FCC Eliminates Sports Blackout Rules

FCC Eliminates Sports Blackout Rules

At its open meeting this morning, the FCC unanimously adopted a Report and Order in which it eliminated its sports blackout rules (specifically Sections 76.111, 76.128 and 76.1506(m)), which prohibit cable operators, DBS operators and open video system (OVS) operators from retransmitting, within a protected local blackout zone, the signal of a distant broadcast station carrying a live sporting event that is not available live on a local television broadcast station.  A copy of the Commission’s associated news release is available HERE.

The decision is not a surprise, as the Commission had specifically proposed to eliminate the rules in its Notice of Proposed Rulemaking for this proceeding and Commissioners had publicly stated their support for that proposal.

 

After introductory remarks by Media Bureau Chief William Lake, the item was presented by Kathy Berthot of the Bureau’s Policy Division. The key points of the presentation were as follows:

 

  • The Commission originally adopted the cable sports blackout rule in 1975, with the intent of ensuring availability of sports programming via off-air television in all markets while simultaneously protecting the gate receipts of local sports teams.  As a result of marketplace developments, however, the rules effectively are now only relevant to the National Football League, which has experienced substantial growth both in TV and overall revenues with substantially less reliance on gate revenue.  The sports blackout rules therefore are obsolete, since original economic justifications for them no longer exist.

 

  • The Commission’s regulation should not support what amount to private business decisions by the NFL to black out games on local television.  If the NFL wishes to continue its blackout policies, it must do so without support from the federal government.

 

  • Elimination of the rules is unlikely to prompt the NFL to migrate games from off-air television to pay TV, due to its existing contracts with the broadcast networks (which do not expire until 2022) and the economic costs of losing distribution via local television.

 

  • NFL blackouts of local games are rare in any case.  Only two out of 256 games were blacked out last season, and none have been blacked out so far this season.

 

Chairman Wheeler and the other four Commissioners generally reiterated these points in their separate statements.  In addition, the Chairman emphasized that any blame for future blackouts must be directed at the NFL, and pointedly expressed his hope that the NFL will respond by eliminating blackouts altogether.   Commissioner Clyburn went so far as to state that football has supplanted baseball as the national pastime, and the Commission’s decision serves the dual objectives of taking the Commission’s rules out of the NFL’s business decisions while furthering the Commission’s broader agenda of eliminating unnecessary and obsolete rules.  Commissioner Rosenworcel noted that the Commission’s decision would not guarantee that blackouts will not occur in the future and, like the Chairman, urged all concerned parties to solve the problem privately.  Commissioner Pai noted that fans of local teams often have both economic and non-economic reasons for being unable to attend games, and that the Commission had received substantial fan support for eliminating the rules.  Commissioner O’Rielly observed that the NFL has sufficient bargaining leverage to protect its interests in future negotiations with broadcast and cable networks, and that concerns about migration of games to pay TV are undermined by the NFL’s 2005 decision to move Monday Night Football from ABC to ESPN notwithstanding the existence of the sports blackout rules.

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