Selected Laws Governing the Broadcast of Professional Sporting Events

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Selected Laws Governing the Broadcast of

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Selected Laws Governing the Broadcast of Professional Sporting Events

Summary

Professional sports are a multi-billion dollar industry in the United States. One of the biggest

ways that professional sports organizations like the National Football League (NFL), National

Hockey League (NHL), National Basketball Association (NBA), and Major League Baseball

(MLB) generate revenue is through licensing the rights to telecast (or, more colloquially,

broadcast) their games to the public. These broadcasts may occur on over-the-air broadcast

stations or over cable or satellite systems, and, now, over the Internet.

The licensing rights for the telecast of professional sports programming are treated in a somewhat

unique way under federal law. There are special provisions that apply only to sports programming

that exist in order to support a number of policy goals. Some of these goals include ensuring the

availability of the games of local teams to local audiences and preserving the competitive nature

of professional sports leagues. However, these statutory and regulatory provisions come under

fire occasionally. They are cited as the cause for certain games being “blacked out” (meaning

unable to be broadcast to the public) in some areas of the country when certain conditions are

met. They are also cited as a reason that licensing professional sports programming has become

so expensive that it may be partially responsible for the rising prices of cable and satellite bills.

This report will discuss some of the important federal provisions that specifically affect the

telecasting of professional sporting events.

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Selected Laws Governing the Broadcast of Professional Sporting Events

Contents

Introduction...................................................................................................................................... 1

Antitrust Exemptions ....................................................................................................................... 1

Sports Broadcasting Act of 1961 ............................................................................................... 2

Major League Baseball Antitrust Exemption ............................................................................ 5

Copyright Issues Related to Sports Telecasts .................................................................................. 6

Background on Copyright Law ................................................................................................. 6

Copyright and Sports Broadcasting ........................................................................................... 7

Sports Blackout Rules...................................................................................................................... 9

FCC’s Sports Blackout Rules .................................................................................................... 9

Privately Negotiated Sports Blackouts ...................................................................................... 9

Contacts

Author Contact Information........................................................................................................... 10

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Selected Laws Governing the Broadcast of Professional Sporting Events

Introduction

Professional sports are a multi-billion dollar industry in the United States. One of the biggest

ways that professional sports organizations like the National Football League (NFL), National

Hockey League (NHL), National Basketball Association (NBA), and Major League Baseball

(MLB) generate revenue is through licensing the rights to telecast (or, more colloquially,

broadcast)1 their games to the public.2 These telecasts may occur on over-the-air broadcast

stations or over cable or satellite systems, and, now, they may also happen over the Internet.

The licensing rights for the telecast of professional sports programming are treated in a somewhat

unique way under federal law. There are special provisions that apply only to sports programming

that exist in order to support a number of policy goals. Some of these goals include ensuring the

availability of the games of local teams to local audiences and preserving the competitive nature

of professional sports leagues. However, these statutory and regulatory provisions come under

fire occasionally. They are cited as the cause for certain games being “blacked out” (i.e.,

unavailable on television) in some areas of the country when certain conditions are met.3 They are

also cited as a reason that licensing professional sports programming has become so expensive

that it may be partially responsible for the rising prices of cable and satellite bills.4 This report

will discuss some of the important federal provisions that specifically affect the telecasting of

professional sporting events.

Antitrust Exemptions

Two of the most important federal provisions that apply to the telecast of professional sports

programming are the antitrust exemptions for the pooled licensing of sponsored telecasting of

games by most professional sports organizations and the judicially created antitrust exemption

that applies to Major League Baseball. Professional sports teams and their associated leagues are

participants in a unique market. Technically, each team is competing against the other teams. In

most markets, like a market for selling personal computers, each participant would be trying to

create a better product in order to lure more customers away from their competitors. To some

extent, this is the case in professional sports, but it is not entirely analogous.

At the most basic level, a sports team needs someone with whom to play the game. It is essential

to the existence of the Boston Red Sox that the New York Yankees also exist for the Red Sox to

play against. However, it is not enough for the Yankees or the Washington Nationals to exist.

