCI-organised matches between 2012 and 2018.

On Tuesday, the bench of Justice Ranjan Gogoi and Justice Navin Sinha upheld the order passed by Delhi High Court on 4 February 2015, by ruling that live feed received by Prasar Bharati from content rights owners or holders is only for the purpose of re-transmission of the signals on its terrestrial network and own DTH platform and not to private cable operators.

The Delhi HC order in contention had ruled that the live broadcasting signal shared by Star with Prasar Bharati could not be carried in the designated Doordarshan channels under the must-carry obligation.

Section 3 of the Sports Act requires private broadcasters to share the live broadcasting signals of sporting events of national importance with Prasar Bharati for retransmission of the same through its terrestrial and DTH networks.

On the other hand, Section 8 of the CTN Act requires cable operators to mandatorily carry Doordarshan channels on their cable networks.

The genesis of the dispute is that Prasar Bharati carries live sports events under mandatory sharing law on its must-carry channel DD National.

Media rights owners like Star India contend that the broadcast of sporting events of national importance on mandatory carrying channels like DD National cause financial loss to broadcasters as it kills content exclusivity.

Star has also argued that cable operators have no incentive to pay subscription fee for these sporting events as it is available free to them courtesy DD National, which has to be mandatorily carried by all cable and DTH platforms.

The apex court agreed with Star’s contention. “For the aforesaid reasons, all the appeals will have to fail. They are accordingly dismissed. The judgment and order dated 4 February 2015 passed by the High Court is affirmed,” the order stated.

The apex court noted that the legislature has not specified any particular channel under Section 8 which must be mandatorily carried by cable operators, which leaves the task to the central government.

It also stated that the obligation cast on cable operators to transmit DD1 (National) and the transmission of live feed of major sports events of national importance on the said channel by Doordarshan is a matter of mere coincidence rather than a legislative mandate.

Therefore, it added that the central government can denotify DD1 (National) from the notified channels in the notification under Section 8 of the Cable Act.

The bench also agreed with the contention that Section 3 of the Sports Act, 2007 is expropriatory in nature as it curtails or abridges the rights of a content rights owner.

Sharing of revenue between the content rights owner or holder and Prasar Bharati would hardly redeem the situation to take the Sports Act, 2007 out of the category of expropriatory legislation, it added.

Former Attorney General Mukul Rohatgi appeared for the Union of India and Prasar Bharati, Harish Salve, P Chidambaram, Sanjay Hegde, AM Singhvi, Sudhir Chandra and Gopal Jain appeared for Star India, Dr Rajeev Dhavan appeared for Home Cable Network and Sopan Foundation, while Amit Sibal argued on behalf of the BCCI.

According to Abhishek Malhotra, managing partner at Arthe Law, the Supreme Court judgment signals a victory for the sports broadcasters and the contours of the Sports Act, 2007 have been identified to be limited to its original purpose. The Act was, after all, meant for those who could not afford or have access to cable TV.

Malhotra, however, stated that there could be a grey area in that it might allow Doordarshan to air the shared feed on a channel that cable operators are not mandated to carry. Incidentally, two Doordarshan terrestrial channels including DD1 (National) and one regional-language DD channel of the state are mandatorily required to be carried by the cable operators.

“In that case, how does the cable operator be denied of getting to carry the non-mandatory but free-to-air (FTA) channel on his network? We will have to wait for more clarity. The application and implementation of the judgment remains to be seen,” he said.

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