EC may fine Telefonica, Sogecable

PPV soccer b'cast rights under investigation in Spain

BRUSSELS — The European Commission has warned Spain’s Telefonica Media and Sogecable that they face fines over their agreement to pool broadcasting rights to soccer matches.

The move is highly unusual. When two companies notify the Commission of a deal, they usually enjoy immunity from fines until the Commission has investigated the agreement.

Lobbied by other Spanish pay TV operators, the European Commission announced Wednesday that it was formally investigating the joint-ownership of Spanish pay-per-view soccer transmissions exercised by Audiovisual Sport (AS). AS is controlled in turn by Sogecable and Telefonica Media, which own Canal Satelite Digital and Via Digital, respectively.

Breach of rules

Competition Commissioner Mario Monti believes the agreement to pool broadcasting rights for Spanish league and cup soccer until 2003 is in breach of EU competition rules on price-fixing and on the restriction of competition, and is concerned that the agreement could have a damaging impact on the Spanish pay TV market.

Soccer has a crucial role in pay TV revenues in Europe, and Telefonica Media and Sogecable are the two main players in the Spanish market.

One scenario would see CSD and Via being forced to open up these rights in the short term to other pay TV operators.

The two companies have four weeks in which to reply to Monti’s letter, after which the Commission will decide whether to withdraw their immunity from fines of up to 10% of their sales.

(Emiliano De Pablos in Madrid contributed to this report.)

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