They must also be able to play on roughly the same level as the Red Sox. Said in a different way,

if the Philadelphia Eagles won the Super Bowl in a landslide game every year, the entire sport of

When referring to negotiating the rights to transmit games to the public, this report will refer to the transmission as a

telecast. The term “broadcast’ will be reserved for telecasts that occur via over-the-air broadcast outlets.

See, John Ourand, How High Can Rights Fees Go, Sports Business Daily (June 6, 1011),

http://www.sportsbusinessdaily.com/Journal/Issues/2011/06/06/In-Depth/Rights-Fees.aspx.

See, e.g., Michael McCarthy, FCC Reviewing Sports Blackout Rules, USA Today (January 12, 2012),

http://content.usatoday.com/communities/gameon/post/2012/01/fcc-reviewing-sports-tv-blackout-rules-nfl-federalcommunications-commission/1#.Ua4HAMpxnXk. See also, 47 C.F.R. §§76.111 – 76.130.

Derek Thomson, Mad About the Cost of TV? Blame Sports, The Atlantic (April 2, 2013), http://www.theatlantic.com/

business/archive/2013/04/mad-about-the-cost-of-tv-blame-sports/274575/.

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professional football would suffer as the losing teams would likely lose revenue, and fans, in

general, would almost certainly lose interest. Such circumstances could lead to the end of weaker

franchises, and possibly the end of the entire league.

The professional sports leagues and Congress have found that professional sports teams do best

overall when competition among the teams is more even. Sometimes ensuring more even

competition among the teams means ensuring more even distribution of revenue among the

competitors in the league. However, occasions in which competitors in a marketplace agree to

share revenue or pool their resources may raise antitrust concerns.5 In order to allay the concerns

of professional sports teams that feared running afoul of the antitrust laws, certain antitrust

exemptions allow professional sports leagues to act in concert, in certain contexts, without fear of

violating the antitrust laws’ prohibitions against collusion among competitors.

Sports Broadcasting Act of 1961

Congress passed the Sports Broadcasting Act in 1961 in order to enable member teams of

professional sports leagues to pool their separate rights to broadcast their games and to share the

revenue from the pooled sale of those rights, without fear of violating the antitrust laws.6 The

operative portion of the act states that 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 league’s 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.7

The perceived need for the explicit exemption arose from court decisions that had prevented the

NFL from pooling the rights to broadcast the games of member teams. Cases brought against the

NFL by the Department of Justice (DOJ) had declared such pooling by the NFL a violation of the

antitrust laws.8 The cases created an anomalous situation in which the MLB, NBA, and NHL

could pool the rights to broadcast their games and enter into contracts with broadcast networks on

that basis, but the NFL could not.9

Congress responded to this disparity with the Sports Broadcasting Act (SBA). The House

Judiciary Committee report on the bill that enacted the SBA reveals that Congress was

particularly concerned about preserving parity among professional sports teams.10 Allowing teams

to pool and then share revenue from the rights to telecast the games was considered essential to

preserving team parity by providing adequate amounts of income from television rights for games

The Sherman Antitrust Act prohibits collusion among competitors that unreasonably restrains trade. 15 U.S.C. §1.

P.L. 87-331, 87th Cong.

15 U.S.C. §1291. Section 1291 of the act was also subsequently amended to allow for the merger of the National and

American Football Leagues in 1966.

U.S. v. National Football League, 116 F. Supp. 319 (E.D. Pa. 1953); U.S. v. National Football League, 196 F. Supp.

445 (E.D. Pa. 1961).

See, U.S. Congress, House Committee on the Judiciary, Telecasting of Professional Sports Contests, report to

accompany H.R. 9096, 87th Cong., 1st sess., H. Rept. 1178, at 3 (1961).

Id.

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played by all teams, including less lucrative clubs, and for games played away from home for all

clubs.

