SPORTS BROADCASTING

Basic Concepts

• Key premise (discussed later): right to broadcast is a property right belonging to home team

• Business dynamic of TV licensing by a club-run league– Each club competes– League owns all rights– Clubs own rights and bargain

US v NFL

AT ISSUE WERE 3 RESTRAINTS 1> bar telecasts that compete w/ home game

attendance2> bar telecasts that compete w/ telecasts of

home team's away games3> bars radiocasts that compete w/ radiocasts of

any home team games

/2 US v NFL

• Note early and sophiticated form of rule of reason

• Focus on rule’s effect of improving on-field position of weaker team and weakening on-field position of stronger team– Claim that absent “artificial rules” rich will always

get richer, and poor will get poorer

• Do you agree with the Court’s conclusion that restraints on out-of-market sales, when not protecting live gate, are unreasonable?

SPORTS BROADCASTING ACT

§1 ALLOWS PACKAGE SALES FOR “SPONSORED TELECASTING”

§2 BARS BLACKOUTS EXCEPT OF HOME GAMES§3 BARS NFL ON FR NITE OR SAT

Response to SBA• NFL took full advantage by assigning all games to a free-to-air network

– recent moves of Thu and Sun/Mon night games to nat’l cable, shown free-to-air in local markets

• Other 3 leagues have responded only partially– sell game-of-the-week to network per SBA– each team continued to license local games w/i exclusive broadcast

territories– with cable, leagues sold add’l games to ESPN/TNT– with satellite and internet, leagues began league-wide packages for

out-of-market games, although blackout local cable– MLB has a general revenue sharing scheme that includes local

broadcast right income, NBA/NHL have more modest revenue sharing schemes

BULLS

• Why did the NBA want to limit the number of Bulls’ games on the WGN superstation?

/2 Bulls

• WGN ratings: 650,000 nationwide• Local cable ratings for other Bulls’ games in

Chicago: 350,000• Of the roughly 300,000 outside-Chicago

viewers, half from cities without NBA Teams• Thus, average viewership of around 5,000 in

each NBA market– some Bulls fans– some avid fans watching own team + Bulls

Schwartz v DirecTV

• Does the Sports Broadcasting Act apply to sales to DirecTV?

• Does the agreement between the NFL and DirecTV have an anti-competitive effect?

• Are there justifications?– maximizing revenues?– free riding on other NFL clubs?– competitive balance?

MLB EXCLUSIVE TERRITORIES• How would you analyze the legality of

exclusive local broadcast territories under new Article X, §3 of MLB Constitution?

MIGRATION TO CABLE

• Should the US adopted “listed events” legislation mandating certain sporting events on free TV?