There will be one last fight before the judges. The Supreme Court has admitted the appeal filed by Telefónica and will decide whether the last extension carried out by the competition agency in Spain to the regulatory restrictions on football (due to the purchase of Digital+) is in accordance with the law. The National Court has already given an endorsement to the entity chaired by Cani Fernández and kept the decision intact. The teleco, which has been fined by the latter twice in recent months with up to 11 million in total for failing to comply with these obligations, understands that the decree by which the state of alarm for the coronavirus was developed in 2020 cannot justify the ‘green light’ to this decision after the established deadline. Today these limitations are no longer in effect after they expired in the second quarter of this year.
In July 2020, more than three years ago, the National Commission for Markets and Competition (CNMC) approved in council the extension of three more years of the fiscal regulatory commitments to the operator that owns Movistar, among which were the wholesale sale of premium broadcasting rights such as football (based on a regulated formula). But it did so weeks after the legal term that expired in April of this year had expired. The justification must be found in the state of alarm that was lifted on June 21. Telefónica appealed to the National Court, understanding that it was a null decision. But the magistrates agreed with the body, arguing that the formal procedure began before the expiration of the deadline. “We attend to the moment and the context in which the statement took place to establish its true scope,” they insisted in a sentence advanced by La Información in March.
Telefónica appealed to the Supreme Court. The operator argues that the decision taken by the Commission -in which there were two dissenting votes of directors- violates the decree of state of alarm. It also defends that it violates the Administrative Procedure Law by allowing, on the one hand, that the resolution of the Commission produce effects beyond the term established in it and, on the other, that the extension of its validity after the original term expired, “whether by means of a restoration of the term or giving it effectiveness an undeclared retroactive”, he explains in the order of the High Court.
The magistrates will admit that there is sufficient interest to analyze in the Contentious Chamber whether the Commission can agree to this extension once its initial term expires. He insists that there is no pronouncement from that previous room, so a sentence is necessary for the formation of jurisprudence. Now the whole procedure begins, which could be extended for more than a year, so there would not be a specific position until the second part of 2024, at least one year after those commitments are no longer in force -they met last April 2023 without being renewed because the Digital+ purchase authorization did not contemplate a second extension.
Since that 2020 resolution and until its completion several months ago, Telefónica has forcedly sold not only soccer to the rest of its rivals – only Orange has been buying them, after Vodafone decided not to acquire these assets anymore, understanding that the regulated formula of the CNMC harmed them- but also other premium channels such as Series and Film Premieres. These were some of the commitments imposed to give the green light to the purchase of the majority shareholding of Digital+ in 2015, which placed the operator that owns Movistar in a dominant position in the pay television market.
If the Supreme Court decides to uphold the sentence of the Hearing, there will be no change. If he chooses to cancel it, it would remain to be seen in what situation that period of three years of commitments remains. These declined at the beginning of May. Those obligations no longer exist. What has not yet been decided within the CNMC is whether it really authorizes Telefónica to buy the LaLiga broadcasting rights for five years. The acquisition was made last year -with the ‘remedies’ in force- but subject to the agency giving it the green light, since among those restrictions was the purchase for a maximum period of three years.
What has happened since last March, in which the decision of the National Court was known, has been the imposition of two sanctions that punish non-compliance, in the eyes of the regulator, of those commitments. The first was at the beginning of that month when he demanded a payment of 6 million euros for putting on the table a ‘de facto’ permanence in the old Fusion offers with the inclusion of a mobile device. The second, for 5 million, was approved at the end of July due to the commercial agreement with Dazn which entailed, among other measures, the exclusion of Formula 1 content from its wholesale channel offer for 2021.
the summer of football
This is being the first summer without any regulatory restrictions for Telefónica and its rivals. There have been changes, since several of the film and series channels have left their rivals’ offers -it has no obligation to resell them in the wholesale market-. There have also been innovative commercial proposals that are easier with this new scenario, such as Movistar Plus+, Netflix’s rival for 14 euros for non-customers (with one LaLiga match and another from the Champions League per day). But when it comes to football, everything remains the same. Orange has once again bought 55% of the LaLiga matches that are in its possession, although without the formula regulated by the CNMC – the French teleco came to assure a few weeks ago that the negotiation was “fun” -.
In the commercial field, both one and the other have tried to capture the largest number of soccer customers -it is estimated that there are between 2 and 3 million subscribers to the ‘king sport’ in their fiber, mobile and pay television packages- but without the especially aggressive offers of years past. The discounts proposed are, in the end, very similar. Between 10 and 15 percent discount in prices for the season. But these improvements are made with an obligation: include the acquisition of an electronic device.
