The General Court, the European Union's second highest court, dismissed a similar challenge by European football's governing body, UEFA, against a decision by British authorities to protect broadcast of the European Championship finals.
"A member state may, in certain circumstances, prohibit the exclusive broadcast of all World Cup and Euro football matches on pay television, in order to allow the general public to follow those events on free television," the Court said.
It said such restrictions were justified by the public's right to information and the need to ensure wide access to TV broadcasts.
Under an EU directive, EU countries are allowed to draw up a list of events of national interest or "crown jewels" for broadcast on free-to-air stations,
Such events include the Olympic Games, the football World Cup, the European Championships, England's FA Cup and the Wimbledon tennis championships.
FIFA was contesting a 2007 Commission decision allowing Belgium and Britain to reserve broadcasting rights for the World Cup to free-to-air TV stations.
FIFA and UEFA argued that the regime interferes with their property rights, especially when some countries broadcast all matches even though their national teams do not play in some of the events.
The sports bodies also argue that they get less money from free-to-air TV broadcasts, which in turn would have a knock-on effect on investments and attracting world-class players and hence the quality of the games.
Proponents say allowing everybody to watch sports events will increase interest in the games.
"We welcome the decision from the EU and continue to support the principle of protecting sports events for free to air coverage," a spokesman for Britain's Culture, Media and Sport department said.
