http://www.politico.com/story/2014/09/nfl-blackout-rule-fcc-111441.html
By BROOKS BOLIEK | 9/30/14 5:06 AM EDT Updated: 9/30/14 11:52 AM EDT
The FCC dumped the sports blackout rule Tuesday, dealing a blow to the NFL at a time of growing scrutiny for the league in Washington.
In a unanimous 5-0 vote, the commission eliminated the decades-old regulation, which prevents cable and satellite TV from airing games that are blacked out locally when the team fails to sell enough tickets to fill its stadium. The NFL has defended the rule as a tool to ensure robust attendance, but a growing number of regulators and lawmakers say it unfairly punishes football fans.
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“It’s a simple fact, the federal government should not be party to sports teams keeping their fans from viewing the games — period,” said Democratic FCC Chairman Tom Wheeler. “For 40 years these teams have hidden behind a rule of the FCC. No more. Everyone needs to be aware of who allows blackouts to exist, and it is not the Federal Communications Commission.”
The league’s defeat on blackouts comes at a time when it’s taking heat in Washington on everything from how it handles domestic violence to the impact of concussions on its players to the name of the Washington Redskins team. As the negative publicity mounts, some lawmakers say they want to examine the NFL’s tax status and antitrust exemption — a move that threatens to damage the league’s business model.
The sports blackout rule applies to all professional sports teams, but it’s become closely linked to the NFL, which uses it the most and has fought hardest to keep it in place.
“We’ll review the FCC’s decision on the blackout rule, which has worked for decades to make our games available,” NFL spokesman Brian McCarthy said in a statement Monday ahead of the vote. “With or without the rule, the league will continue to work to find new ways to bring more people to the game, and bring the game to more people.”
This summer, the league and its broadcast partners mounted a public relations campaign that touted the regulation, saying it ensures football remains on free television. Any FCC action to eliminate the rule, they warned, would hasten the migration of NFL programming to pay TV, ultimately depriving many fans of the ability to watch games.
That tactic angered GOP Commissioner Ajit Pai.
“Some have tried to scare sports fans by arguing that football games will move from broadcast television to cable or satellite TV if the FCC eliminates the sports blackout rule,” Pai said. “Let me address that argument head on. To begin with, there is no way that this can happen anytime soon. The NFL’s contracts with over-the-air broadcasters extend until 2022, but more importantly, by moving games to pay TV, the NFL would be cutting off its nose to spite its face.”
Eliminating the rule won’t immediately end all blackouts. They could still occur locally under existing contracts between the NFL and broadcasters, or as a result of negotiating disputes between broadcasters and pay-TV operators. But Tuesday’s action by the FCC “takes our public policy finger off the scale,” said Commissioner Mignon Clyburn, a Democrat who first circulated the proposal to get rid of the rule when she was acting chairwoman.
The NFL may be in for more headaches on the issue in Washington in the months ahead.
Sens. Richard Blumenthal (D-Conn.) and John McCain (R-Ariz.) and Rep. Brian Higgins (D-N.Y.) are sponsoring a bill called the FANS Act, which would remove the league’s antitrust exemption if it allows blackouts during disputes between its broadcast and cable partners. Under the 1961 Sports Broadcasting Act, NFL teams are permitted to jointly negotiate broadcasting rights without violating antitrust law.
Separately, some members of Congress are pushing to scrap a tax break enjoyed by the NFL league office. The office, which organizes broadcast rights, negotiates with the players union and pays Commissioner Roger Goodell his reported $35 million salary, is organized as a 501(c)6 tax-exempt organization, allowing it to avoid paying taxes on certain activities.
“I’ve made some proposals to impose accountability and responsibility on the NFL because it has a special position of trust,” Blumenthal said. “It has huge benefits that come from antitrust exemptions and tax breaks.”
David Goodfriend, executive director of the Sports Fan Coalition, which was instrumental in the push to end sports blackouts at the FCC, said Washington policymakers should also look at the NFL’s use of tax-free municipal bonds for stadium construction.
“The NFL did not want to lose any of its public subsidies for fear of a domino effect, but we’re here,” he said. “Of course the public is going to ask: What are the other subsidies we are giving these guys?”
