• Villanova Sports Law Blog

Why do I HAVE to watch the Eagles? The Sports Broadcasting Act of 1961 and the media monopoly


(Carson Wentz of the Philadelphia Eagles v. Washington Redskins during the 2019-20 season)[1]


By: Dante Camilli


The Philadelphia Eagles are not easy on the eyes. After losing games to the Los Angeles Rams and the Washington Football Team, and tying the lowly Cincinnati Bengals, the Eagles have one of the worst records in the NFL (albeit somehow still leading the NFC East). The on-field product is far from what was presented every Sunday to the Philadelphia area during the Eagles magical Super Bowl run, and during this rough stretch it is more than fair to pose the question: Why do I HAVE to watch the Eagles?


The simple answer is that you like football enough to watch and distract yourself from the responsibilities of the upcoming week, no matter what the product is. The legal answer is a bit more complex. The multi-billion-dollar industry of American sports yields revenue from ticket sales, concessions, and merchandise. However, the real money is made from their television contracts. Among the four largest sports leagues in the country (NFL, NBA, MLB, and NHL), a combined total of $10.6 billion is earned annually from their respective network contracts.[2] Chief among those is the NFL, which reels in the largest share of that each year, to the tune of six-billion dollars.[3]


The ability for professional sports to control their own sportscasting destiny is due in part to the Sports Broadcasting Act of 1961.[4] The act exempts professional football, baseball, basketball and hockey leagues from federal antitrust laws when negotiating agreements for sponsored telecasts of their teams and contests.[5] The act is also supported by an “area telecasting restriction limitation” that permits television “blackouts” within the home territory of teams within their own regions.[6] Blackouts used to be an important provision for the NFL because if ticket sales were below 85 percent of their stadium’s capacity 72 hours before kickoff, they would blackout the game on its local network to keep people from watching the game at home.[7] In a world where we have everything at our fingertips, this seems like an odd provision, but it existed in order to incentivize ticket sales at NFL games, as filling the seats used to be more profitable than the broadcasting deals that professional sports have today.


Prior to 2014, there were Federal Communications Commission (FCC) rules that would blackout nationally televised games in regions that also broadcasted primetime games locally.[8] Eliminating this rule loosened the grip of regionally broadcast games somewhat, but they still have control over blacking out streaming services within their region.[9] All four professional sports leagues have their own streaming service advertising that you can watch every game in the league from your couch or your mobile device.[10] The caveat is that regional blackout restrictions still apply for all of these subscriptions.[11]


Let us analyze what we have learned so far with two hypothetical football fans: Mike from Miami and Pat from Philadelphia. Mike is a Villanova Law student from Miami who loves the Dolphins. Thankfully, his Main Line apartment provides cable with his rent. Mike knows that the Dolphins typically play at one o’clock on Sundays, so he schedules his day around it and plans on getting his Torts reading done before kickoff. Unfortunately, regional contracts and protection ensure that the Eagles game is broadcasted on cable at that same time. As a result, Mike must keep up with the Dolphins game through the box score on the NFL app.


Conversely, Pat is a faithful Eagles fan but does not want to pay for cable. The only thing Pat watches on television is football so he was looking for an option that would allow him to get his gridiron fix. He heard about NFL Sunday Ticket and thought that the one-time payment of $293.96 was absolutely worth being able to watch the Eagles every week, especially with COVID-19 preventing him from getting to Lincoln Financial Field.[12] Tragically, Pat did not realize that Sunday Ticket only allowed him to watch live out-of-market games, so his investment turned him into a member of the Eagle’s scouting department instead of a fan.


