Apex Court interprets applicability of Sector 3 of the Sports Act, 2007 #indianlaws

Section 3(1), mandates sharing of live broadcasting signals with Prasar Bharati has to be ‘without its advertisements’. Exception is, however, made in sub-section (2) of Section 3 which enables the broadcasting service provider to even share the contents along with advertisements, but subject to the condition that there has to be a sharing of revenue in the proportion prescribed in sub-section (2) of Section 3. When live broadcasting signal is shared containing advertisements, those advertisements have much larger viewership because of its telecast/broadcast on Prasar Bharati. The benefit of advertisement in such a case would accrue to those who have booked the advertisements and the service provider, in such an eventuality would definitely be in a position to charge much more from the advertisers. The rates of advertisement go up when circulation thereof is enhanced. 

Supreme Court in the instant matter had before it the issue regarding the scope of obligations of a Television Broadcasting Organisation under the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 ( “Sports Act”).

Under Section 3 of the Sports Act, a Television Broadcasting Organisation is prohibited from carrying the live television broadcast of a sporting event of national importance on cable or Direct-to-Home (DTH) networks in India, unless it simultaneously shares the live broadcasting signals, without its advertisements, with the Prasar Bharati (Respondent No.1) to enable it to retransmit the same on its terrestrial and DTH network.

Appellant shared the live broadcast signals with Prasar Bharati. Appellant, as a television broadcaster, is allowed to insert advertisements on its avenue and recoup its advertisements during a break in live play at various points during broadcast, such as, during breaks between overs in a cricket match, at the fall of a wicket, during drink breaks etc. These advertisements are not included while sharing the live broadcasting signals with Prasar Bharati.

While there was no issue on the above two areas, the dispute was in respect of the contents shared with Prasar Bharati which, at times, include some kind of advertisements. According to the Appellant, the broadcast signal of a sporting event provided by an event organiser, known as the “world feed” (as the same feed is provided to all broadcasters the world over), includes the broadcast of the live play of the event as it happens on the field as also certain “features” which enhance a view’s experience, such a Hawk-eye, ball delivery speed reference, umpire naming graphics, player statistics, score cards, match summary graphics, replay graphics etc. These features are inserted at the site by or at the instance of the event organiser. Such features invariably contain logos of the event sponsors known as “On-Screen Credits” in industry parlance. These “On-Screen Credits” are, however, included while sharing the live broadcasting signals with Prasar Bharati. Prasar Bharati has taken exception to the aforesaid inclusion treating the same as “advertisements” and, thus, turning it as violative of Section 3(1) of the Sports Act.

Appellant contended that in terms of Section 3(1) of the Sports Act, as television Broadcaster, its obligation was limited to sharing of the world feed which it receives from the event organizer/owner on as as-is-where-is basis without advertisements of the television broadcaster, and it was not obliged to remove any On-Screen Credits inserted by the event organizer. Appellant contested the stand of Prasar Bharati that it is the duty of the Appellant to ensure that the sponsor logos/On-Screen Credits present on the world feed, which is created by or at the instance of the organizer of the event, have to also be removed by the Appellant.

High Court decided in favour of the Prasar Bharati, and the same decision came up for challenge before the Apex Court.

Court in the present matter restricted itself to question of limited right for telecasting particular cricket matches for particular hours of the day and for a particular period.

The Court observed that vires of the provisions of Section 3 of the Sports Act have not been questioned but only its interpretation has to be placed, keeping in view the provisions of Rule 5 of the Rules applicable.

It was observed as common case of the parties that the “world feeds” which the Appellant shares with Prasar Bharati is covered by the definition of ‘broadcasting’ under Section 2(b) of the Act and in that sense the Appellant provides broadcasting network service as defined in Section 2(d) of the Act. Further, the ‘world feed’ would amount to ‘content’ under Section 2(h) of the Act. It is these contents which are to be mandatorily shared by the Appellant with Prasar Bharati. However, at the same time such contents have to be ‘without its advertisements’.

The question thus to be determined first was whether the logos of the advertisers contained in the ‘world feed’ shared by the Appellant with Prasar Bharati amounts to ‘advertisement’. It was not denied by the Appellant that these logos are of the event sponsors, known as ‘On-Screen Credits’ in industry parlance. The Appellant has itself shown the photographs thereof. Such logos or On-Screen Credits may appear at the time of featuring replays like ball delivery speed and when a player gets out either when he is bowled, run out or caught or they are shown while depicting player statistics, scoreboard, match summary, graphs, etc. Nonetheless, these are the advertisements the sponsors like Pepsi, LG, Fly Emirates, Reliance, etc. These sponsors have entered into arrangement for showing their logo on the occasions referred to above. These sponsors pay for such On-Screen Credits. Insofar as such sponsors are concerned, their motive in giving these logos to be shown on Television is to advertise their company names for commercial motives in mind. These are, thus, commercials of the sponsors which would clearly be treated as not only advertisements but commercial advertisements.