By BROOKS BOLIEK | 9/30/14 5:06 AM EDT Updated: 9/30/14 11:52 AM EDT
The FCC dumped the sports blackout rule Tuesday, dealing a blow to the NFL at a time of growing scrutiny for the league in Washington.
In a unanimous 5-0 vote, the commission eliminated the decades-old regulation, which prevents cable and satellite TV from airing games that are blacked out locally when the team fails to sell enough tickets to fill its stadium. The NFL has defended the rule as a tool to ensure robust attendance, but a growing number of regulators and lawmakers say it unfairly punishes football fans.
Continue Reading
“It’s a simple fact, the federal government should not be party to sports teams keeping their fans from viewing the games — period,” said Democratic FCC Chairman Tom Wheeler. “For 40 years these teams have hidden behind a rule of the FCC. No more. Everyone needs to be aware of who allows blackouts to exist, and it is not the Federal Communications Commission.”
The league’s defeat on blackouts comes at a time when it’s taking heat in Washington on everything from how it handles domestic violence to the impact of concussions on its players to the name of the Washington Redskins team. As the negative publicity mounts, some lawmakers say they want to examine the NFL’s tax status and antitrust exemption — a move that threatens to damage the league’s business model.
The sports blackout rule applies to all professional sports teams, but it’s become closely linked to the NFL, which uses it the most and has fought hardest to keep it in place.
“We’ll review the FCC’s decision on the blackout rule, which has worked for decades to make our games available,” NFL spokesman Brian McCarthy said in a statement Monday ahead of the vote. “With or without the rule, the league will continue to work to find new ways to bring more people to the game, and bring the game to more people.”
This summer, the league and its broadcast partners mounted a public relations campaign that touted the regulation, saying it ensures football remains on free television. Any FCC action to eliminate the rule, they warned, would hasten the migration of NFL programming to pay TV, ultimately depriving many fans of the ability to watch games.
That tactic angered GOP Commissioner Ajit Pai.
“Some have tried to scare sports fans by arguing that football games will move from broadcast television to cable or satellite TV if the FCC eliminates the sports blackout rule,” Pai said. “Let me address that argument head on. To begin with, there is no way that this can happen anytime soon. The NFL’s contracts with over-the-air broadcasters extend until 2022, but more importantly, by moving games to pay TV, the NFL would be cutting off its nose to spite its face.”
Eliminating the rule won’t immediately end all blackouts. They could still occur locally under existing contracts between the NFL and broadcasters, or as a result of negotiating disputes between broadcasters and pay-TV operators. But Tuesday’s action by the FCC “takes our public policy finger off the scale,” said Commissioner Mignon Clyburn, a Democrat who first circulated the proposal to get rid of the rule when she was acting chairwoman.
The NFL may be in for more headaches on the issue in Washington in the months ahead.
Sens. Richard Blumenthal (D-Conn.) and John McCain (R-Ariz.) and Rep. Brian Higgins (D-N.Y.) are sponsoring a bill called the FANS Act, which would remove the league’s antitrust exemption if it allows blackouts during disputes between its broadcast and cable partners. Under the 1961 Sports Broadcasting Act, NFL teams are permitted to jointly negotiate broadcasting rights without violating antitrust law.
Separately, some members of Congress are pushing to scrap a tax break enjoyed by the NFL league office. The office, which organizes broadcast rights, negotiates with the players union and pays Commissioner Roger Goodell his reported $35 million salary, is organized as a 501(c)6 tax-exempt organization, allowing it to avoid paying taxes on certain activities.
“I’ve made some proposals to impose accountability and responsibility on the NFL because it has a special position of trust,” Blumenthal said. “It has huge benefits that come from antitrust exemptions and tax breaks.”
David Goodfriend, executive director of the Sports Fan Coalition, which was instrumental in the push to end sports blackouts at the FCC, said Washington policymakers should also look at the NFL’s use of tax-free municipal bonds for stadium construction.
“The NFL did not want to lose any of its public subsidies for fear of a domino effect, but we’re here,” he said. “Of course the public is going to ask: What are the other subsidies we are giving these guys?”
