Running head: THE SPORTS BLACKOUT RULES OF TODAY

Old Laws, New Technology: The Sports Blackout Rules of Today

Natalie Wichern
Scott Uecker

COMM440-01

THE SPORTS BLACKOUT RULES OF TODAY

Old Laws, New Technology: The Sports Blackout Rules of Today

In broadcasting, the term blackout is particularly prevalent in accordance

with sports leagues and events, where cable and satellite providers are prohibited

from airing events that have been blacked out in certain media market through rules
implemented by the Federal Communications Commission. Recently, the

Commission chose to repeal its sports blackout rules however, sports leagues may
also opt to implement their own private blackout policies through contractual

arrangements with programming distributors. The rules were made to ensure the
continued availability of sports telecasts to the public. Perhaps the most widely

known blackout rules implemented privately by a sports league are those of the

National Football League (NFL) followed by Major League Baseball (MLB) and the
National Hockey League (NHL).

The rationale of the FCCs past blackout rules, originally adopted nearly 40

years ago when ticket sales were the main source of revenue for sports leagues, was

to serve to protect local broadcasters, mainly regional sports networks, from

competition by only allowing viewers to watch non-national telecasts of teams

within their designated markets. However, in line with recent changes in the sports
industry, the FCC participated in an investigation into the main sources of revenue
for the NFL. The research yielded results that exposed the recent increase in

television revenues that in return, replaced gate receipts as the main income driver

THE SPORTS BLACKOUT RULES OF TODAY

for the NFL 1. Due to changes in the main source of revenue for the NFL and most

other leagues, FCC commissioner Mignon L Clyburn stated in the publicly released

full notice of the proposed rulemaking that elimination of our sports blackout rules
will not prevent the sports leagues, broadcasters, and cable and satellite providers
from privately negotiating agreements to black out certain sports events. 2

The history behind the Commissions sports blackout rules begins with the

Constitution and Bylaws of the National Football League in 1953. According to the
Commissions 2013 Notice of Proposed Rulemaking, Sports Blackout Rules 3, the

bylaws prohibited member teams from, among other things, (i) telecasting their
games into the home territory of another team that was playing at home, and (ii)
telecasting their games into the home territory of another team that was playing

away from home and was telecasting its game into its home territory. With these
rules in mind, a federal court held that the NFLs prohibition on the telecast of

outside games into the home territory 4 of a team that was playing at home was held

a reasonable method of protecting the home teams gate receipts and was not illegal
under the antitrust laws. However, the court also found that restricting the telecast
of outside games into the home territory of a team not playing at home was an

Ingraham, N. (2013, December 18). FCC officially proposes removing its 40-yearold sports blackout rules.
2 Federal Communications Commission, In the Matter of Sports Blackout Rules,
Notice of Proposed Rulemaking, FCC 13-162, MB Doc. No. 12-3 (2013).
3 Id.
4U.S. v. National Football League et al., 116 F.Supp. 319, 321 (E.D. Pa., 1953) (U.S. v.
NFL I). Home territory is defined in the NFLs bylaws as the city in which [a] club
is located and for which it holds a franchise and plays its home games and includes
the surrounding territory to the extent of 75 miles in every direction from the
exterior corporate limits of such city. See Constitution and Bylaws of the National
Football League (Eff. Feb. 1, 1970, 2006 Rev.)
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unreasonable restraint on trade due to the fact that when the home team was away,
there was no gate to protect.

Jumping ahead a few years to 1961, the NFL contracted an agreement with

the CBS television network under which the NFLs member teams authorized the
league to pool together and sell the rights of their games to the network as a

package. Then, the revenue from the league sales was to be distributed equally

among the member teams. In addition, under this agreement, CBS was permitted to
regulate which games would be televised and where they would be televised.

However, the NFL later petitioned the court for a ruling to determine whether or not
the terms of the contract with CBS violated the final judgment of the 1953 federal

court. The court held that the provision giving CBS the power to select which games
would be televised and the locations of the telecast was contrary to the 1952 final

judgment. 5 Therefore, the execution and performance of the contract was void. Yet,

this ruling did not apply to a similar contract between the newly formed American

Football League (AFL) and the ABC television network. The AFL was not a party to
the courts 1953 final judgment therefore, not affected. 6

With the newly formed AFL competing with the NFL, the NFL became

concerned that the courts ruling was placing them at a clear disadvantage. The NFL
argued that, packaged network contract were desirable because they allowed for
the member teams to negotiate for the sale of television rights with a single voice
U.S. v. National Football League et al, 196 F.Supp. 445 (E.D. Pa 1961)
Federal Communications Commission, In the Matter of Sports Blackout Rules,
Notice of Proposed Rulemaking FCC 13-162, MB Doc. No. 12-3 (2013).
5
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and equalized revenue among the member teams. 7 With this in mind, the NFL

petitioned Congress for relief.

