Sports fans could see more and cheaper games, as court and FCC take aim at unpopular blackout rules

5 Comments

It’s one of the most maddening experiences as a sports fan: your favorite team is playing and most of the country can watch the game on TV or on the internet — except for you, because you in a live in a “blackout” zone where the game is off-limits. But now, relief may be on the way thanks to two developments last week that could put an end to the blackouts.

The first comes via the FCC where Republican Commissioner Ajit Pai renewed a push to kill a 1975 rule that allows the leagues to black out games on cable if a local team fails to sell enough tickets. The proposal, first announced in December, appears to be gaining momentum before a vote in the fall, according to a National Journal report.

If the FCC plan passes, which appears likely, it will be a victory for fans but a relatively minor one. The reason is that the FCC rule, for practical purposes, has only affected football fans in a handful of cities where small-market NFL teams — including Buffalo, Cincinnati and San Diego — fail to sell out their games.

The bigger development last week comes by way of a court decision in which a federal judge in New York refused to halt class action claims by fans who say blackout rules imposed by the NHL and Major League Baseball violate antitrust laws.

The blackouts at issue in this case are much broader, and cover not only TV broadcasts of hockey and baseball games, but internet packages too. According to fans who filed the lawsuit, the leagues are engaging in an illegal conspiracy with cable companies and regional sports networks to inflate the prices of out-of-market games, in part through the use of blackouts.

In December, the fans cleared a big procedural hurdle when U.S. District Judge Shira Scheindlin said the case could go to trial. And last week, the fans won a new victory when Scheindlin refused to issue a stay in the decision pending the outcome of a Supreme Court case.

The Supreme Court case, which doesn’t involve the sports leagues, is about when companies can force customers into mandatory arbitration. Comcast(s cmcsa) and the other cable companies involved in the blackout lawsuits say the arbitration rules should apply, but Scheindlin disagreed, saying arbitration rules are not relevant in the case of antitrust issues.She also emphasized that the arbitration rules did not apply to the NHL and MLB in the first place, and said the leagues’ request for a stay was based on “multiple layers of highly optimistic speculation.”

What happens next and what it means for fans

Taken together, the rulings are important because they suggests that authorities are growing skeptical of rules that give powerful sports leagues a free pass on ordinary anti-trust rules. More importantly, for fans, the end of blackouts could mean not just more games, but lower prices — the judge reportedly cited an expert who claims game packages could cost 50 percent less if there was true competition in the sports market.

For the leagues, however, a new legal limit on blackouts would be a big blow to their business strategy, which relies on slicing up the TV and digital rights to their games in very selective fashion. Specifically, restrictions on blackouts would make it harder to charge the monopoly premiums for cable packages that live sports can command.

For now, though, it’s soon to say if — or when — the blackouts will come to an end. The popular support to end the FCC blackout rule, both at the agency and among politicians, means that the end of local NFL TV blackouts could occur as soon as this season.

The court case, however, will take longer to unfold and it’s a safe bet the leagues and the cable companies will fight it every step of the way. The Commissioner of Major League Baseball already asked a New York appeals court this week to stop the antitrust case from going to trial.

The bottom line is that long-suffering fans appear on the verge of striking a blow against the much-hated blackouts, but that it will not be until late this year or 2015 until they know they have a victory.

5 Comments

Mark

i live 5+ hrs from Atlanta, DC and Baltimore. But i cannot see ANY of those MLB games. none are on local broadcast. I use to not be able to see Cinci games – 8 hrs away. Totally stupid. I cannot wait till this is fixed. I agree with the rest. Wanna fill a stadium? Charge reasonable prices. most of the view in the stadiums stink. Make the place heated/cooled with a clean toilet next to me and a 60′ screen view… i might pay currrent prices.

snuggles

Considering that taxpayers pay for most of the sports arenas in the USA, they shouldn’t be blacked out.

On another note, there are a lot of Gigaom commenters who need tinfoil hats.

LV Moving

This is an issue that I am happy to see being dealt with by the FCC. I lived in Cincinnati for 15 years that included the 1990s and when the Cincinnati Reds won the World Series. Soon after the baseball strike was in effect and I have refused to spend any money on anything baseball ever since. I believe the players earn WAY too much money and for those players that sign a contract only to end up on the injured list, they are part of why the cost of tickets is so high.

There is a good reason why the ticket sales are low in those cities you mentioned, the people in those areas need better paying jobs to begin to even afford tickets. That doesn’t mean they aren’t fans of their local teams. If the ball clubs would WAY REDUCE the cost of tickets, even for a short period, they would get more people sucked into the entire “It’s better to watch a game at the stadium” thought process. Throw the fans a bone!

In the meantime, outlaw the “Blackout” jive, so the bankrupt citizens (95% of the US population – the people who contribute to Social Security) in the United States can see their favorite teams play. (The other 5% who earn the most money should be banned from any sporting events until they begin to pay into the Social Security System that supports the people the rich have been stepping on to become so.)

Thanks for the great post Jeff.

Jeff John Roberts

Thanks for the kind words and sharing your thoughts, LV Moving. I’ve wondered myself if the leagues and teams are just shooting themselves in the foot with the blackout rules — raising ticket prices (and all the stadium extras) beyond what average people can pay, and then shutting them out from TV games seems a recipe to alienate fans.

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