The inconvenience outlined by these hypotheticals is prevalent in today’s United States as cord cutting continues to rise each year.[13] With an estimated 34% of households not using cable in 2019 [14] and more than 1.6 million people dropping their cable subscription due to the pandemic,[15] it is possible that professional sports may have to reconsider where they are going to broadcast their games after their contracts are up. Coincidentally, the NFL and NHL’s current deals are set to expire after the 2021 seasons, and the NBA’s current deal expires in 2025.[16] With the ability to negotiate in a new landscape that has seen the emergence of Netflix and Amazon has streaming titans, there may be a shakeup in the way sports are presented to us in the near future.[17]


It may be more likely that the NFL does not deviate from the status quo. Fox, CBS, NBC, and Disney (ESPN) could just pay the premium to retain exclusive rights to NFL games for the foreseeable future.[18] However, with the ever-growing power of the internet and streaming services, it is fun to speculate that there is great change for the sports broadcasting world ahead of us. A world where the Mike’s and Pat’s of the world can watch their team through whatever service they want, wherever they are in the country would most certainly be a better place. We can only hope professional sports leagues adapt to the climate and realize fans will be much happier if the shackles of blackouts and regional based broadcasting are lifted and fans had more power to choose how they can watch their favorite teams.


In the meantime, the best we can hold out for is that the Eagles can start to put a better product on the field and make that one o’clock slate more enjoyable.


References:


[1] Zack Rosenblatt, Why won’t Eagles’ Carson Wentz stop fumbling? Here’s the QB’s, Doug Pederson’s latest explanation, NJ.com (December 17, 2019), https://www.nj.com/eagles/2019/12/why-wont-eagles-carson-wentz-stop-fumbling-heres-the-qbs-doug-pedersons-latest-explanation.html


[2] Sports broadcasting contracts in the United States, Wikipedia (October 4, 2020), https://en.wikipedia.org/wiki/Sports_broadcasting_contracts_in_the_United_States#:~:text=The%20NFL%20has%20the%20largest,the%202014%20through%202021%20seasons


[3] Id.


[4] 15 U.S.C.S. §1291 (LexisNexis).


[5] Id.


[6] 15 U.S.C.S. § 1292 (LexisNexis).


[7] SI Wire, NFL continues suspension of local TV blackout policy for 2016, Sports Illustrated (March 28, 2016), https://www.si.com/nfl/2016/03/28/nfl-continues-suspension-tv-blackout-rule


[8] Sports Blackouts, Federal Communications Commission (December 10, 2019), https://www.fcc.gov/consumers/guides/sports-blackouts#:~:text=A%20sports%20blackout%20is%20when,as%20cable%20and%20satellite%20television


[9] Id.


[10] NFL Sunday Ticket, https://nflst.directv.com/?sessionTimeout=true; NHL.tv, https://www.nhl.com/subscribe; MLB.tv, https://www.mlb.com/live-stream-games/subscribe/postseason/2020; NBA League Pass, https://www.nba.com/watch/pricing.


[11] Games blacked out on a DIRECTV channel, https://www.att.com/support/article/directv/KM1022959/; NHL.tv and NHL Premium Blackout Detector, https://www.nhl.com/info/nhltv-blackout-detector; What is MLB.com’s Blackout Policy?, https://www.mlb.com/live-stream-games/help-center/blackout-policy; NBA League Pass Blackout Information, https://www.nba.com/leaguepass/blackouts.


[12] NFL Sunday Ticket, supra.


[13] Aaron Pressman, Why Cord Cutters Are Favoring Cheaper Online Options Over Cable-Like Bundles, Fortune (April 22, 2019), https://fortune.com/2019/04/22/cord-cutting-ott-netflix-directv/


[14] Id.


[15] Aaron Pressman, Cord cutting is speeding up as the coronavirus pandemic squeezes consumers, Fortune (May 5, 2020), https://fortune.com/2020/05/05/cord-cutting-coronavirus-cable-satellite-tv-comcast-verizon-charter-altice-att-dish/


[16] Sports broadcasting contracts in the United States, supra.


[17] Alex Sherman, Here’s how NFL TV rights are expected to shake out for the rest of the decade, according to sources, CNBC (February 23, 2020), https://www.cnbc.com/2020/02/22/nfl-tv-rights-up-for-renewal-in-2022-and-big-media-will-pay-more.html


[18] Id.