According to the report, “the [Judiciary Committee] believe[d] that the public interest in viewing

professional league sports [warranted] some accommodation of antitrust principles in order to

avoid” the possibility that weaker teams could founder without adequate income from television

rights, an effect which could threaten the structure of professional sports leagues.11 The

committee viewed the exemption in the SBA to be a minor and narrow exemption from antitrust

laws that would create a public benefit by preserving competition among teams in professional

sports leagues.

The first section of the SBA is likely the most important. It is the section that authorizes

professional sports teams to pool their “sponsored telecasting” rights, as quoted above, and

exempts these joint agreements made by the leagues from the antitrust laws.12 Various judicial

interpretations have clarified the scope of this exemption. According to a 1988 decision by the

Second Circuit, the exemption does allow for multiple pooled-rights contracts.13 In other words,

the exemption does not mean that a league must license the rights to all of its games to only one

programming provider; instead, a league may separate different groups of games and license

those rights to different programming providers as the league sees fit.

It is also important to note that the exemption appears to apply only to joint agreements made by

a league. According to a district court case, the SBA does not apply to the rights an individual

team might negotiate to license the right to broadcast its games on broadcast stations.14

Furthermore, according to the court, the SBA also does not apply to any attempts by a league to

limit the ability of individual teams to license the telecast of games independently of the league.

Individual team licenses of telecasts and any attempt by leagues to limit them, therefore, appear

to remain covered by the antitrust laws.15

Lastly, the exemption is limited to the pooled sale of the rights to “sponsored telecasts.”16 In

general, the term “sponsored telecasts” appears most clearly to mean telecasts that are paid for by

the sale of advertisements, and offered free to the public via over-the-air broadcast, and via

retransmission of those broadcast signals by cable and satellite service providers. There exists

some question as to whether the phrase “sponsored telecasting of the games” also covers pooled

sales of the telecasting rights to cable channels, like the pooled sale of the rights to telecast

Monday Night Football to ESPN.17

Id. The Senate Judiciary Committee expressed similar concerns in its report, as well. U.S. Congress. Senate

Committee on the Judiciary, Telecasting Professional Sports Contests, report to accompany H.R. 9096, 87th Cong., 1st

sess., S.Rept. 1087, at 3 (1961).

15 U.S.C. §1291.

U.S. Football League v. National Football League, 842 F.2d 1335, 1353 (2d Cir. 1988).

Chi. Prof’l Sports v. National Basketball Assoc., 754 F. Supp. 1336, 1352 (N.D. Ill. 1991), aff’d, 961 F.2d 667 (7th

Cir. 1992), reh. den.; cert. den., 506 U.S. 954 (1992).

Id.

15 U.S.C. §1291.

See, Dean A. Rosen, Back to the Future Again: An Oblique Look at the Sports Broadcasting Act of 1961,

Entertainment Law Reporter, Volume 13, No. 5 (October 1991); Philip R. Hochberg, The Case of the Lost Exemption:

Antitrust Law May Apply to the NFL/ESPN Deal, Entertainment Law Reporter, Volume 10, No. 2 (July 1988).

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Selected Laws Governing the Broadcast of Professional Sporting Events

This question arises because cable channels, like ESPN, receive revenue from two sources: the

sponsors of the programming and a per subscriber fee from the cable and satellite companies that

carry the channel’s programming. It is unclear whether a program that is not funded exclusively

by sponsors of the programming will qualify as “sponsored telecasting” under the statute. Though

the Department of Justice never challenged the Monday Night Football contract with ESPN as a

violation of the antitrust laws, an Assistant Attorney General, in a letter to Senator Arlen Specter

in 1988, declared that the view of the DOJ at the time was that the contract was not covered by

the SBA antitrust exemption, and was therefore subject to the antitrust laws.18 Furthermore, at

least one district court has also construed the meaning of “sponsored telecasting” narrowly to

include only over-the-air broadcasts, and denied the application of the exemption to cable

telecasts of games because cable telecasts were not “sponsored telecasts.”19 Specifically, the court

said that the SBA exemption was available only to “free commercial television” and not to

