It causes fights, euphoria, tears and heart-attacks, and billions of addicts cannot get enough. It’s football, and it’s huge business. The beautiful game has today burgeoned into a subscription television bonanza generating billions in rights for the top European football leagues and their privileged clubs. However, the unexpected victory in September of a free match-streaming Israeli website over the behemoth that is the English Premier League has football bosses and broadcasters worried and other concerned European leagues looking to England for an answer.

The case was a significant one for several reasons. The Premier League is a regular target for illicit streaming because of its global popularity – with broadcasting rights worth a total of £2.7bn (€3bn) being sold to more than 200 countries, making it the world’s favourite league. However, the internet challenge is one also faced by the likes of Spain’s La Liga, Italy’s Serie A and the German Bundesliga, all of whom enjoy substantial funding from pay-TV subscribers. The Premier League has regularly faced the threat from the internet and in 2008 won injunctions in London’s High Court against three websites. In a statement after those victories, it said: “The Premier League hopes that those who own, run and use such sites are now aware that the streaming of Premier League football infringes the Premier League’s copyright, and is therefore illegal.”

However, the tables were turned 18 months later in Tel Aviv’s District Court, when Judge Michal Agmon-Gonen upheld a defence by livefooty.org’s attorney, Yoram Lichtenstein, that there was no infringement of broadcasting rights or copyright under Israeli law. Lichtenstein says: “The court accepted my plea that there was no breach of copyright at all because it was not copying – as the files were never copied to the server – and it was not broadcasting because the court decided that streaming on the internet was not broadcasting in Israel.” Agmon-Gonen also felt that football had a social purpose and that matches did not have the same artistic value as areas normally covered by copyright, such as film, literature and music. “The public’s main interest is in information, not the angle of the photography,” she wrote in the judgment, according to Israeli media. “In the live broadcast of a sporting event, viewers are interested primarily in the real-time result – who did or did not make a goal for the game.”

For Lichtenstein, the judgment means leagues and broadcasters will now have to adapt their business models to the internet – even if his case is ultimately overturned by the Premier League’s planned appeal to Israel’s Supreme Court. “Information is unstoppable... one way or another it belongs to all of us,” he says. “This judgment is a very brave decision and even if something happens in the Supreme Court, I think the end is nigh. We know how it will end, it just takes time and a lot of effort. Even if my client had been stopped, just look at ‘free football’ on Google, there are hundreds, thousands of other sites like that.”

It’s a fair point. In sport, as in music, the array of illicit websites and content sharing represents a challenge to those seeking to defend intellectual property (IP) rights. However, the problem for football is not the two opposing sides but the absence of a referee. Mark Harding, director of Digital Intellectual Property at KPMG, says: “We are moving from being people who sit down with a television schedule in front of them and watch TV after dinner to people who watch television on demand. We’re evolving and I don’t think the IP legislation is evolving fast enough... [especially] if you add into the mix that when you use the internet you lose jurisdiction and the power to enforce things.” Harding sees the Israeli case as part of a trend reflected in other more high-profile IP rights litigation such as Swedish music site Pirate- Bay and Viacom’s billion-dollar video case against Google’s YouTube. “What we’re moving towards is a whole range of lawsuits that seem to be going in the same direction, but we don’t seem to have a unified protocol as to how to sort it out,” he said. If Harding points the finger at the regulatory environment, he also feels that at times, some of the blame has to lie with rights holders themselves. “I’m sympathetic with the content owners,” he says, but adds: “The content industry has not innovated quickly enough.”

In many sectors, he believes things are now changing and that innovative business models are coming through. Harding points to one example in Nokia’s “Comes with Music” offering, where unlimited access via mobile phone and laptop to a vast music library is provided either as part of a phone’s monthly rental or in the price of the handset: “We’re moving to the realisation that somewhere there needs to be more business models.”

