The FCC has voted unanimously to scrap the sports blackout rule, to the consternation of the National Football League but small boon to broadcasters and MVPDs.
The rule prevents programming distributors from showing a local game in a local market if the game has not been sold out. It applies to all major league sports, though the NFL has been the most enthusiastic proponent.
FCC Chairman Tom Wheeler said, “It’s a simple fact, the Federal government should not be party to sports teams keeping their fans from viewing the games – period. 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.”
Separately, there is growing sentiment in Congress to reexamine the NFL’s tax status and antitrust exemptions.
The blackout rule was put in place at a time when attendance was still the major source of revenue for most professional teams. In the decades since, ticket sales have been reduced to a minority percentage of proceeds. In the NFL especially, teams’ revenue from the sale of TV rights has far exceeded income at the gate.
And as a practical matter, in recent years relatively few games have failed to sell out, so there have been relatively few games blacked out. Furthermore, enterprising fans can get around blackouts by accessing out-of-market broadcasts of local games, if they’re motivated enough.
The move will not eliminate blackouts immediately. The rule remains enshrined in contracts the NFL has signed with many broadcasters, and some of those contracts are reported to extend to 2022.
Nonetheless, getting rid of the rule is expected to reduce the number of blackouts. There is also some potential it may lead sports leagues to arrange to have more games broadcast by MVPDs.
The NCTA, representing the cable industry, We commend the Commission’s unanimous decision to eliminate the antiquated sports blackout rule. 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consumers more competition and a growing variety of new services, we encourage the FCC to continue its examination of outdated rules that no longer make sense.”
Photo credit: USA Today
Filed Under: Industry regulations