Are NFL Blackouts JFK’s Bay of Pigskin?
By Ted Hearn
A freshman Member of Congress is upset about media blackouts, especially ones that remove popular sporting events like National Football League games from millions of American TV screens.
The lawmaker, Rep. Pat Ryan, a Democrat from New York’s Hudson Valley, has demanded an investigation by the U.S. General Accountability Office. The GAO specializes in responding to such requests, but its turnaround period can be extensive — sometimes so long that by the time the GAO finally decides to publish its views, the country has moved on.
But TV sports blackouts are different because they have been happening for years and in NFL games involve the most highly rated programming for which rightsholders have paid a fortune that needs to be recovered. So, TV sports blackouts are highly likely to continue as a marketplace feature and a major consumer pain point unless effectively controlled by new laws and regulations.
In his Oct. 31 letter to the GAO, Rep. Ryan, who won in a special election last year, took aim at two laws — one of which dates to the Kennedy Administration — that he suspects are at the heart of his concerns about TV sports blackouts.
The first one was the 1992 Cable Act, ostensibly a consumer protection-media competition law that regulated cable TV rates and required cable operators to sell many channels that they own to fledging competitors like DirecTV and Dish Network.
In a big win for the National Association of Broadcasters, a lobbying group for TV stations owners, the cable law also permitted TV stations to demand cash from cable TV operators and withhold their signals for as long as they wanted to keep the pressure on cable. The pay-for-carriage regime is called retransmission consent.
As the pay-TV-industry-backed American Television Alliance has thoroughly documented, TV stations repeatedly use blackouts as strategic leverage to get pay-TV providers to crack open their wallets.
Recent example: In late August, Disney pulled ABC and ESPN from cable TV operator Charter Communications — disrupting 14.3 million cable customers just days before the first NFL Monday Night Football game of the year on ABC and ESPN. This 12-day standoff received record attention, but in the end, it did not appear to strengthen the hand of Capitol Hill lawmakers Rep. Steve Scalise (R-La.) and Rep. Anna Eshoo (D-Calif.), who view retransmission consent as a menace and want it abolished.
Retransmission consent, born 31 years ago, today underpins the business model of broadcast giants like Nexstar Media Group and Sinclair Inc. Nexstar’s retransmission consent dollars easily top its traditional source of revenue: Advertising. Thus, in the view of most Washington, D.C., insiders, broadcasters will use all their lobbying clout to defeat efforts to reform retransmission consent no matter what the GAO says in its response to Rep. Ryan.
So, what’s the second law mentioned by Rep. Ryan? The Sports Broadcasting Act of 1961. The what?
Most Americans never heard of it. Signed into law by President John F. Kennedy, the SBA provided the NFL with an anti-trust exemption to allow the NFL Commissioner to negotiate broadcast TV rights on behalf of all 32 NFL teams. The SBA overturned a court decision that held NFL teams, as competing organizations, could not pool their TV rights and needed to make TV deals individually.
Ryan is concerned that the SBA is harmful to consumers because the balkanization of NFL game packages among TV stations, streaming services like Amazon Prime, and cable networks like ESPN makes it far too hard to track a favorite team on one platform and serves to empower NFL rightsholders to use blackouts to maximize revenue.
“Sports blackouts have long been a source of frustration and inconvenience to Americans of all backgrounds,” Rep. Ryan says in his GAO letter, adding that he wants to know “whether sports blackouts are related to the major sports leagues’ antitrust exemption under the Sports Broadcasting Act of 1961.”
If the GAO in fact puts the TV sports blackout onus on the SBA, do we call that ancient law from the days of the New Frontier JFK’s Bay of Pigskin?
Ted Hearn is Editor of Policyband