February 2, 2007 at 13:00 #265
The British Horseracing Board (BHB) is delighted to announce that the Court of Appeal has today completely overturned the High Court judgment obtained by At The Races which had found that BHBÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s business practices in the supply of pre-race data constituted an abuse of a dominant position.
The Court of Appeal found that BHBÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s business practices did not involve excessive or discriminatory pricing, nor did they amount to a refusal to supply and therefore were not abusive.
Commenting on the judgment, BHB Acting Chief Executive Chris Brand said:
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œBHBÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s commercial policy generated some Ãƒâ€šÃ‚Â£40m of net additional income for the sport over five years. Ãƒâ€šÃ‚Â TodayÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s judgment confirms emphatically that our pricing arrangements at the time covered by the judgment were fully justified.
The position we have taken with regard to our commercial policy in the UK, Ireland and other overseas territories has also been completely vindicated.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œIf left unchallenged, the first instance judgment would have had far-reaching implications beyond Racing, not least that organisations in a position similar to BHBÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s would have effectively had their prices regulated by the courts.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œIn taking this appeal, our aim has been to ensure that Racing can exploit its assets appropriately and that it is not hindered in any future efforts to seek new sources of revenue.
Despite the recent welcome extension of the Levy as the sportÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s principal means of funding, Racing must remain committed to exploring all options to improve its financial structure.
<br>February 2, 2007 at 13:14 #27894
What implications does this have for ATR?February 2, 2007 at 13:24 #27895
apparently they’re going to appeal it to the House of Lords. Ãƒâ€šÃ‚Â
otherwise, since its all to do with how much ATR wants to pay the BHB….. Ãƒâ€šÃ‚Â
full judgment here:
witFebruary 2, 2007 at 13:32 #27896
So could this threaten the viability of ATR?February 2, 2007 at 13:40 #27897roryParticipant
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The claim related to the supply to ATR of "pre-race data", information on runners and riders that is necessary to enable bookmakers to take bets on horse races. ATR pays the Press Association ("PA") for the supply of a pre-race data feed for ATR’s service to overseas bookmakers, with the BHB having a separate agreement to supply the data to PA. The BHB demanded that ATR enter into an additional licence with the BHB to pay for database rights in the data.
After the European Court of Justice ruled in November 2004 that the BHB had no database rights in the data, ATR asked the BHB to clarify the basis on which it sought payment. In response, the BHB said that unless ATR agreed to pay licence fees to the BHB, it would instruct PA to terminate its supply of pre-race data to ATR.
ATR then brought proceedings, claiming that the threat by the BHB to prevent PA from supplying pre-race data to ATR constituted an abuse of a dominant position under EU and UK competition laws.
In December 2005 Mr Justice Etherton found in ATRÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s favour, ruling that the BHB had an effective monopoly, that the BHB’s conduct was an illegal refusal to supply ATR; that pre-race data is an "essential facility" controlled by the BHB; that the licence fees proposed by the BHB were excessive and unfair; and that the BHB was discriminating against ATR.
The BHB appealed the findings of abuse to the Court of Appeal. The decision handed down today by the Court of Appeal has allowed the appeal, finding that the BHB had not abused its market dominance.
<br>Matthew Imi, Chief Executive, ATR said: ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œGiven the emphatic nature of the ruling in ATR’s favour back in December 2005 and following successful injunction proceedings before the Vice Chancellor earlier in 2005, we are very surprised and disappointed with the Court of Appeal’s ruling today. We continue to believe that the BHB’s treatment of ATR which triggered legal proceedings was unfair, discriminatory and abusive and, given the clear public interest element in this landmark case, we will be seeking leave to appeal to the House of Lords.ÃƒÂ¢Ã¢â€šÂ¬Ã‚ÂFebruary 2, 2007 at 15:54 #27898
Quote: from Wallace on 1:32 pm on Feb. 2, 2007[br]So could this threaten the viability of ATR?<br>
<br>i’d imagine there are folk on here well-enough informed to answer that question, but probably not at liberty to do so.
i’m not in either category ;)
all i can see is the 2005 filed accounts.
made up to a date now 13 months ago, they do note as a post-balance sheet event that the Court of Appeal had finished hearing the appeal in July 2006 but had reserved its judgment.
the accounts say as to the BHB case:
The directors cannot accurately assess the financial impact of the result….
<br>They note an operating loss in 2005 of GBP 2.5m <br>(or, after crediting back a tax payment, a loss for the year of GBP 1.2m).
The 2.5m compares with an operating loss of GBP 6.8m in 2004.
The 2005 figure is after "exceptional costs in relation to legal proceedings" of GBP 1.815m
Under a para headed Going Concern, the 2005 accounts say:
…the Company had net liabilities of GBP 10.7m at 31 December 2005……the directors have reviewed in detail the current trading position, forecasts and prospects of the company, the funding position from lenders the terms of trade in operation with customers and suppliers…..
…having regard to the cash resources and loan facilities available to the company,…..the directors believe that the company is a going concern…
witFebruary 2, 2007 at 21:13 #27899
I woulld like to see ATR2 fail and RUK to have pictures from all tracks. The racecourses owning the company that owns the rights to the pictures would be a good results for the future of the sport.
