This article has been written by Charu Atrey Course, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.
Broadcasting Agreement is a deal between the broadcaster and the originator, agency, client. In such an agreement agency or client offers the distribution rights to the broadcaster to broadcast the particular show or sports event or leagues.
The idea of broadcasting has evolved ever since the year 1910, the year of first radio broadcast, but now the broadcast has a broader aspect and is not just limited to radio but has also involved the small screen and internet broadcasts. The content of which is not just general entertainment but comprises the general awareness, news and sports within it.
Nowadays, with the advancement in technology the broadcasts have better access by the general public as compared to the past due to which the issues may occur such as infringing the content and IPR associated with it. So to secure the rights of the agency or client as well as the broadcaster the Broadcasting contract has become the essential element of the business industry.
Broadcasting forms the part of the Freedom of Speech and Expression mentioned under the Fundamental Rights, Article 19 of the Indian Constitution. Every Indian citizen has the Freedom of Speech and Expression via Fundamental Rights. Under which it is defined that the citizens are free to express their views or ideas via any means such as paintings, dancing, drama, books, movies, articles, songs and several other means. To express such views there are several platforms available such as radio, television etc. There is no ultimate freedom defined under the Indian Constitution.
This Freedom of Speech and Expression is regulated by several other acts such as Television Networks Regulations Act, 1995, First Press regulations, Indian Press act, Press and Registration of Books Act. And the regulation of such an act is done by several organizations such as IBF (Indian Broadcasting Federation), BCCC (Broadcasting content complaint council), Ministry of Information and Broadcasting. It is Important to regulate content broadcasting as to prevent the promotion of any such act or ideas that can be considered as against the public interest or that can create distress in the nation or can go against nations security.
For Example: In the attack of 26/11 the Indian media broadcasted the attack live on the television, which eventually resulted in the failed rescue operations of the army. All the measures taken by the force to rescue were in vain as the live broadcast eventually helped the anti-national entities to know the further rescue plan and exact locations of the officials in the Hotel Taj and Hotel Oberoi.
Such broadcasts were later banned as it causes a threat to the security of the nation and puts the question mark on the efficiency of the higher officials.
What is a Broadcasting Agreement?
Broadcasting Agreement permits to broadcast of an event or sports-related events. Broadcasting agreements are the most required agreements in the sports industries. The sports team approves to broadcast the game or league and in return, the players of the team are paid the consideration for the broadcast.
Let us now discuss this with the help of an example:
A pro Kabaddi league is organized by the sports ministry of India. Though the game is around in India for so many years, it is still not that popular. The game is about to be lost when the ministry takes such actions. It is essential to broadcast the game live to spread the awareness of the existence of such a game or else it will be lost as well as to generate revenue. To make the reach of the game wide it is important that it is broadcasted in many places together. For such a broadcast the ministry will pay the sum of the amount to the broadcaster to use his facilities. This is one of the situations where the broadcasting agreement proves to be an essential part of the transaction.
Essentials of the agreement
As you have understood this that the agreement should be bilateral and not unilateral. It should focus on the rights of the creator, player or artist as much as it focuses on the broadcaster. A competent Broadcasting Agreement is a combination of various essential variants that we should keep in mind while drafting the Broadcasting Agreement. Let’s discuss the essential variants of the Broadcasting Agreement:
- Title: – The title can be chosen by you on the basis of what the agreement is all about. You can choose any title that can be easily understandable by other people.
For example: – Syndicate Loan Agreement, the name clearly defines what will be the agreement defined further in the context.
- Defining Parties: The first and foremost clause of the Broadcasting Agreement is the clause to define both the Parties. It is important to define that if the parties entering into the agreement are legal entities or registered under any laws and also mention its authorized representatives if any.
- Recitals: Here it is important to define why this agreement is formed and the reasons why the parties enter into such an agreement. The recitals are the essential part of the agreement which clearly defines the situations of the parties before entering into the agreement. It usually starts with “Where As” and then you can define the background of the following agreement.
