SPORTS BROADCASTING Basic Concepts Key premise discussed later

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 attendance 2> bar telecasts that compete w/ telecasts of home team's away games 3> 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 onfield 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 Direc. TV • Does the Sports Broadcasting Act apply to sales to Direc. TV? • Does the agreement between the NFL and Direc. TV have an anticompetitive effect? • Are there justifications? – maximizing revenues? – free riding on other NFL clubs? – competitive balance?