The present ATR setup is little more than a multi bookmaker marketing department.
PS And have Sean Boyce as anchorman!!!
(Edited by Wallace at 9:14 pm on Feb. 2, 2007)February 3, 2007 at 05:35 #27900
the judgment in a (large) nutshell:
ATR uses BHB pre-race data on four services:
A. Ãƒâ€šÃ‚Â the ATR Website
B. Ãƒâ€šÃ‚Â the ATR branded satellite cable Ãƒâ€šÃ‚Â television channel (the ATR Channel) ……produced for it by SIS and also transmitted by cable to subscribers, domestic and commercial in the UK and Ireland. Ãƒâ€šÃ‚Â
C The SIS FACTS audio-visual bookmaker service (SIS FACTS) produced and distributed by SIS internationally for bookmakers, including overseas bookmakers, that provide fixed odds betting. It broadcasts races at UK racecourses under an arrangement with ATR.
D Ãƒâ€šÃ‚Â ATR International (ATRi), a branded international satellite television bookmaker service launched Ãƒâ€šÃ‚Â produced by SIS on behalf of ATR and dedicated to supporting Tote pool betting in pari-mutuel betting markets where fixed odds betting is illegal (as in the USA, Holland and Spain). Ãƒâ€šÃ‚Â ATRi comprises pictures of horse races at racecourses covered by ATR (ie 18 Ãƒâ€šÃ‚Â of them) plus some others, on-screen text and a teletext service
…..BHB’s normal charge to broadcasters, as distinct from the supply of pre-race data for bookmakers, is nominal.
In the case of [A] the ATR website and (B) the ATR channel the charge is Ãƒâ€šÃ‚Â£3,600 a year, whereas the proposed charge for [C] Ãƒâ€šÃ‚Â SIS FACTS and [D] ATRi is much higher. <br> <br>ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦PhumelelaÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦supplies overseas bookmakers with data in respect of race courses which have agreements with Racing UK, a direct competitor of ATR. Ãƒâ€šÃ‚Â Ãƒâ€šÃ‚Â Ãƒâ€šÃ‚Â
In mid-July 2004 Phumelela agreed to pay 30% of its net revenue to BHB for the supply of pre-race dataÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦…<br> Ãƒâ€šÃ‚Â <br>ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦..the economic value of a product [is]ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ a different concept from its cost, as it reflects its revenue-earning potential to the person who acquires it. ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦.
for example, ATR [was ready to pay] Ãƒâ€šÃ‚Â£307m ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦.for the media rights to film and broadcast races for 5 years on the 49 old ATR courses, [but] Ãƒâ€šÃ‚Â ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦.Ãƒâ€šÃ‚Â£1.586m for the media rights for 1 year (11 June 2004 to May 2005) on the 18 New ATR Courses.
As in the case of the sale of media rights for facilities and access to film and broadcast sporting events for high sums, the sums paid by ATR for the media rights to the races were not related to the cost to the supplier of making the media rights available: they represented in commercial terms the economic value of the product in question to ATR, as the acquirer of a revenue-earning asset or opportunity for itself and on a re-sale to such end users of the service as the betting offices.
The benefit of the revenue-earning potential for ATR and for the overseas bookmakers, who subscribe to SISFACTS and the ATRi Channel which include the pre-race data, is what gives the pre-race data its economic value.
<br>[BHB is] ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦charging Phumelela 30% of its net revenue as against the 50% demanded from ATRÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦…..[ so] where Phumelela found themselves paying an average of Ãƒâ€šÃ‚Â£361 per fixture, ATR were being asked to pay Ãƒâ€šÃ‚Â£900.
<br>ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦.the fact that BHB had treated Phumelela and other broadcasters differently from and more favourably than ATR, while it establishes literal discrimination, does not by itself establish an abuse in law of BHB’s monopolistic market positionÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦…
<br>ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦in a market such as this not all customers are similarly placed, ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦their own onward markets are significantly differentÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦[so] differential pricing may legitimately reflect the distinct value of the product to each customer.ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦..
ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦The other broadcasters, albeit differently treated, do not compete with ATR in the overseas market.
Nor is comparison with them a like-for-like comparison – for example, their revenue comes principally from advertising breaks and subscriptionsÃƒÂ¢Ã¢â€šÂ¬Ã‚Â¦..
What ATR object to is BHB taking half their profits, especially when Phumelela are supposed to be parting with less than a third of theirs.
What ATR have not established, however, is that the price differential goes beyond falling more heavily on one buyer than on the other ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Å“ as it obviously does – and actually or potentially distorts competition between them.<br><<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
…hence no market abuse.
<br>In terms of immediate monetary impact, the RP reckons:
After the original case, the BHB was forced to hand over Ãƒâ€šÃ‚Â£700,000 in costs. Based on FridayÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s judgement, this sum will have to be repaid, along with probably half as much again in further legal fees.
The question of data payments that ATR has not made since June 2004, which could be in excess of Ãƒâ€šÃ‚Â£500,000, is unresolved. <br><<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
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