The response of Congress to the NFLs plea for relief was a passage of the

Sports Broadcasting Act of 1961, where it, exempts from the antitrust laws joint
agreements among individual teams engaged in professional football, baseball,

basketball, or hockey that permit the leagues to pool the individual teams television
rights and sell those rights as a package. 8 In addition, this statute also expressly

permits the four professional sports leagues to black out television broadcasts of
home games within the home territory of a member team. When the Sports

Broadcasting Act of 1961 was enacted, television blackouts were believed to be a

necessity to protect the gate receipts while also protecting the importance of the
packaging of individual teams television rights in order to enhance the financial

stability of the leagues by assuring equal distribution of revenues among all teams.

In addition, the NFL instituted a practice of blacking out the television broadcast of

all home games of its member teams in their home territory, regardless of whether
the games were sold out. 9

Ten years later, the Commission referenced the professional sports leagues

Federal Communications Commission, In the Matter of Sports Blackout Rules,

Notice of Proposed Rulemaking, FCC 13-162, MB Doc. No. 12-3 (2013).
8 The antitrust laws shall not apply to any joint agreement by or among persons
engaging in or conducting the organized professional team sports of football,
baseball, basketball, or hockey, by which any league of clubs participating in
professional football, baseball, basketball, or hockey contests sells or otherwise
transfers all or any part of the rights of such leagues member clubs in the sponsored
telecasting of the games of football, baseball, basketball, or hockey, as the case may
be, engaged in or conducted by such clubs. 15 U.S.C. 1291
9 Federal Communications Commission, In the Matter of Sports Blackout Rules,
Notice of Proposed Rulemaking, FCC 13-162, MB Doc. No. 12-3 (2013).
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exemptions from the antitrust laws in a 1971 letter sent to Congress that sought

guidance on the Commissions proposed regulatory scheme for cable television

sports programming. The Commission expressed concern that the cable systems
should not be permitted to circumvent the purpose of this law by importing the

signal of a station carrying the home game of a professional team if that team has
elected to black out the game in its home territory. 10

Three years later in 1973, during the pendency of the Commissions

rulemaking proceeding, Congress enacted Public Law 93-107 11, that added a new
Section 331 to the Communications Act of 1934. In doing so, it prohibited

professional sports leagues from blacking out the television broadcast of a home

game in a teams home territory if the game was televised elsewhere pursuant to a
league television contract and the game sold out 72 hours in advance of game

time. 12 It was enacted in response to complaints from dissatisfied football fans that
were unable to watch the sold out home games of their local teams on public

airwaves due to the NFLs private blackout policy. Public Law 93-107 was applied
to all four major professional sports leagues; however, the statute was

predominantly sanctioned in response to the blackout practice of the NFL. It was

mainly intended as a limited experiment to allow those affected to assess the impact
of the statute. It expired December 31, 1975 and was not renewed. However, the
NFL subsequently continued to follow the practice of blacking out the telecast of

Federal Communications Commission, In the Matter of Sports Blackout Rules,

Notice of Proposed Rulemaking, FCC 13-162, MB Doc. No. 12-3 (2013).
11 S.1841 : An Act to amend the Communications Act of 1934 with regard to the
broadcasting of certain professional sports clubs' games.
12 Federal Communications Commission, In the Matter of Sports Blackout Rules,
Notice of Proposed Rulemaking, FCC 13-162, MB Doc. No. 12-3 (2013).
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home games in a teams home territory only if the game was not sold out 72 hours in
advance of game time.

The Telecommunications Act of 1996 added a new Section 653. The revision

of Section 653 sought to establish a new framework for entry into the distribution
market of the new world of video programming. In return, Section 653 now

directed the Commission to extend the rules of sports blackouts to the distribution

of video programming over open video system. An open video system is defined as,
a facility that consists of a set of transmission paths and associated signal

generation, reception, and control equipment that is designed to provide cable

service which includes video programming and which is provided to multiple

subscribers within a community. 13 However, the Commission later amended its

rules in 1996 to directly apply the existing cable sports blackout rules to open video
systems. 14

Moving into the millennium, in November 2000, the Commission adopted a

sports blackout rule for satellite carriers that provided, by the request of the holder
of the rights to a sports event, a satellite carrier may not retransmit a national
distributed superstation 15 or a network station 16 carrying the live television

Definition Open Video System, 47 C.F.R. 76.1500. A facility consisting of a set of

transmission paths and associated signal generation, reception, and control
equipment that is designed to provide cable service which includes video
programming and which is provided to multiple subscribers within a community,
provided that the Commission has certified that such system complies with this
part.
14 Federal Communications Commission, In the Matter of Sports Blackout Rules,
Notice of Proposed Rulemaking, FCC 13-162, MB Doc. No. 12-3 (2013).
13

A nationally distributed superstation is defined as a television broadcast

station, licensed by the Commission, that: (1) is not owned or operated by or
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broadcast of the sports event to subscribers if the event is not being carried live by a
local television broadcast station.