Harding is not alone in believing that new models could be an answer to the conflict over content and copyright, though some bristle at what smacks of surrendering to pirates. Tony Ballard, head of the broadcasting group at London lawyers Harbottle & Lewis, argues that the legal framework is not in such bad shape after all, and certainly not in Europe. Since 2003, content owners have been protected by a catch-all phrase that any unauthorised “communication with the public” is a breach of copyright. “If the European rule had applied in Israel, the decision should have gone a different way,” Ballard says. “With the technology- neutral formulation of the infringing act – which is ‘communication to the public’ – it doesn’t matter a toss whether it’s broadcasting, cable, internet, Bluetooth, or whatever.” However, Ballard recognises that, if servers are located beyond the reach of European legislation, business may require a Plan B.

“One solution is to have a new business model where the material is available in competition, in effect, with the pirates; so the user has access to a legitimate source and is more likely to access that than go to the pirates,” he concedes. “It may well be that the lesson which the music industry has had to learn is going to have to be learned by every industry serially.” Getting money from internet service providers, rather than users, for example, might be one avenue to explore for sports content – but there is no avoiding a sense of failure in rooting out abuse of copyright, which Ballard is the first to recognise. “I deplore the fact that no legal solution has been found to remedy widespread infringement of activities,” he says. “For my part, I’d rather see a well-regulated internet than abandoning the field, and having to go offand find business models that are new, novel and exciting but which are compromises with unwelcome facts – and the unwelcome fact is that we haven’t figured out nationally or internationally how properly to apply laws to the internet.”

Not surprisingly, the Premier League’s opinion is much closer to Ballard’s latter view: that battle with the pirates must be joined, and that this is no time to be completely rebuilding a business model from the ground up. Though it had not yet seen Judge Agmon-Gonen’s detailed verdict, the Premier League’s spokesman Dan Johnson describes it as a “perverse judgment” and disputes any difference between streaming and broadcasting. More intriguing, though, is the League’s belief that it’s the business model radicals, rather than the pro-enforcement lobby, who are out of touch with what’s happening with the internet.

Pointing to Rupert Murdoch’s announcement in August that he will begin charging for content on his newspapers’ websites, Johnson sees the Premier League as already being in the right place at the right time. “I don’t think that the basic premise of being able to monetise your content will change – and I think more people are moving towards that being the only model in terms of driving revenue for your content,” Johnson says. “You’ve only to look at the stance that News Corp has taken, because an advertising-based model simply does not work in a modern, fragmented media world.”

As for piracy, Johnson sees the problem being tackled by a combination of evolution and action. Israel aside, many of today’s IP problems involve emerging economies. In time, these economies will reach maturity and so will the baggage that goes with that maturity, including IP protection. It may be absent today, but local content owners will surely want a mechanism for defending their assets tomorrow. “We’re in constant discussions with various levels of government at national and European level, and beyond, and the general understanding is that protecting content providers is the way forward,” Johnson says. “I think as other economies develop and have their own content providers, and their own content to monetise, that will become the case.”

The Premier League knows that the battle to defend its content is far from over. However, it believes that with the creative industries enjoying political support both at home – thanks to their growing weight in Britain’s economy – and further afield there is every chance of effective global action being taken. As Johnson puts it: “If your own government is taking it seriously, and if the European-level of government is taking it seriously, that’s a fantastic start in terms of building an international consensus.” The Premier League may indeed have suffered a setback in Tel Aviv, but this game is clearly not over yet.

Key: *Sponsorship and other commercial revenue combined.
Notes: Matchday revenue is largely derived from gate receipts (including season tickets and memberships). Broadcast revenue includes revenue from television and radio, from both domestic and international competitions. Sponsorship revenue is mainly derived from brand/name placing on team shirts and around stadia. Other commercial revenues include conferencing, catering and merchandising. For the Premier League and La Liga, commercial revenue is not disaggregated into ‘sponsorship’ and ‘other’. La Liga’s revenue breakdown has been estimated. The revenue figures for Italy’s Serie A clubs have been adjusted to aid comparability between European leagues. The gross revenue figure for each year (2007/08: €1,562m) has been adjusted to remove the estimated amount of pooled broadcast and matchday revenues, that are received by clubs and recognised as revenue, in addition to the clubs’ full recognition of their own broadcast and matchday revenues. Source: DFL; Lega Calcio; LFP (France); Deloitte analysis.