Section 3 of the Sports Act does not make any distinction between the aforesaid two kinds of advertisements. What is prescribed is that sharing of the live broadcasting signal has to be without advertisements.

The obligation to share such sports broadcasting signals is upon the following persons: (i) content rights owner; (ii) content holder; and (iii) television or radio broadcasting service provider. Any of these above categories of persons are not allowed to carry a live television broadcast on:

(i) any cable or direct-to-home network;

(ii) radio commentary broadcast in India,

If such television broadcast or radio commentary broadcast happens to be of sporting events which is of national importance unless such content rights owner or content holder or broadcasting service provider simultaneously shares the live broadcasting signals with Prasar Bharati to enable Prasar Bharati to re-transmit the same on its terrestrial networks and DTH networks in such manner and on such terms and conditions as may be specified.

The guidance for laying down the terms and conditions that can be specified on which sharing of the broadcasting signals has to take place with Prasar Bharati, is mentioned in sub-section (2) of Section 3, which specifically mentions that such terms and conditions shall also provide that advertisement revenue sharing between the content rights owner or holder and Prasar Bharati shall be in the ratio of 75:25 in the case of television coverage; and 50:50 in the case of radio coverage. Section 4 of the Sports Act, 2007 provides for penalties in case of any violations of the terms and conditions as may be specified under Section 3 subject to the condition that amount of a pecuniary penalty shall not exceed ₹1 crore.

From the Preamble of Sports Act, it is clear that purpose is to provide access to the largest number of listeners and viewers, on a free to air basis, of sporting events of national importance. This task is given to Prasar Bharati. Notwithstanding more popularity which the private channels have gained over a period of time, coverage of Prasar Bharati is far more reaching insofar as Indian population is concerned as it reaches almost every nook and corner of the country. Further the radio as well as television broadcasting of Prasar Bharat is free of cost. It is for this reason that the law in the form of Sports Act is enacted in order to ensure that such sporting events of national importance are made available to every citizen of this country, irrespective of his/her financial conditions.

Section 3, thus, aims to achieve two purposes:

(a) to provide access to largest number of listeners and viewers on a free to air basis. The principle of purposive interpretation, in this context, meant that Prasar Bharati was supposed to telecast these matches for the benefit of general masses spread through out India, who otherwise do not receive signals of private channels like the appellant or are not having financial capacity to pay for these channels. Thus, it was a larger public interest which was sought to be served and noble objective was kept in mind while enacting the statute;

(b) insofar as income that is generated from advertisements is concerned, which are shown on television or broadcasted on radio, the revenue thereof is to be shared between the Broadcaster and Prasar Bharati. The purpose is obvious. It is the broadcasting service provider who is supposed to share the live broadcasting signal with Prasar Bharati, which has the arrangements with the advertisers and, thus, takes money from those who book their advertisements to be broadcasted on television or radio. However, when the signals are shared with Prasar Bharati enabling it to simultaneously retransmit the same on its terrestrial networks or DTH networks, the viewership/ audience gets multiplied as the reach is to much larger section of citizenry through Prasar Bharati.

Therefore, Section 3(1), in the first instance, mandates that the sharing of live broadcasting signals with Prasar Bharati has to be ‘without its advertisements’. Exception is, however, made in sub-section (2) of Section 3 which enables the broadcasting service provider to even share the contents along with advertisements, but subject to the condition that there has to be a sharing of revenue in the proportion prescribed in sub-section (2) of Section 3. When live broadcasting signal is shared containing advertisements, those advertisements have much larger viewership because of its telecast/broadcast on Prasar Bharati. The benefit of advertisement in such a case would accrue to those who have booked the advertisements and the service provider, in such an eventuality would definitely be in a position to charge much more from the advertisers. The rates of advertisement go up when circulation thereof is enhanced.

Appellants appeal was accordingly dismissed.

[Star Sports India Private Ltd. vs. Prasar Bharati & Ors.]

SC, 27.05.2016

Civil Appeal No. 5252 of 2016