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NFL and MLB ask Supreme Court to stop Aereo, warn they will move more games to cable

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In the latest sign of how Aereo has become a strategic threat to the TV industry, the National Football League and Major League Baseball have joined the four major broadcasters in asking the Supreme Court to stop the upstart service, which lets subscribers stream over-the-air TV to laptops and mobile devices for $8/month.

The sports leagues argue that Aereo is undercutting the value of the deals they sign with TV companies, and that they will have to respond by moving all of their games to cable stations like ESPN and NFL Network. Currently, the NFL distributes 90% of its games via the broadcasters — CBS(s cbs), NBC(s cmcsa), ABC(s dis) and FOX(s foxa) — while MLB shows 400 games a year and the World Series this way.

In a friend-of-the-court brief, reported by Variety and embedded below, the leagues warn that Aereo: “adversely impacts the more than eleven million households in the United States that do not subscribe to cable or satellite and thus do not receive non-broadcast cable networks.”

The leagues and the broadcasters are asking the Supreme Court to step in and overrule a finding by an influential New York appeals courts’ repeated findings that Aereo, which relies on tiny antennas to deliver a personal TV stream, does not violate copyright law.

It’s uncertain, however, if the Supreme Court will hear the case in the current term which ends in June, or if the Justices will wait until the 2014-15 term. Court watchers note that there is a current split in the law between the east and west coasts, but that an appeals court in California (where Aereo-like services are now illegal) has yet to rule — meaning the case may be premature.

The NFL and MLB brief is also significant because it provides a window into the evolving economics of TV in the digital era. It notes, for instance, that cable and satellite systems like Time Warner(s twc) or Dish(s dish) now pay $300 million a year for “retransmission rights” from the broadcasters, and that the sports leagues get $100 million of that.

The leagues also regard Aereo as a threat to their strategy of slicing up online sports rights into smaller and smaller pies — through products like NFL Sunday Ticket (which allows Direc-TV subscribers to watch out-of-market Sunday games) and NFL Mobile, which saw Verizon(s vz) pay $1 billion for the rights to stream some games to cellphones but not tablets.

In the view of the leagues, the Supreme Court should overrule the New York decision because it “unravels the foundation of this business model by giving broadcast retransmission rights to unlicensed commercial strangers.”

Aereo, meanwhile, has been on a roll of late, winning the rights to stream its service in Boston while going live in many more markets like Detroit and Miami. Aereo CEO, Chet Kanojia, has vowed to crush the current “bundle” model of TV which forces consumers to buy dozens of channels they don’t want in order to watch the channels they do.

Here’s the NFL and MLB brief. I’ve underlined some of the key parts:

NLB MLB Amicus brief in Aereo case

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19 Responses to “NFL and MLB ask Supreme Court to stop Aereo, warn they will move more games to cable”

  1. The dumbest thing the networks could do is to move their top rated programming into a drowning sea of 300 channels–because of Aereo. Content creators like the NFL are in a slightly better position to make good on that threat because of the NFL network. People who regularly watch NFL games are already paying for cable anyway. The fact that it’s on another network won’t change anything. This a a load of BS. The NFL is not going to sign a joint petition with CBS to remove their games from CBS. If it were a REAL threat, CBS would be soiling their pants over losing the NFL.

  2. Screw the NFL and MLB. Get rid of MLB’s anti-trust exemption also. And this is from an avid baseball fan. I have subscribed to MLB Premium for about four years but no more . They black out afternoon games on the weekends so you have to watch the broadcast stations. I live in Houston and MLB will black-out Ranger home games. Houston is not that close to Dallas.

    Watch MLB Tonight sometime and listen to the hosts talk about player and team value. It’s unbelievable how disconnected they are from the real world.

    Fed up these pampered owners and players.

  3. The adage that the NFL and the other sports leagues lose money from Aereo is only in their minds. If they could make more money on a Pay TV channel or on a pay-per view basis they already would. The truth is that they get the most eye balls from the broadcast networks because of their national distribution. The advertisers pay for that airtime broad distribution be it on cable, satellite or OTA. Aereo still gives the networks and advertisers those viewers.

    I believe Aereo will prevail and other companies with this type business model will replace the current pay TV companies. The pay TV companies have ripped-off the consumer for way too long in the package model making viewers pay for channels they don’t watch and don’t want. Many of thees channels are just infomericals with the sole purpose of making money from the viewers through higher cable fees, no entertainment value for the viewer.

  4. You know it’s right when big money hungry entities are getting scared and running to the government to tell mommy. Streaming is the future, it is now. Either make subscriptions that are sensible and accessible to everyone or someone else will do it.

  5. newmetro2010

    Aereo is on a roll because this is settled law. The U.S. Supreme Court decided this 45 years ago in the case of “Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968)”.

    Aereo is an antenna service, not a broadcaster. They provide broadcaster content, commercials included, to people who might otherwise getting the signal, were it not for some natural obstacle.


    New Metro

    • Wow, I’m actually reading the details of the case, and that thing is like a torpedo to the broadcasters’ arguments. Just substitute “Aereo” in for “CATV”, and it basically reads like what Aereo is doing, except that the CATV systems didn’t even need to have individual antennas for each user to justify their existence, just a single one.

      Now, the question is whether this has been superceded by other laws that congress has enacted since 1968. I would not be surprised if the copyright lobby got to them and fixed this hole really quick.

  6. Matt Watson

    It is absolutely ridiculous that we have to pay for cable or TV at all and then be forced to watch commercials. NFL needs to wake up and enable online streaming via their website just like MLS and others do.

  7. dvanallen

    Agree with Rock Science . . .we have the Big Ten adding teams like Penn State to give the conference broader geographic coverage. Meanwhile, cable and satellite TV providers aren’t allowed to offer unbundled programming.

    For example, Packers fans living in Illinois without top tier cable/satellite packages couldn’t watch the first Packers vs. Bears matchup of the 2012-13 season. Why? Because the Thursday night game was broadcast only on the NFL Network.

    The NFL (and MLB, NBA, etc.) needs to wake up and begin offering more unbundled choice. Live TV streaming will be mainstream very soon, and Aereo is currently the best way for them to monetize their audience. The alternative, for students of history, is the next Napster.

  8. Tetracycloide

    As one of those eleven million households it sickens me that the NFL and MLB are threatening to shoot the hostages if the Supreme Court doesn’t stop Aero. Furthermore, I thought ‘felony interference with a business model’ was a tounge in cheek mock of these sort of competition by litigation strategies yet they seem to be using it as their literal argument. Maybe no one told them how ludicrous it sounds to claim something should be illegal simply because they’d make more money that way…

  9. If broadcasters are going to use public airwaves for their product, Aereo is fine. If these same broadcasters would like to move to cable/satellite model pay model, then return the broadcast spectrum so that it can be repurposed for other uses; Aereo is out of business.

    You shouldn’t be able to have it both ways.

  10. Rock Science

    Being a Seahawks fan that just moved to New Jersey for work reasons, I’ve become incensed at the way the NFL forces consumers to watch things we don’t want (Philly and Giants games…ugh!). Long story short, go Aereo, some of these biz models do need disrupting because the NFL in particular is abusing its monopoly.