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March 10, 2014 | From the blogSportsUncategorized

The FCC Tackles the NFL Blackout Policy

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Domenic Romano

Founder & Managing Partner

The NFL may have to revise its blackout policy for the televised broadcasting of games, which is now officially under attack by the FCC.

Under the NFL’s current policy, games that haven’t sold between 85% and 100% of their tickets within 72 hours of kickoff won’t be televised in the local market.  The FCC, however, is ready to punt its own sports blackout rule, which was implemented almost 40 years ago with hopes of keeping organized sports profitable.  The FCC invited public comment on the issue until February 24, and reply comments will be accepted through Tuesday, March 25.  Do you think the FCC’s blackout rule should be repealed?  

Since the late 1800s, the U.S. government has passed antitrust laws to promote competition in the marketplace.  The NFL’s policy, however, came about from a congressional antitrust exception: the Sports Broadcasting Act of 1961.  Under this Act, professional sports teams engaged in basketball, football, baseball and hockey are allowed to join together in their respective leagues to form single network agreements for national broadcasting rights.  The purpose of the Act was to allow teams to share revenues and protect home ticket sales—the predominant source of income for early NFL teams.  The Act also includes “blackout rules,” protecting teams playing at home from competing games being broadcasted into their home territory.

Since 1975, the FCC has granted further protections with its own sports blackout rules, which “prevent cable and satellite networks from providing sports events to which a local broadcast station has exclusive broadcasting rights provided by the sports league” in the event of a blackout.  This rule also allows private contractual agreements between sports leagues and the broadcast networks and stations to determine what will trigger a blackout.

Despite its good intentions in the 1970s, the FCC should eliminate its anti-consumer protections because the policy is out of date and no longer serves its original purpose.  One of the main goals of the Sports Broadcasting Act of 1961 was to protect home ticket sales.  Currently, however, sports networks are going to great lengths to avoid blackouts.  For example, in 2013, a Monday Night Football matchup between the Indianapolis Colts and San Diego Chargers was thought to have been heading towards an inevitable blackout.  In order to televise the game, a group of local sponsors and ESPN purchased enough tickets for the blackout to be lifted.

Should the FCC strip its blackout protections when fans are footing the bill to games they can’t watch?    Senator Sherrod Brown observed, “Fans, through local taxes, often help pay for the stadiums.  They should be able to cheer on their local teams, especially during the playoffs.”  Also, nearly every NFL team has, in one way or another, benefited from public subsidies for stadium construction.  Senator Tom Coburn, on the other hand, has taken a different approach, going on the offensive against the NFL’s tax-exempt status.

The NFL filed its own commentary regarding the FCC’s proposed rule change, arguing that “the blackout policy increases the availability of sports games on television by encouraging broadcasters and professional sports leagues to reach deals for exclusive broadcast rights.”  But such an argument misses the point.  Fans, who often support the teams through tax payments, are being barred from watching games at home.  Will the FCC follow through and tackle this issue, eliminating the protections that allow the NFL’s blackout policy to exist?

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