Why can't Brits get Sky TV in Spain?

You can receive Sky TV in Spain.

However, due to the broadcast agreements, the channels on Sky TV do not have the correct broadcast contracts to allow their programming to be available in Spain. In fact, many of those TV programmes on the Sky channels may have already been bought for viewing in Spain by the Spanish TV broadcasters like TVE, or Cuatro, or LA Sexta or their satellite TV service Digital+.

The Spanish broadcasters will have bought the rights to show those programmes in Spain. So the channels on Sky TV would not be allowed to show them...unless they too paid for the Spanish TV rights.

These rights agreement and contracts are controlled on the Sky TV pay system by the use of satellite viewing card, or Sky cards. These cards allow the viewing with a subscription of the channels on the Sky TV system. These Sky TV cards are only issued to UK addresses.

However, many people use a friend or family members UK address to register a card that is then used in Spain.

The use of a Sky viewing card in Spain is not illegal. It is only against the terms and conditions of use of that Sky card. If the use of a Sky card in Spain was illegal then the card owner would be jailed. As it is a contractual matter between the user and Sky, should one of those partners in that agreement break the terms of the contract, like using the Sky TV card in Spain, then all Sky TV can do is to discontinue the card and cut of the Sky Pay TV channels.