“subscription television.”20 The case eventually settled out of court.21 In another case that also

eventually settled out of court, a different federal district court, along with the Third Circuit Court

of Appeals, refused to apply the antitrust exemption in the SBA to the NFL’s sale of a

programming package to a satellite television company.22

As a result, while the question of whether “sponsored telecasts” under the SBA includes cable and

satellite telecasts remains unsettled, it appears that courts and the DOJ are inclined to construe the

exemption narrowly and refuse to apply the exemption to the pooled sale of telecast rights to

cable and satellite television providers. However, it should be noted, that simply because the

antitrust laws may apply to the pooling and licensing of these rights to cable and satellite

television providers, that does not mean that these licensing agreements necessarily violate the

antitrust laws. The determination of whether a particular contract or agreement violates the

antitrust laws can only be made by a court following a trial on the merits of a particular case.

The other sections of the SBA carve out important limits on the antitrust exemption described

above. The first preserves the ability of sports leagues to institute some blackouts of games in the

home territory of any team, while still availing themselves of the SBA antitrust exemption.23 The

act states that the exemption does not apply to contracts that limit a buyer’s right to telecast

games into any territory unless the prohibition applies to the telecasting of a game into a team’s

home territory when the team is playing a home game. The second attempts to preserve Friday

night as the night reserved for high school games and Saturday as the day for college games by

making the exemption unavailable to contracts that permit the telecast of professional games on

those days, as long as the high school and college game schedules were announced by a particular

day each year.24 Lastly, the SBA makes clear that the antitrust exemption granted by the act is

Id.

Chi. Prof'l Sports v. NBA, 808 F. Supp. 646, 649-50 (1992). This decision is a part of a series of decisions in this

case, one of which is also cited supra, note 14.

Id.

For further discussion of this case and the history of court interpretation of the term “sponsored telecasting” in the

SBA, see Lacie L. Kaiser, Note and Comment: Revisiting the Sports Broadcasting Act of 1961: A Call for Equitable

Antitrust Immunity from Section One of the Sherman Act For All Professional Sport Leagues, 54 DEPAUL L. REV.

1237 (2005).

Shaw v. Dallas Cowboys Football Club, Ltd., No. 97-5184, 1998 U.S. Dist. LEXIS 9896, at 1 (E.D. Pa. June 19,

1998), aff'd, 172 F.3d 299 (3d Cir. 1999).

15 U.S.C. §1292.

15 U.S.C. §1293.

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narrow, and does not exempt the professional sports leagues from the application of the antitrust

laws in any other way.25

Major League Baseball Antitrust Exemption

Baseball is the only professional sport that enjoys a general exemption from the antitrust laws.

The exemption appears to be a result of an historical accident, related to judicial interpretation,

rather than a deliberate act of Congress to grant a statutory exemption to baseball. Nonetheless,

the exemption persists. In 1922, in a case captioned Federal Baseball v. National League, the

Supreme Court held that the business of displaying “exhibitions of baseball” did not fall under the

definition of commerce for the purposes of the antitrust laws.26 Since this decision, the Court has

repeatedly affirmed the existence of the exemption, but has also repeatedly expressed that the

exemption is an anomaly that perhaps should no longer exist.27 Nonetheless, the Court has stated

that the “inconsistency or illogic” of the antitrust exemption for baseball is an issue that should be

resolved by Congress, rather than the Court.28

While Congress has considered repealing baseball’s antitrust exemption in the past,29 it has never

taken the final step of enacting legislation. As a result, baseball continues to exist outside of the

reach of the antitrust laws, while all other professional sports leagues are subject to the antitrust

laws, but for the narrow exemption provided by the Sports Broadcasting Act.

