Broadcasting football rights in Brazil: The case of globo and "club of 13" in the antitrust perspective

Abstract

In 2010, the Brazilian Antitrust Authority -CADE- concluded an agreeement with Globo and the "Club of 13" on a three-year deal for the exclusive broadcasting rights to all Brazilian Football League (BFL) games spanning the five principal media platforms: free-to-air TV, pay TV, Pay per View, Internet and Mobile. The deal eliminates competition in broadcasting of Brazilian League games (primarily other networks, including Record, SBT, ESPN, etc.), reducing "competition in the market." However, it is plausible to assume that exclusivity can bring efficiencies to the market by ensuring a return on investments. In addition, the sale of broadcasting rights accounts for nearly 40% of the revenues of Brazilian clubs. Banning exclusivity will likely reduce revenues and dampen sector efficiency. However, the contract included a preference clause for Globo that adversely affected "competition for the market." Globo abandoned the preference clause under the agreement. Another important provision of the agreement was the requirement that the Club of 13 auction the five media platforms separately. This article examines the economic rationale of the agreement and provides a brief analysis of the main lessons arising from the fragmentation of negotiations in 2011.