FCC Releases Proposal to Eliminate Sports Blackout Rules
In a proposal to eliminate the sports blackout rules, the FCC seeks comment on whether the rules are needed to give the public access to telecasts and the effect that a repeal of the rules would have on consumers. The rulemaking notice was released Wednesday, after circulating among commissioners in draft form last month (CD Nov 4 p3). If the record in the proceeding confirms that the sports blackout rules are no longer necessary “to ensure the overall availability to the public of sports telecasts, we propose to repeal these rules,” said a Media Bureau NPRM unanimously approved by the commission (http://fcc.us/1bQ7VC2). The rules prevent multichannel video programming distributors from carrying games that are blacked out by sports leagues on TV stations in markets where the games haven’t sold out.
The bureau addresses concerns of some commenters over losing protection that the sports blackout rules provide for teams due to compulsory copyright licenses granted to multichannel video programming distributors. The bureau seeks comment “on how the compulsory licenses would affect the ability of sports leagues and sports teams to obtain through market-based negotiations the same protection that is currently provided by the sports blackout rules,” it said. “Because the sports leagues could obtain local blackout protection through their contracts with broadcast stations, the commission suggested that the sports leagues may not need the sports blackout rules to prevent MVPDs from using the compulsory licenses to carry blacked-out games.” Sports blackout rules “may serve primarily as an enforcement mechanism for existing contracts between broadcasters and sports leagues,” it said. The bureau seeks comment on that analysis. The bureau said it intends to understand the extent to which the sports leagues contract directly with MVPDs for carriage of networks or game packages owned directly by the sports leagues.
The bureau also would like input on the effect that a repeal of the rules would have on consumers. The record holds comments from disabled consumers, or elderly sports fans “who are physically unable to attend games in person and rely on TV ... to watch their favorite teams,” it said. The bureau also heard from consumers claiming that they can’t afford ticket prices, it said. Potential harm to customers as a result of a repeal also will be considered, the NPRM said.
The bureau would like to know whether repeal of the sports blackout rules would likely encourage migration of NFL games to pay TV in the immediate future or in the longer term, it said. This was a concern expressed by the NFL.
"With today’s ruling by the FCC, we end the federal role in this unfair process and add momentum and public pressure to a full-scale end to sports blackouts,” said Rep. Brian Higgins, D-N.Y., in a statement. Higgins introduced the Furthering Access and Networks for Sports Act this year (CD Nov 14 p10).
NAB expressed concern that the change would hasten the migration of sports to pay-TV platforms and “disadvantage the growing number of people who rely on free, over-the-air television as their primary source for sports,” it said in a news release (http://bit.ly/1jiYR2H). “Allowing importation of sports programming on pay-TV platforms while denying that same programming to free broadcast-only homes would erode the economic base of local television and hinder broadcasting as an engine for economic growth in local communities.”
The NPRM is “the beginning of the end” of the rule in particular and “government subsidization of anti-fan behavior by sports leagues more generally,” said David Goodfriend, chairman of the Sports Fans Coalition, which had petitioned the agency a few years ago to start the proceeding. Public Knowledge also supported the move. “Broadcasters, leagues and cable systems might still privately negotiate contracts that have the effect of limiting what programming choices are available to viewers,” said PK staff attorney John Bergmayer. “But the FCC should not be in the business of putting its thumb on the scales in a way that harms viewers.”
The commission also acknowledged that the importance of gate receipts has diminished dramatically for NFL clubs, “particularly in relation to television revenues,” the NPRM said. It asks whether the rules are still necessary to promote attendance at games and ensure telecast availability to the public if gate receipts are no longer the primary or most significant source of revenue for NFL clubs. It asks whether blackouts have any significant effect on gate receipts for any sports events other than NFL games, it said.