As discussed above, there may be controversy over whether the antitrust exemption provided in

the SBA for the pooled licensing of telecasting rights applies to the licensing of these rights to

cable programming providers, on the theory that such a sale may not fall within the SBA’s

requirement for “sponsored telecasts.” If it is the case that sponsored telecasting does not include

the sale of pooled telecasting rights to cable channels in the antitrust law exemption, then the

general antitrust exemption enjoyed by Major League Baseball could cover the MLB’s pooled

sale of telecasting rights to cable and satellite television providers. However, most courts are

reluctant to interpret baseball’s antitrust exemption so broadly, particularly considering the fact

that it is the only professional sport to enjoy such an exemption. Instead, most courts interpret the

exemption to cover only actions the league takes to support and protect the structure of the

league.30 In a case examining whether the broadcasting of baseball over the radio was covered by

the antitrust exemption, the Southern District of Texas determined that radio broadcasting was not

so essential to baseball as to warrant application of the exemption.31 This reasoning appears to

extend to the cable and satellite telecasting context, and courts appear willing to entertain antitrust

suits against the MLB for the pooled sale of their broadcasting rights to MVPDs.32 Therefore, it

15 U.S.C. §1294.

259 U.S. 200 (1922).

See, Toolson v. New York Yankees, Inc., 346 U.S. 256, 357 (1953); Flood v. Kuhn, 407 U.S. 258, 284 (1972).

Flood, 407 U.S. at 284.

See, House Select Committee on Professional Sports, 94th Cong, Inquiry into Professional Sports (January 3, 1977) at

60.

Joseph R. McMahon, Jr. and John P. Rossi, A History and Analysis of Baseball’s Three Antitrust Exemptions, 2

VILL. SPORTS & ENT. L. FORUM 213 (1995).

Henderson Broadcasting v. Houston Sports, Assoc., 541 F. Supp. 263 (1982).

See, e.g., Laumann v. NHL, 907 F.Supp. 2d 465 (SDNY 2012) (refusing to dismiss a complaint filed against the

NHL and MLB for violations of the antitrust laws in the sale of the rights to out-of-market games).

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seems that the antitrust exemption for baseball may not apply in the context of the telecasting of

baseball games.

Background on Copyright Law

works of creative expression, such as books, movies, photography, art, and music, that are “fixed”

in a tangible medium of expression.33 The Copyright Act34 frequently employs legal “terms of

art,” such as “fixed,” that often have meanings that differ from ordinary usage in everyday

language. In this case, the Copyright Act provides that “[a] work is fixed in a tangible medium of

expression when its embodiment in a copy ... is sufficiently permanent or stable to permit it to be

perceived, reproduced, or otherwise communicated for a period of more than transitory

duration.”35

A “copyright holder” is usually the creator of a copyrighted work; alternatively, the copyright

holder could be the employer of the creator or be assigned legal title to the copyright by the

creator.36 The Copyright Act bestows upon the copyright holder several exclusive legal

entitlements, which together provide the holder with the right to determine whether and under

what circumstances the protected work may be used by third parties. These exclusive rights

include the right to reproduce copyrighted content, distribute copies of copyrighted material, or

publicly perform copyrighted work.37

Therefore, a third party wishing to use copyrighted material must either (1) obtain the permission

of the copyright holder (usually granted in the form of a license agreement that establishes

conditions of use and an amount of monetary compensation known as a royalty fee); (2) comply

with the terms of “compulsory” or statutory licenses established by law; or (3) assert that such use

falls within the scope of certain statutory limitations on the exclusive rights such as the “fair use”

doctrine.38

written contract.39 Unauthorized use of a copyrighted work by a third party in a manner that

implicates one of the copyright holder’s exclusive rights constitutes infringement.40 The copyright

17 U.S.C. §102(a).

17 U.S.C. §§101 et seq.

17 U.S.C. §101. Furthermore, the Copyright Act defines “copies” to mean “material objects ... in which a work is

fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or

otherwise communicated, either directly or with the aid of a machine or device.” Id.

17 U.S.C. §201.

17 U.S.C. §106.

17 U.S.C. §107. “Fair use” recognizes the right of the public to make reasonable use of copyrighted material, in

certain instances, without the copyright holder’s consent. The “fair use” provision of the Copyright Act recognizes fair

use “for purposes such as criticism, comment, news reporting, teaching, scholarship, or research.” Id.

