mthoopsfan
Well-known member
"The National Football League owners held their annual meeting in Phoenix this week, and they are masters of all they survey: stellar TV ratings, record revenue and team valuations, and possible international and flag-football expansion. But maybe the billionaires should consider the backlash building against the antitrust exemption they retain from another era.
In a fracturing culture, the NFL is a rare entity that still commands a mass audience. After this year’s Super Bowl, the league boasted that 137.8 million people tuned in during the second quarter, “marking the highest peak viewership in U.S. TV history.”
This popularity explains why team values keep increasing. Forbes rates the Dallas Cowboys as the league’s most valuable franchise, worth $13 billion, with revenue of $1.2 billion. Even the relatively poor Cincinnati Bengals, at the bottom of the list, are estimated to be worth $5.25 billion, with revenue of $573 million.
By any measure the NFL is an entertainment goliath. One reason is that in 1961 Congress passed the Sports Broadcasting Act, granting the league limited antitrust immunity to let the pro teams collectively license “the ‘sponsored telecasts’ of their games to national broadcast networks,” as Utah Sen. Mike Lee recently put it in a letter to the Justice Department and Federal Trade Commission.
But today’s media universe features splintering providers. “The NFL now licenses games simultaneously to subscription streaming platforms, premium cable networks, and technology companies,” Mr. Lee explained. If football games are put behind subscription paywalls, “these arrangements may no longer align with the statutory concept of sponsored telecasting or the consumer-access rationale underlying the antitrust exemption.”
The history is instructive, since Congress passed the legal exemption at a moment of weakness for the NFL and strength for traditional broadcasters. In the early days of TV, the league instituted broadcast “blackout” policies to prevent free games on air from eating into stadium sales. When the government sued under antitrust law, the judge’s 1953 ruling was a mixed outcome. Yet today it reads like a crackling radio dispatch from a quaint age.
“There are always teams in the League which are close to financial failure,” the judge said. “It is both wise and essential that rules be passed to help the weaker clubs in their competition with the stronger ones.” After the NFL received competition from the American Football League, it sought to pool its TV revenue, which the Sports Broadcasting Act blessed for “sponsored telecasting.” The revenue-sharing model has been successful and gives all NFL teams a chance to compete on a relatively even playing field.
Yet today the NFL is the powerful giant while the broadcasters are weak. Commissioner Roger Goodell wants to take advantage of this dominance by renegotiating with the networks. In 2021 the NFL finished a package of broadcast deals, including with CBS, Fox and NBC, that were meant to run through 2033. Rights fee roughly doubled.
Mr. Goodell is using the threat of an early opt-out provision to change the terms only halfway through the deals. The assumption is that he thinks he can get more money from big tech’s streaming services than he can from his long-time TV partners. That would hurt the networks, especially local stations, that rely on the NFL for ad revenue. Live sports are one of the last drivers of large audiences, and the advertising funds local news and reporting.
It would also mean higher prices for football viewers tuning into the NFL, and consumer benefit is one of the lodestars of antitrust law. “To watch every NFL game during this past season,” Sen. Lee says, “football fans spent almost $1,000 on cable and streaming subscriptions.”
The NFL may have the power to squeeze the networks, but the question then becomes why the league would deserve an antitrust exemption. The Federal Communications Commission also wants to know. “Live sports and broadcast television have enjoyed a long and mutually beneficial relationship,” the FCC said in a recent request for public
But if the NFL no longer wants that deal, and it would prefer to squeeze fans for more money while broadcasters are hollowed out, then Congress might consider whether that 1961 antitrust exemption has ceased to make sense. Let’s hear the NFL explain why it still deserves it."
In a fracturing culture, the NFL is a rare entity that still commands a mass audience. After this year’s Super Bowl, the league boasted that 137.8 million people tuned in during the second quarter, “marking the highest peak viewership in U.S. TV history.”
This popularity explains why team values keep increasing. Forbes rates the Dallas Cowboys as the league’s most valuable franchise, worth $13 billion, with revenue of $1.2 billion. Even the relatively poor Cincinnati Bengals, at the bottom of the list, are estimated to be worth $5.25 billion, with revenue of $573 million.
By any measure the NFL is an entertainment goliath. One reason is that in 1961 Congress passed the Sports Broadcasting Act, granting the league limited antitrust immunity to let the pro teams collectively license “the ‘sponsored telecasts’ of their games to national broadcast networks,” as Utah Sen. Mike Lee recently put it in a letter to the Justice Department and Federal Trade Commission.
But today’s media universe features splintering providers. “The NFL now licenses games simultaneously to subscription streaming platforms, premium cable networks, and technology companies,” Mr. Lee explained. If football games are put behind subscription paywalls, “these arrangements may no longer align with the statutory concept of sponsored telecasting or the consumer-access rationale underlying the antitrust exemption.”
The history is instructive, since Congress passed the legal exemption at a moment of weakness for the NFL and strength for traditional broadcasters. In the early days of TV, the league instituted broadcast “blackout” policies to prevent free games on air from eating into stadium sales. When the government sued under antitrust law, the judge’s 1953 ruling was a mixed outcome. Yet today it reads like a crackling radio dispatch from a quaint age.
“There are always teams in the League which are close to financial failure,” the judge said. “It is both wise and essential that rules be passed to help the weaker clubs in their competition with the stronger ones.” After the NFL received competition from the American Football League, it sought to pool its TV revenue, which the Sports Broadcasting Act blessed for “sponsored telecasting.” The revenue-sharing model has been successful and gives all NFL teams a chance to compete on a relatively even playing field.
Yet today the NFL is the powerful giant while the broadcasters are weak. Commissioner Roger Goodell wants to take advantage of this dominance by renegotiating with the networks. In 2021 the NFL finished a package of broadcast deals, including with CBS, Fox and NBC, that were meant to run through 2033. Rights fee roughly doubled.
Mr. Goodell is using the threat of an early opt-out provision to change the terms only halfway through the deals. The assumption is that he thinks he can get more money from big tech’s streaming services than he can from his long-time TV partners. That would hurt the networks, especially local stations, that rely on the NFL for ad revenue. Live sports are one of the last drivers of large audiences, and the advertising funds local news and reporting.
It would also mean higher prices for football viewers tuning into the NFL, and consumer benefit is one of the lodestars of antitrust law. “To watch every NFL game during this past season,” Sen. Lee says, “football fans spent almost $1,000 on cable and streaming subscriptions.”
The NFL may have the power to squeeze the networks, but the question then becomes why the league would deserve an antitrust exemption. The Federal Communications Commission also wants to know. “Live sports and broadcast television have enjoyed a long and mutually beneficial relationship,” the FCC said in a recent request for public
But if the NFL no longer wants that deal, and it would prefer to squeeze fans for more money while broadcasters are hollowed out, then Congress might consider whether that 1961 antitrust exemption has ceased to make sense. Let’s hear the NFL explain why it still deserves it."