Advancing ahead, the Commission last examined the sports blackout rules

more than ten years ago, in 2005. In a report to Congress required by the Satellite

Home Viewer Extension and Reauthorization Act of 2004 (SHVERA), it directed the

Commission to complete an inquiry and submit a report to Congress regarding the

impact on competition in the multichannel video programming distribution market

of the current retransmission consent, network non-duplication, syndicated

exclusivity, and sports blackout rules, including the impact of those rules on the

ability of rural cable operators to compete with direct broadcast satellite (DBS)
industry in the provision of digital broadcast television signals to consumers. 17

SHVERA also directed the Commission to include recommendations for statutory

changes relating to rules the Commissions may deem appropriate. In its conclusion
of the report, the Commission stated that the sports blackout rules do not affect
competition between Multichannel Video Programming Distribution Services

(MVPD). According to the Commissions 2014 Notice of Proposed Rulemaking in

affiliated with a television network that, as of January 1, 1995, offered
interconnected program service on a regular basis for 15 or more hours per week to
at least 25 affiliated television licensees in 10 or more states; (2) on May 1, 1991,
was retransmitted by a satellite carrier and was not a network station at that time;
and (3) was, as of July 1, 1998, retransmitted by a satellite carrier under the
statutory license of section 119 of title 17, United States Code.
16 U.S.C. 339(d)(2); 47 C.F.R. 76.120(b). The television broadcast stations that
meet this definition are limited to KTLA-TV (Los Angeles), WPIX-TV (New York),
KWGN-TV (Denver), WSBK-TV (Boston), WWOR-TV (New York) and WGN-TV
(Chicago).
17 Federal Communications Commission, In the Matter of Sports Blackout Rules,
Notice of Proposed Rulemaking, FCC 13-162, MB Doc. No. 12-3 (2013).

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the Matter of Promoting Innovation and Competition in the Provision of Multichannel

Video Programming Distribution Services, the Commission comments on the possible

interpretation of the term MVPD as used in the Communications Act of 1934 and

seek to comment on how each of those interpretations would affect the industry and
consumers. 18 The Act defines MVPD as, [A] person such as, but not limited to, a
cable operator, a multichannel multipoint distribution service, a direct broadcast
satellite service, or a television receive-only satellite program distributor, who

makes available for purchase, by subscribers or customers, multiple channels of

video programming. 19

Shortly after SHVERA, the Satellite Television Extension and Localism Act of

2010 (STELA) was introduced by the Commission. STELA reauthorizes SHVERA by

extending the effectiveness and amending certain provisions in the Communications

Act. 20 These provisions govern the delivery of distant network-affiliated broadcast

television station signals by satellite providers. The implementation of the new

statutory regime, the STELA requires the Commission, within 270 days after the

date of its February 27, 2010 enactment 21, to develop and prescribe by rule a pointto-point predictive model for reliably and presumptively determining the ability of

The Federal Communications Commission, Notice of Purposed Rulemaking in the

Matter of Promoting Innovation and Competition in the Provision of Multichannel
Video Programming Distribution Services, MB Doc. No. 14-261, at 57 (2014).
19 Telegraphs, Telephones, and Radiotelegraphs, 47 U.S.C. 522.
20 Federal Communications Commission, Notice of Proposed Rulemaking in the
Matter of Measurement Standards for Digital Television Signals Pursuant to the
Satellite Home Viewer Extension and Reauthorization Act of 2004, ET Doc. No. 0694, at 49 (2010).
21Section 307 of STELA specifies that the date of enactment is February 27, 2010.
Thus, the deadline for completing this rulemaking is statutorily established as
November 24, 2010.
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10

individual locations, through the use of an antenna, to receive signals in accordance

with the signal intensity standard in Section 73.622(e)(1) or a successor regulation,

including to account for the continuing operation of translator stations and low
power television stations. 22 In addition, Section 73.622 also requires the

Commission to issue an order completing the rulemaking to establish a procedure

for on-site measurement of digital television signal.

The Commissions goal in proposing the model of STELA was to provide a

means for reliably and presumptively determining whether the over-the-air signals
of televisions stations, including low power stations, can be received at individual
locations for purposes of establishing the eligibility of individual households to
receive the signals of distant televisions broadcast network stations from their

satellite carriers. In the Further Notice of Proposed Rulemaking in the Matter of

Measurement Standards for Digital Television Signals Pursuant to the Satellite Home
Viewer Extension and Reauthorization Act of 2004, the Commission stated, we

believe that the proposed predictive model, which is based on the current model for

predicting the intensity of analog television signals at individual locations, will allow
such determinations to be made in a timely and cost effective manner for all parties

involved, including network TV stations, satellite carriers and satellite subscribers.

