Sports Leagues, Consumer Groups, Others Butt Heads Over Ending Sports Blackout Rule

The Office of the Commissioner of Baseball wants the FCC to strengthen rather than eliminate the rules. It urged the commission to amend the rules to require cable systems, satellite carriers and online video systems (OVS) to delete the distant signal telecast of a game licensed exclusively to a local broadcaster, as well as a regional sports network or other non-broadcast network. The rules prohibit cable systems, satellite carriers and OVSs, upon proper notification, “from retransmitting a distant signal telecast of a sports event to subscribers within approximately 35 miles of the event -- provided that a local broadcast station is not televising the same event,” said the baseball commissioner (http://bit.ly/NuZAiV). “If gate receipts have diminished in importance relative to television rights fees, the importance of the sports rules as a means of protecting those rights fees has increased.” Having leagues and individual teams negotiate in the private market isn’t a realistic alternative to the sports rules, it said.

Supporters of elimination haven’t presented any material changes that should cause the commission to repeal the policy, the NFL said (http://bit.ly/MZkua4). Significant features in sports and TV haven’t changed, it said. Every game remains available on over-the-air TV, the NFL continues to offer games that are “big, live” events “marked by full stadiums with excited crowds and fans watching on broadcast” TV, and the compulsory copyright “could be used by cable and satellite companies to undermine the league’s media and stadium objectives,” it said. The NFL’s blackout policy is rarely invoked, it said: The league “has adjusted its policy in recent years to give teams more flexibility as they seek to strike the right balance between promoting the in-stadium experience and engaging fans over television.” Contractual provisions can’t achieve the same results as the sports blackout rule, it said. Current contracts for distribution of the services don’t contain provisions prohibiting cable and satellite providers from importing a distant signal if a game on broadcast TV is blacked out, it said.

The FCC doesn’t have the legal authority to get rid of the sports blackout rule, the NFL said. Congress adopted the blackout provision “not for the sake of protecting the gate in its own right, but instead for the purpose of promoting sports on broadcast television,” the NFL said. “Because Congress has not sought to repeal or amend the SBA [Sports Broadcasting Act], the commission should be wary about amending its own rules which were designed to reinforce that legislative judgment."

NCTA, ITTA and Sports Fans Coalition agreed the rule no longer serves a meaningful purpose, they commented separately. Regardless of whether the purpose of the rules remains a reasonable and legitimate regulatory goal, “the rules today have no practical effect and therefore, do nothing to serve this or any other purpose,” said NCTA (http://bit.ly/OztYd5). Sports leagues and teams can include provisions in their contracts with networks and with broadcast stations, other than superstations, “that prevent broadcast stations from granting consent for the retransmission of their signals by cable systems in distant markets for such purposes,” NCTA said. The only ongoing sports blackout issue that continues to concern anyone “is whether it is right for a sports league like the NFL to prevent viewers from watching their teams’ home games when the games are not sold out,” it said. The FCC’s sports blackout rule “plays no meaningful role in either facilitating or prohibiting such blackouts,” it said.

ITTA wants the FCC to extend the relief of eliminating the rule to all multichannel video programming distributors (http://bit.ly/1c5oph9). Changes in the sports industry since the blackout rules were adopted have rendered the rules unnecessary to ensure the overall availability of sports programming to the public, it said. TV revenue replaced gate receipts as the most significant source of revenue “and the record indicates that the sports blackout rules have little relevance for sports other than professional football because the distribution rights for most of the games in other sports are sold by individual teams, rather than the leagues,” it said. Congress later directed the FCC to extend the sports blackout rules it adopted to direct-broadcast satellite and OVS providers “to establish regulatory parity between cable operators and other MVPDs,” it said. When the FCC repeals the rules, “it should provide the same relief to all MVPDs to avoid creating undue disparities among such entities,” ITTA said.

Elimination will be a “net negative for the average sports fan, especially those that receive sports programming free over-the-air,” said NAB (http://bit.ly/1eu2tGJ). Without the rules operating as a backstop, “sports leagues could lose control over the distribution of their games on broadcast TV, likely hastening the migration of major sports to pay TV,” it said. It also will have a negative effect on TV stations and the long-term relationship between the NFL and broadcasters, it said. The Sports Fans Coalition asked the FCC to direct the NFL to give audited financial statements of the league in support of the contention that the policy serves the league’s financial interest.