FCC Turns Off Lights on NFL Sports Blackout Rule

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By Lydia Beyoud

Sept. 30 — The Federal Communications Commission voted unanimously to eliminate its sports blackout rule and remove itself as a regulatory shield to the National Football League's decisions to prevent sports fans from watching live games.

The rules require local broadcast TV stations to black out a game if a team didn't sell a certain percentage of tickets, and prohibit cable and satellite operators from airing events that were blacked out on a local station.

“It's a simple fact: the federal government should not be party to sports teams keeping their fans from viewing the game,” FCC Chairman Tom Wheeler said at the agency's September open meeting.

“For forty years, these teams have hidden behind a rule of the FCC—no more,” he said. “If there are blackouts next weekend or Monday night or Thursday night, let alone on Sunday, it will be the decision of the league and its team owners not, with the participation of the federal government.”

‘Bygone Era'.

The FCC's vote “takes a public policy finger off the scale of being a party to any future blackout,” Democratic Commissioner Mignon Clyburn said.

Fellow Democratic Commissioner Jessica Rosenworcel said the rules were a “vestige from a bygone era” when the NFL struggled to fill seats and generate sufficient revenue from ticket sales, its primary source of revenue when the rules were enacted in 1975.

“But revenues today for professional sports teams are a multibillion dollar mix of television rights, stadium naming rights, merchandise, licensing, corporate sponsorships, and luxury suites. For the life of me, I do not understand why this Commission still has rules in the middle of this mix,” Rosenworcel said.

The NFL makes an estimated $10 billion in annual revenue. NFL Commissioner Roger Goodell has said the league hopes to grow profits to $25 billion by 2027.

Free-to-Air.

The NFL made a concerted lobbying effort to retain the rules, including saying that the rule was in the public interest and a key component in the league's decision to broadcast games on free over-the-air TV, according to a filing on the proceeding (MB Docket No. 12-3).

The FCC questioned that statement, however. Republican Commissioner Ajit Pai said there was “no way” football games could easily move from broadcast to paid cable or satellite TV services following the repeal of the FCC rule.

“By moving games to pay TV, the NFL would be cutting off its nose to spite its face. Television contracts—not gate receipts—make up a substantial majority of the NFL's revenues nowadays. And professional football is, by far, America's most popular sport in part because it is the only major sport that makes most games available on free, over-the-air television,” said Pai.

Republican Commissioner Mike O'Rielly said the league needn't worry about struggling to enforce its copyrights for NFL games without the blackout rule because it has sufficient leverage to negotiate contractual provisions, including private blackout policies, with broadcasters and multichannel video programming distributors (MVPDs).

“Simply put, the NFL does not need the FCC rules to do what it can do for itself,” he said.

The NFL did not respond to requests for comment.

Rules in Effect During Playoffs.

Indeed, the FCC's vote on the rule won't eliminate all future blackouts, as the NFL can still reach private agreements with broadcasters and MVPDs to block games.

Furthermore, the length of the regulatory process means the blackout rules will be in effect through much of the playoffs season.

The rules should be published in the Federal Register within two weeks of the Sept. 30 vote, and will likely go into effect 30 days after publication, a spokesperson with the FCC's Media Bureau told reporter following the meeting.

The National Cable and Television Association welcomed the FCC's decision. “As the video marketplace continues to evolve and offers consumers more competition and a growing variety of new services, we encourage the FCC to continue its examination of outdated rules that no longer make sense,” it said.

A spokesperson for the Sports Fans Coalition, which helped lead the public call for elimination of the rule, said the FCC vote was “a victory for fans everywhere and for the public, which has subsidized virtually every NFL stadium.”

The group said it would continue to press the NFL to end its own policy of blacking out fans.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com