This article is written by Aarlin Moncy, from HILSR, School of Law, Jamia Hamdard, pursuing Diploma programme in Advanced Contract Drafting and Negotiation and Dispute Resolution from Lawsikho. This article will give you a brief idea about Broadcasting agreements and the importance of entering into one.
Broadcasting is a process wherein an art, a performance, or an event that has either been recorded or which is currently being recorded gets telecasted to a large and wide audience worldwide through TV signals, radio signals or through the Internet.
We are living in a digital world, where everything has been digitalised and since Covid-19, the entire world has completely shifted to the virtual zone either for work-related purposes or for entertainment purpose.
Have you ever wondered, when you watch a live event, let’s say a Live Cricket match or Live Wrestling, even though you haven’t purchased the tickets for the event, but you’re still able to watch the same event at your comfort in your pyjamas, and still the Sports and Entertainment Industry manages to earn in Millions and sometimes in Billions! But how? Is broadcasting that expensive and easy money-making for these Industries?
In this article, we will discuss everything related to a broadcasting contract in great detail.
What is a broadcasting agreement?
A broadcasting agreement is an agreement entered by two or more parties for the telecast/broadcast of the specified event as per the agreement to reach maximum or a wide audience through different modes of telecast either through live streaming, through TV signals, subscription-based broadcast, and/or via internet signals, or radio signals.
A broadcasting agreement is entered between the event’s host or the content creator or the producer of the event (“Creator”) with the broadcasting agency(s) (“Broadcaster”). The Broadcaster has to telecast the event on the platform(s) as mutually agreed by the Creator and the Broadcaster (“Parties”). The Creator of the event grants a license to the Broadcaster to either have the exclusive rights relating to the broadcasting of the event or non-exclusive rights, as per the said agreement.
The term “broadcast” has been defined under Section 2(dd) of the Copyright Act, 1957 as, communication to the public either via wired or wireless medium and also includes re-broadcast.
In a broadcasting agreement, the Content Creator/the performer or the producer is the sole owner of the rights relating to the Intellectual Property, as it is the Creator’s original work, hence it is his property, moreover a broadcasting agreement doesn’t mean to transfer the ownership of the Intellectual Property from the Content Creator to the Broadcaster. It merely gives the Broadcaster the license to distribute the said content/performance/event with the public at large through its network.
Importance Important/needs of such agreements.
To understand the concept of a broadcasting agreement, we need to first clarify two basic prerequisites, i.e., Why are these agreements/contracts made? And secondly, why is broadcasting is important for this day and age?
As we know, through agreements, parties are bound by rights and duties as mutually agreed by them. To fulfil any purpose, an agreement gives the said purpose legal importance and makes it enforceable at the court of law, if in case an event of default occurs. To secure and protect oneself from fraud, it is very important to enter into an agreement before accepting any commercial or non-commercial deal.
Coming to the second part, as to why broadcasting is an important service is because it is considered to be a public service, and public service is for the greater good, which is considered to be a moral obligation of both the State as well as of an individual, or associations/corporates, etc. Most importantly, through the broadcasting services huge amount of income is generated within the economy as through broadcasting an event, the scope of viewership and audience gets enlarged, which is good for both the sport, the players as well as for the nation as a whole as it gives recognition to both the nation as well as the players get recognized for their efforts.
A huge amount of income is generated through broadcasting, lets take few examples, the FIFA World Cup, ICC World Cup, IPL, WWE, UFC, Davis Cup, The U.S Open, etc are some of the sports for whose broadcasting rights are sold in Millions of Dollars. If we take examples of Movies or TV series instead of sports, in 2015 Netflix acquired the streaming rights of Friends for $100M.
Now if parties are willing to spend a hefty amount of money for acquiring streaming or broadcasting rights, it will be prudent enough to secure the said transaction by entering into an agreement. Hence, the broadcasting agreement is not only a vital part of the transaction but it binds the concerned parties together and makes them legally bound to all the obligations mentioned as per the agreement.
Important clauses and provisions of the agreement
In a broadcasting agreement, few operative clauses are mandatory to be drafted and they are-
- Purpose clause- A purpose clause is drafted to mention the purpose behind the said agreement. The parties have to rightfully mention the exact purpose of the agreement, and the purpose shall not be illegal, otherwise the entire agreement would become void.
- License clause- In this clause, it is to be mentioned that the Creator/Producer or the owner is granting a license to the broadcaster to stream/telecast either live or recorded session of the event on its network(s) and platform(s). Whether the agreement is an exclusive broadcasting agreement or not, shall also be mentioned here. Everything relating to the broadcasting license shall be mentioned in this clause.
- Habendum clause- In this clause, all the rights relating to the property (Intellectual property, in this case) shall be mentioned, if in future there is any confusion relating to the title and ownership of the Intellectual property, then this clause can be a life-saver.