Catching up to today, the Commission implemented three provisions of the

STELA Reauthorization Act of 2014 (STELAR). Collectively, the provisions: (i)

extend to January 1, 2020 the good faith negotiation requirements applicable to

Federal Communications Commission, Notice of Proposed Rulemaking in the

Matter of Measurement Standards for Digital Television Signals Pursuant to the
Satellite Home Viewer Extension and Reauthorization Act of 2004, ET Doc. No. 0694, at 49 (2010).
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MVPDs and television broadcast stations, and the exclusive contract prohibition

11

applicable to such broadcast stations; (ii) prohibit same-market television broadcast

stations from coordinating negotiations or negotiating on a joint basis for

retransmission consent except under certain conditions; (iii) prohibit a television

broadcast station from limiting the ability of an MVPD to carry into its local market
television signals that are deemed significantly viewed or that otherwise are

permitted to be carried by the MVPD, with certain exceptions. 23 In addition to the

three provisions, STELAR also eliminates the sweeps prohibition 24 in Section

614(b)(9) of the Communications Act of 1934, as amended.

Today, sports leagues blackout policies are usually enforced through

contractual arrangements negotiated between leagues or individual teams that hold

the rights to the games and the entities to which they grant distribution rights. This
includes television networks, local television broadcast stations, Regional Sports

Networks, and MVPDs. In supplementation of the Commissions rules, the privately

contracted relationships required MVPDs to black out games that are required by

the sports leagues or individual teams to be blacked out on local televisions stations.
Recently, the Commission proposed to eliminate the sports blackout rules

due to the drastic changes in the sports industry in the last four decades, mainly

dealing with the switch of the leagues central income avenue. The proposal dealt
House Report 113-518 STELA Reauthorization Act Of 2014
Under current law, cable operators are not permitted to drop broadcast signals
during the weeks when Nielsen Media Research does its major audience
measurements (so called ``sweeps'' weeks). This ensures broadcasters' carriage on
cable systems during the time when Nielsen measures audiences, ensuring that a
retransmission consent dispute does not impact Nielsen ratings and thus
advertising rates.
23
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with the elimination of the sports blackout rules and sought comment on the

potential benefits and damages of action on interested parties, which included

sports leagues, broadcasters, and consumers.

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References

13

Acting Chairwoman Clyburn Statement on Sports Blackout Rule NPRM [Press

release]. (2013, November 1). Retrieved from Federal Communications

Commissions database.

Communications Act of 1934, 47 U.S.C. 307

Constitution and Bylaws of the National Football League. (2006). NFL.

Definition Open Video System, 47 C.F.R. 76.1500.

House Report 113-518 STELA Reauthorization Act Of 2014

Ingraham, N. (2013, December 18). FCC officially proposes removing its 40-year-old
sports blackout rules. Retrieved April 4, 2015, from The Verge website:

http://www.theverge.com/policy/2013/12/18/5224952/fcc-officiallyproposes-removing-its-40-year-old-sports-blackout-rules.

Federal Communications Commission, Notice of Proposed Rulemaking in the Matter

of Measurement Standards for Digital Television Signals Pursuant to the

Satellite Home Viewer Extension and Reauthorization Act of 2004, FCC 10195, ET Docket No. 06-94, at 49 (2010).

Federal Communications Commission, Notice of Proposed Rulemaking in the Matter

of Promoting Innovation and Competition in the Provision of Multichannel

Video Programming Distribution Services, FCC 14-210, MB Doc. No. 14-261,

at 57 (2014).

Federal Communications Commission, In the Matter of Sports Blackout Rules, Notice

of Proposed Rulemaking FCC 13-162, MB Doc. No. 12-3 (2013).

Public Law 93-107, Doc., 1841 Sess. (1973).

THE SPORTS BLACKOUT RULES OF TODAY

Satellite Home Viewer Extension and Reauthorization Act of 2004, Title IX of the

14

Consolidated Appropriations Act, 2005, Pub. L. No. 108-447, 204, 118 Stat
2809, 3393, 3423-24 (2004), codified at 47 U.S.C. 339(c)(1).

Satellite Television Extension and Localism Act of 2010, Title V of the American

Workers, State, and Business Relief Act of 2010, Pub. L. 111-175, 124 Stat.
1218 (2010).

Sports Blackouts Consumer Guide [Pamphlet]. (2015). Washington, DC: The Federal
Communications Commissions.

Telegraphs, Telephones, and Radiotelegraphs, 47 U.S.C. 522.

U.S. v. National Football League et al., 116 F.Supp. 319, 321 (E.D. Pa., 1953) (U.S. v.
NFL I).