- Purpose: The Purpose clause is the operative clause of the Agreement under which you can state that-
- Why does the parties require such an agreement and what kind of transaction is being conducted by the parties vide this agreement.
- What kind of facilities are being provided by the broadcaster and what remunerations and considerations are being paid by the client or the agency?
- What will be the revenue sharing relationship between both the parties?
- How the process of revenue sharing will be conducted between both the Parties?
- Payment and billing: Important points to keep in mind while drafting this clause are:-
- How clients will be charged for the usage of the services of the Broadcaster.
- From what date invoices will be generated and to whom it will be referred to.
- The amount should be clearly mentioned how much the broadcaster will charge as per broadcast.
- If any interest rate will be charged in case of the default in payment.
- From what date the due date will be calculated.
- What will happen to the agreement in case of the due payment or any default?
- Termination: It is one of the most important operative clauses in an agreement. Under this you can define the reasons that can lead to the termination of the following agreement. It is important to mention in detail what all are the reasons and acts of both the parties that can lead to such a situation where this agreement stands terminated. Any discrepancy in defining the reasons for termination in future it can become the cause of dispute between the parties.
- Covenants and Duties: Operative clauses are so important for effective working of an agreement. Covenants and duties define the obligations of both the parties and it is abiding on both as well. That no party will be involved in such a representation which is against the public interest.
- Representation and warranties: Representations and warranties are the clause where it is defined that the parties have entered into such an agreement with their own capacity. That no misrepresentation of any information provided by any party under this agreement is
- Indemnification: The clause defines that to what extent does the indemnification will be applicable. When one party breaches any part of the agreement and the other party has to incur the losses for the same, then in such a case the defaulting party has to indemnify for the same.
10. Force majeure: What if one of the parties fails to perform their duties and obligations, or assume that the broadcaster fails to broadcast the following content due to the reasons which are beyond the control of the human power such as acts of god, floods, hurricane, typhoon, power failure, the content that need to be broadcast becomes illegal due to policy change or is not in accordance with the broadcasting law laid down by the Television networks (Regulations) Act, 1995, disputes within the labour of the company, etc., it is essential to mention in such a situation that how does this agreement be treated and who will be responsible for such losses, what can be done to recuperate such losses.
- Severability: What will happen in such a situation where one of the portions of the agreement becomes illegal because it is not under public interest and against the law. To avoid any discrepancy the parties should mention that the remaining part will be valid.
- Intellectual property rights: In many cases the parties suffer from infringing or misuse of the Intellectual Property rights. It is essential to define it in the agreement and that the client will have the right over the content of the broadcast and that the broadcaster cannot generate any third party rights nor he is allowed to sell it to any other person and that the broadcaster is broadcasting the content with the permission of the client.
13. Method of payment: The Parties shall define the details of the banking transactions as what will be the mode of payment and the required details for the following, account holders name and any other details which are required to mention for the following transactions.
- Notice: Some of these clauses are known as boilerplate clauses which is as important as the operative clauses. Under these clauses the parties define the procedure of conducting the following agreement. One of such clauses is the Notice clause. Under this clause it should be clearly mentioned who has the right to send the notice and under what circumstances. This will help initiating any proceedings legally without consuming too much time of any of the parties.
- Jurisdiction: It is one of the important clauses which helps following the proper procedure at the time of the dispute resolution.
- Governing Law and Dispute Resolution: It is one of the operative clauses in the Agreement which is required the most by the parties. This clause acts as the aid in most of the disputes. It is important to mention the appropriate dispute resolution method and the governing law to avoid any discrepancy at the time of the dispute.
For Example: Party A and Party B have entered into a broadcasting agreement, where Party B (“Client”) is seeking the broadcasting services of Party A (“Broadcaster”). Further, Party B made a default in payment and the amount became outstanding as per the payment clause mentioned under the agreement, Party A reminds Party B many times to pay the outstanding amount but no action was taken by the other party. In such a situation Party A can initiate the proceedings mentioned under the dispute resolution clause of the agreement (if the process of Arbitration is mentioned under the dispute resolution clause) to sort the following dispute without any further discrepancy.
