Media Davids vs. Goliath
September 2, 2004
In the United States, the Olympic Games are almost exclusively the domain of private broadcasters, which have deeper pockets than public broadcasters -- who rely on paltry government funding and desperate telephone pledge drives to attract donors. But in Europe, where public broadcasting is funded by hefty and mandatory television licensing fees for all residents, broadcasters like Germany's ARD and ZDF or Britain's BBC have an unmatchable arsenal when it comes to fighting for the rights to the Olympics. It's an advantage that angers private broadcasters, who say they are virtually locked out.
"It's not fair at all," said Jörg Krause, spokesman for the private German sports broadcaster DSF. "The situation is made worse by the fact that ARD is now buying up the rights to all of the 'a' and 'b' category sporting events. They're able to finance this through the licensing fee and selling advertisements like private companies. There's no clear division there." In other words, public broadcasters not only compete for advertising euros with private broadcasters but they also have a guaranteed budget that comes from fees they legally require of all residents of Germany. To put into perspective, public broadcasting fees in German total approximately €7 billion ($8.7 billion) a year compared to the €4 billion in advertising brought in by private broadcasters, for whom that is almost the exclusive line of income.
With their war chest of cash, ARD and ZDF have snapped up the rights to most of the major European sporting events this year -- including the Euro 2004 European soccer championships, the Tour de France, the Olympic Games and the start of the Bundesliga season.
But Krause says prohibitively high Olympic licensing fees make it virtually impossible for Europe's private broadcasters to make a serious bid. Nevertheless, he also concedes private companies would never be able to recover the amount of money spent on the fees. Unlike the US, where private broadcasters enjoy the highest ratings and all the advertising revenues (The Public Broadcasting Service is prohibited from selling commercial advertising), public broadcasters consistently score the highest ratings and command tremendous power over the advertising market, with their only serious private competition coming from RTL, which peddles such fare as Big Brother to viewers.
"They basically buy us out of the market," said Hartmut Schultz of the German Association of Private Broadcasters.
Europeans pay €394 million for Athens
Historically, Olympic broadcasting rights for just about the entire continent have been negotiated by the European Broadcasting Union, an alliance of public broadcasters that is also responsible for the wildly popular Eurovision Song Contest. This year, the organization paid €394 million for the rights to Athens games. EBU's director of legal affairs, Werner Rumphorst, defends the sums paid by public broadcasters for the right to air the Olympics' golden moments.
"We've been getting these attacks from commercial broadcasters for ages," he says. "They claim we have what they call 'double funding,' but the reality is that we have mixed funding. Double implies you have twice as much as you need. Overall, the funding is there to allow public broadcasting to fill its public broadcast remit, which is checked by various independent bodies." Rumphorst noted that many complaints have been filed by private broadcasters against public behemoths, but that all of the cases have been thrown out in Brussels except one. "There is no substance to the claims," he says.
Most of the sports at the Olympics are smaller events, like canoeing or archery, and ultimately draw few viewers. They lack the draw of big ticket sporting events like professional soccer or Formula One racing, whose licenses are largely in the hands of the privates. In other words, according to Rumphorst's argument, the publics take the sports the privates won't touch.
But private broadcasters question whether ARD or ZDF are really fulfilling their public mandate by showing so much sports programming. Public broadcasting, says Schultz, has a mandate to show programs that promote "political and educational" public dialogue -- the kinds of programming that would be unprofitable for private broadcasters. "There is no reason why (broadcasting) a big entertainment program like the Olympics should be paid for by the public," Schultz said.
Damned if they do, damned if they don't?
"We have this festival of small sports," he says, "and when it comes to the Olympics we have acquainted audiences with sportsmen in these sports. Ratings for the Olympics are quite modest and in many cases the commercial broadcasters don't want them. But we've been broadcasting the games from the beginning without interruption. If that were to discontinue, the press would jump on public broadcasters and ask why people should bother paying their license fees."
Besides, he says, the money from the licensing fees is needed to keep the games running. The hundreds of millions in fees don't just go to IOC salaries -- they also go to funding the games themselves, international sports federations and to some of the teams from poorer countries who couldn't compete in the games without the financial aid.
"These sports are only shown on public broadcasting, they're not soccer or Formula One racing -- events we have nothing to do with, since they're in the hands of private broadcasters," he says. He also noted that German public broadcasters have also failed in some of their bids to land major sporting events -- including the 2002 and 2006 World Cup soccer matches.
Fair use?
Public broadcasting goliaths aren't the only hurdle in the way of the privates: They must also navigate the Byzantine media rules enforced by the International Olympic Committee.
The IOC strictly regulates how much coverage television and radio stations that haven't licensed the rights can give to the Olympics. Images or sound from the Olympics can only be broadcast in news programs that are not promoted as Olympic specials and it can't appear more than three times in one day. Nor can the amount of image or sound material included in a news program exceed two minutes. The maximum limit for using sound or images from a single Olympic event is 30 seconds.
"It's not exactly a new thing for us that we can't do much with the Olympics," Krause said. And with public broadcasters airing different events on up to eight different channels in Germany, Krause said he didn't think audiences would even turn to private broadcasters for supplementary coverage. But given the opportunity, he says DSF would give more airtime to Athens.
Note to readers: Though Deutsche Welle is an independent media organization funded by the German government, it is also part of the ARD public broadcasting network.