- Representations and Warranties- In this clause, both the parties shall state the fact and shall comply with the stated fact individually, so that in case if anything happens contrary to the said and accepted facts, then the parties shall be responsible individually.
- Rights and Obligations clause- In this clause, all the rights and obligations of both parties shall be mentioned clearly.
- Dispute resolution clause- This clause is very crucial, and needs to be drafted with clarity, as this clause will determine how the parties shall deal with the future disputes that might happen between them. Parties can mention, “Parties hereby mutually agree that all the disputes arising out of this agreement shall be referred to arbitration”, something like this can be mentioned, also if the parties are referring to arbitration as the mode, then the seat, venue, governing law, number of arbitrators, whether opted for ad-hoc or institutional arbitration, these shall be mentioned and covered in the clause.
- Tenure clause- In this clause, the tenure of the entire agreement shall be correctly mentioned, so that no future conflict or dispute arises concerning the tenure of the agreement.
- Force Majeure clause- In case of any unforeseeable circumstance, if any of the parties or party is unable to fulfil its contractual obligation, then such defaults or event of defaults shall not lead to termination of the agreement.
- Promotions and Sponsorships clause- In this clause, the parties shall mention, whether any sponsors for the event and the ways of promotions of the event, shall be mentioned clearly.
- Event of Default clause- In this clause, all the events that lead to default of the obligations as promised by the parties as per the agreement shall be mentioned. At last, such events shall directly lead to the termination of the agreement.
- Termination clause- In this clause, the modes and ways of termination of the agreement shall be mentioned, and anything apart from the modes or ways of termination mentioned in the agreement shall not be considered as termination. All the event of default shall directly result in termination of the agreement, hence the “Event of default clause” shall go hand in hand with this clause.
- Payment and Fees clause- In this clause, the modes of payment and the entire fees charged or to be paid by the broadcaster to the Producer shall be mentioned.
Any law governing the agreement?
A broadcasting agreement shall be governed by multiple laws depending on the place of operation of the said agreement. Few common laws that shall be governing a broadcasting agreement are-
- Intellectual Property law
- Contract law
- Antitrust/Competition law
Implications of not getting into the agreement
If the parties have no written agreement/contract stating that they have successfully entered into a broadcasting agreement, then the same shall not be enforceable as well as it might get very tough to prove whether there was any agreement between the parties or not. In such situations, where parties act negligently and where the consideration is of hefty sum, there is always a high chance of fraud. To secure oneself and the agreement, it is imperative to have a record of the same in a written format, with the signatures of both parties.
An important thing to be noted down here is that, when parties agree to enter into an agreement, the reason why the lawyers or the contract draftsmen drafts a dispute resolution clause, is because although initially at the time of the agreement, the parties mutually agree to each other’s terms but are unable anticipate any future dispute, and a dispute is something which can never be eliminated, the difference of opinions, etc can’t be foreseen, hence, it is important to have a dispute clause, to protect the rights of about the parties, but if there is no written agreement, the complainant shall have to prove at first that there was an agreement between the parties and when the court of law is satisfied with the fact that there was an agreement, then only the court shall consider the latter allegations.
Hence, having a written agreement is a win-win situation to protect the rights of the parties against any mishap or fraud.
Case laws relating to broadcasting agreements
In this matter, the plaintiff entered into a broadcasting agreement with BCCI. Since BCCI granted a license to the plaintiff to broadcast test cricket matches between India and other countries, the plaintiff found out that the defendants without any authorization or license from the owner of the copyright or the plaintiff were transmitting and making available the channel to their clients and the Hon’ble Delhi High Court held that, unauthorized transmission of the TV channel to a selected clientele also leads to commercial use of broadcast and also leads to making available the content to the public. Hence, violates the broadcasting rights or broadcast reproduction rights of the plaintiff.
The Hon’ble Supreme Court of India held in this judgement, that the broadcasting rights of all the sports event that are of national importance must be shared with Prasar Bharti, free of all commercial interest. So, that the entire country can witness the importance of the game, and get inspired by the same, the core element of this judgement was public interest, and where the court is satisfied with the fact, that an issue is directly proportional to the public interest, then the court shall always favour and pass an order or judgement protecting the public interest at large. Hence, in this case, even though the broadcaster entered into a broadcasting agreement, still his rights weren’t protected, since, it was a matter of the public at large.
By now, hopefully, you must have understood the entire concept of a broadcasting agreement, and why parties do enter into such agreements. The importance and the implications, if there is no such agreement between the concerned parties. The basic idea behind an agreement is to mention everything at once during the commenced or formation of the agreement. When parties enter into an agreement, then they mutually agree to all the terms and conditions of the said agreement. Also, it is the best way to secure a deal and transaction, particularly if the transaction is of a hefty amount.
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