Under what circumstances are such agreements needed?
Now that we have understood the essential clauses of the Agreement, it is important to understand why such an agreement is required by the Parties.
For example: If we talk about events like sports league the revenue from such events are generated by selling the broadcasting rights to the broadcasting companies and by revenue sharing criteria. In such a case if the parties enter into an oral agreement it can be a cause for future dispute, as it is not clear to the parties that how much revenue should be shared, what is the fees that should be paid by the client to the broadcaster for the usage of the services, what measures should be done in case of non-compliance of the agreement by any of the parties, misuse of the IPR of the client, and many more such situations can arise.
To reduce such risk and to prevent such future disagreements the parties opt to enter into such binding agreement which is binding on both and provides the amicable solutions to such situations.
Implications of not getting into the agreement or entering into an agreement without a proper review
As we have discussed above why parties have entered into such an agreement, it is essential to review such an agreement before entering into it which also shows the implications of not entering into such an agreement. The parties should always look for the clauses like for example:
- Restrictive covenants or non-compete clauses which are commonly found in many radio and television agreements. Under which it is stated that the client is not allowed to work for any other company of the similar nature for a definite time period. Now, suppose in such a situation there is Party A who is a piano artist who has prepared so many songs to present on stage got into an agreement with the local network company to broadcast such a show in the particular area. The reach of such a show is limited to a particular area, but further, the Party A wanted to expand the area of the broadcast but cannot do so because of the abiding agreement. To escape from such an agreement Party A will have to bear such an amount as a penalty which it cannot afford. This particular situation brings us to our second clause which is the escape clause.
- Escape clause: It is important to make sure if the parties can leave the agreement if it is required, what are the circumstances and what are the penalties for doing such an act. The parties should also look for the clauses like revenue sharing clauses.
- Revenue sharing clauses- The parties should always check before entering into the agreement that how much is revenue sharing is between the parties. Though the clause can be amended at a later stage it can still create clashes between the parties. So it is better to review it before entering into the agreement.
- IPR: – Who holds the Intellectual property rights over the subject matter. To maintain the authenticity of any subject matter that can be infringed by any of the parties or any other third party, the parties should clearly define such rights.
These clauses also show why it is important to enter into such an agreement. The parties have to face so many consequences in the absence of such an agreement such as:-
- If any of the parties did not comply with the agreement term they have decided on, no definite legal proceedings can be conducted.
- It will be time and money consuming to sort such disputes for both the parties.
- The chances of sorting the disputes amicably is nearly low.
- It will be difficult for both the parties to entertain such lengthy legal proceedings.
- It will be difficult to prove any points by any of the parties in the absence of such an agreement.
Any relevant case law where parties entered into such an agreement
There are several judgments regarding broadcasting in India. One of the Landmark Judgments we would like to discuss is:
Secretary, Ministry of Information and Broadcasting v/s Cricket Association of Bengal
Under which the Supreme Court finds out that:
- That the Freedom of Speech and Expression includes the right to broadcasting as well. The Parties are free to telecast their match on air live without any hindrances.
- The agency or client have the right to choose any broadcasting agency as per their choice to telecast their sports events.
Broadcasting Agreement forms the essential part of the sports as well as entertainment industries. As we have discussed above all the essentials of the Broadcasting agreement, it is important to keep the broadcasting in check and should be under the public and nations interest. We can conclude by saying that the Broadcasting Agreement eventually helps the Parties to keep the check of their acts and keep them binding by the law so that no illegal or wrong information can be broadcast by any means.
- Vidify Broadcast Contract (1490wwpr.com)
- Critically Analysis of Broadcasting Right & Control (legalservicesindia.com)
- The Secretary, Ministry Of … vs Cricket Association Of Bengal & … on 9 February, 1995 (indiankanoon.org)
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