FCC Decision Looms On NFL's TV Blackout RulePlay
When the FCC holds its next open meeting later this month, the first item on the agenda is a proposal to eliminate the sports blackout rule — the measure that prohibits cable companies from showing a game that’s not available on local broadcast television because it hasn’t sold out.
[sidebar title="How The NFL Became King" width="630" align="right"]Richard Crepeau's new book 'NFL Football' details the league's evolution.[/sidebar]
Amy Schatz covers politics and policy for Re/code, a technology news website. Back in July, she noticed something unusual. Hundreds of sports fans had filed comments with the FCC in support of the so-called "blackout" rule.
“I don’t know how they convinced some of these people to do this because, frankly, most people really hate sports blackouts,” Schatz said.
Many comments came through the NFL sponsored website ProtectFootballOnFreeTV.com. The site is a masterful piece of propaganda, where fans are warned that “pay-TV lobbyists” want to charge them for the games they now get for free.
The organization lobbying loudest against the blackout rule, the Sports Fan Coalition, does have ties to Verizon and Time Warner Cable. And while Schatz calls the blackout rule “anti-consumer,” she agreed that cable and satellite operators have a lot to gain.
“This would be a pretty good thing for cable,” she said. “If the rule went away that means that your local cable operator could still get another signal and they could just show you the game anyway.”
Leftover From Another Era
When the FCC instituted the blackout rule almost 40 years ago, the NFL was making most of its money on ticket sales. But, this year alone, CBS, Fox, NBC, ESPN, and DirectTV will pay the NFL more than $5.5 billion for the rights to broadcast games.
“Why is the FCC, a government agency, intervening in the marketplace on behalf of team owners? That’s the essential question here,” said Ajit Pai, one of five FCC commissioners who will vote on this issue later this month.
Pai pointed out that the league already negotiates with local broadcasters for the right to black out games. That clause is written into many cable and satellite contracts, too. So the league could keep its blackout rule, even if the FCC stopped supporting it.
“It seems to me that if the NFL wants to negotiate how to televise the games with local television broadcasters and cable companies and satellite companies, it’s certainly free to do that,” Pai said. “But it’s not the government’s role to put a thumb on the scales in favor of the leagues as they do that.”
Football Hall of Famer Lynn Swann has been lobbying on behalf of the NFL. He says it's not that simple.
“There would be buildings, monuments built to all the law firms for all the contracts that would have to be done,” Swann said.
Sure, the NFL is financially solid now, Swann admits, but without blackouts, TV ratings might erode, and broadcasters wouldn't be willing to pay as much. That might leave the NFL looking for new revenue sources, leading the league to put more, if not all, games on cable.
Two years ago, the NFL started allowing teams to have blackouts lifted when just 85-percent of tickets are sold. The Cincinnati Bengals chose that option this season. Swann maintains the league has done everything it can to make sure games aren't blacked out.
“It’s kind of like the Constitution,” Swann said. “The founding fathers did something pretty good but along the way it had to be tweaked here and there. But you don’t get rid of the Constitution. The blackout rule is the same thing.”
Under the rule’s most recent re-write, just two of last year’s 256 regular season games were blacked out. But Cincinnati, Green Bay, and Indianapolis all faced post-season blackouts. Those were averted at the last minute because local businesses bought hundreds of tickets and gave them away for free.
Swann said the blackout rule supports full stadiums, which are just more fun. But Nathaniel Grow, a sports law professor at the University of Georgia’s Terry College of Business said what’s really at stake is the NFL’s bottom line.
“One way or the other I think the NFL views it as ‘it’s going to cost us something to maintain it. Whereas now the FCC rule gives us the presumption that we don’t even have to negotiate over it, potentially,'" Grow said.
The NFL is the only major sports league that shows most of its games on free TV. But, Grow warned, there’s nothing in the FCC rule that requires the NFL to keep it that way.
“Even if the FCC were to maintain the rule, if ESPN comes along and offers $20-gazillion for the rights to every single NFL game, they’re probably going to go to ESPN and you’re not going to see them on over-the-air television,” Grow said.
But, chances are, the FCC won’t maintain the rule. In USA Today on Tuesday, FCC Chairman Tom Wheeler compared the sports blackout rule to a “bad hangover.” With Wheeler and Pai, the anti-blackout lobby has two of the three votes they need. Experts say the third vote isn't far behind.
This segment aired on September 13, 2014.