For Johan Eliasch, that doesn’t seem to exist: legal slaps in the face, no matter how resounding. The 37th Civil Chamber of the Munich I Regional Court has just served the World Ski and Snowboard Association Fis and its president such a wad by granting an application for an interim injunction from the German Ski Association (DSV). And what does Eliasch’s F sharp do? She classifies the verdict as “completely wrong” and the court’s conduct as “unprofessional”. Who cares about the expertise of the judge, a recognized expert in antitrust law, when the chairman, Prof. Dr. jur. Eliash delivers his judgment? In the name of the snowflake?
Such self-confidence probably comes for free with the rumored billionaire status, and if you move in certain British aristocratic circles. On the surface, Eliasch appears unimpressed by the fact that his core project, the central allocation of media rights for all FIS competitions, has still not been implemented even after two years full of tough debates. On the other hand, it sounds fundamental when a Bavarian regional court rules that the “bundling of international advertising and media rights for FIS World Cup events is contrary to antitrust law”. Or?
In essence – the court emphasized this again on Wednesday – the decision only affects the parties to the dispute, i.e. the Fis and the DSV. The latter, like the other national associations, has so far marketed the media and marketing rights to all FIS ski world cups in its own country, from the competitions of the Four Hills Tournament to the Kandahar Alpine classic – through intermediaries such as the Infront agency. The Fis originally wanted to force them out, merge the rights under their umbrella, and generate more profits. When the push out didn’t work, the Fis made a central agreement with Infront on. However, the respective national associations of the FIs also have to come to an agreement – which they did not do until recently. And it was stipulated in the Fis international competition rules until the end that media rights were originally tied to the national associations. A problem for a world association that wants to have everything under its roof.
These rules were then “changed almost by force” at a meeting of the Fis Council at the end of April. This is what Stefan Schwarzbach, board member of the DSV, postulated publicly shortly afterwards (Eliasch claims that everything was democratic). The national associations certainly did not want to agree to the deal with Infront and Fis, on the contrary. They saw themselves robbed of their “original rights ownership”. So far, the DSV and the Austrian Ski Association have filed a lawsuit against it – and at least the DSV has now been proven right on one central point.
According to the Munich Chamber, the FIS structured its advertising and media rights in its decision at the end of April in such a way that the “original rights to market the events only remained with the individual hosting members, provided they would conclude a contract with the FIS”. This means there is “in fact a compulsion to conclude such an agreement with the FIS and a hindrance to competition”. Spun further: The DSV can no longer have a say in its own rights.
In its response, the Fis acted as if the ruling – which will be appealed – had no impact on the centralization process as a whole, since other national associations were not affected anyway. It’s just stupid that the ÖSV is also taking legal action against the Fis in Vienna in the same matter. And the Munich Chamber states in its 47-page judgment that the planned bundling of media rights “in its specific form represented an intended restriction of competition that is inadmissible under European antitrust law.”
Such a saying is usually very important in antitrust law, even internationally. Why shouldn’t national associations from Andorra to Norway come up with the idea of making representations to their courts?
Stefan Schwarzbach said in the SZ interview that he felt a “signal effect” shortly after the announcement: “If I just think about the reactions that I have received from a large number of national associations in the past few hours, it is clear that that this verdict was awaited with a certain amount of excitement.” Loosely translated: Other national associations are now likely to at least insist to the Fis that they be recognized as co-owners of the media rights again.
Will the Munich verdict still prove to be a boomerang?
That is the central hope of the national ski associations: that with this legal tailwind it will be easier to sail into negotiations with Eliasch’s world association. “We have repeatedly emphasized: We are ready to bring this centralization across the finish line together – if the framework conditions are right,” says Schwarzbach. In other words: when the rights are formally transferred to the national associations again and they are allowed to have a say in centralization. The Fis had apparently recently promised the former in particular, but things didn’t get that far at a council meeting. Those involved have so far remained silent on the details.
Schwarzbach emphasizes that the income from the rights transactions is the lifeline of the associations, with which they also finance youth work, promote less popular sports, and thus prepare the stage that a world association can market centrally. And you have to have a say in business because central marketing has a different impact on every association. If, for example, the Fis decides to allow winter sports to be shown on pay TV in the future, this could bring the associations more money – but at the same time cost sponsors because their logos on pay TV reach fewer viewers.
And what if the national associations’ wish soon became reality – central marketing on their terms? Then Munich antitrust law expert Mark E. Orth still sees a possible boomerang that could rush towards them. He reads the Munich ruling in such a way that the court not only considers the plans regarding the DSV to be antitrust law – but also fundamentally any bundling of media rights in the World Cup.
“An agreement that restricts competition is prohibited,” says Orth, “and this is prohibited because the opposing side in the market is hindered.” Because competition no longer works if there is only one provider. And Orth sees the problem as particularly exacerbated in the FIS plans, since those involved act through a single sales organization, the Infront-Fis construct.
Orth believes that the Fis could possibly get around this illegal cartel – if, for example, it concluded contracts directly with the organizers of the World Cup venues and bypassed the national associations. Then bundling would be off the table. But would all World Cup locations take part?
Either way: Many different legal opinions will soon collide.