17 U.S.C. §§201(d), 204(a).

17 U.S.C. §501.

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holder may file a lawsuit against an alleged infringer for a violation of any of the exclusive rights

conferred by copyright and obtain monetary and injunctive relief.41

In the Copyright Act of 1976 (which is the current statute governing U.S. copyright law),

Congress specifically extended copyright protection to sports telecasts when it provided in the act

that “[a] work consisting of sounds, images, or both, that are being transmitted, is ‘fixed’ [for

purposes of the Copyright Act] if a fixation of the work is being made simultaneously with its

transmission.”42 Thus, for live sports telecasts to be eligible for legal protection under copyright

law, the television broadcast of the sporting event must be “fixed” (that is, recorded onto

videotape, film, or other media format) simultaneously with its live transmission. Once the sports

broadcast is “fixed” in this manner, it would fall into the subject matter category “motion pictures

and other audiovisual works” to which the Copyright Act offers protection.43

Among the exclusive rights granted to copyright holders, the public performance right is the one

that is essential to the television broadcasting of professional sporting events. Under the

copyrighted work, either directly or by means of any device or process.45 Public performance not

only covers the initial rendition, but also any further act by which the rendition is transmitted or

communicated to the public. Infringement of this right would occur if a third party engages in

public performance of the copyrighted work without the consent of the copyright holder.

The holder (or owner) of the copyright in telecasts of live sports programming is generally the

sports leagues or individual sports clubs. However, sports teams/leagues may choose to enter into

contractual agreements with television broadcasters that provide the broadcasters with a license to

publicly perform (that is, broadcast) their games. The legislative history of the Copyright Act of

1976 includes several passages that appear to reveal that representatives of the sports leagues and

broadcasters understood that sports leagues or teams would be entitled to own the copyright to

sports telecasts. For example, Pete Rozelle, the commissioner of the NFL at the time, testified

before a House Judiciary subcommittee in 1965 that “[w]e must have copyright protection if we

are to reestablish our right to sell and to broadcast our programs in accordance with our proper

ownership rights.”46 At a 1975 congressional hearing, the then-general counsel of the National

Association of Broadcasters, John Summers, engaged in the following colloquy with

Representative Robert Kastenmeier:

17 U.S.C. §§502-505.

17 U.S.C. §101.

17 U.S.C. §102(a)(6).

The Copyright Act defines a public performance of a copyrighted work to mean: “(1) to perform a work at a place

open to the public, or at any place where a substantial number of persons outside a normal circle of a family and its

social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance of the work to a place

specified by clause (1) or to the public by means of any device or process, whether the members of the public capable

of receiving the performance receive it in the same place or in separate places and at the same time or at different

times.” 17 U.S.C. §101.

17 U.S.C. §§106(4), 101.

Hearing on H.R. 4347 Before the House Subcomm. No. 3 of the Comm. on the Judiciary, 89th Cong., 1st Sess., at

1825-26 (1965) (testimony of Pete Rozelle, Commissioner of the National Football League).

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Mr. Kastenmeier: One of my questions is who, in fact, is the copyright holder? Who is the

creator, author, of this work? In the case of a professional baseball game, transmitted over,

let us say, a network instantaneously, whether it is ephermerally recorded or not?

Mr. Summers: Well, I guess the club, or the league, is the copyright holder, but the station

has purchased the right to broadcast that game, usually at a very large sum of money.47

Nevertheless, the federal appeals court in National Association of Broadcasters v. Copyright

Royalty Tribunal recognized that broadcasters may have some “copyrightable interests” in the

sports telecast:

Anyone who has ever watched ABC’s Monday Night Football ... knows that the commentary

of the announcers and such effects as instant replay in slow motion add immensely to the

quality of a sports telecast. Similarly, there is little doubt that the efforts used in juggling

programs and compiling a broadcast day constitute a copyrightable interest under the

[Copyright] Act.48

Such “copyrightable interests” are relevant when determining the broadcaster’s share of royalties

that are paid by cable television providers for the right to retransmit the copyrighted sports

telecasts to their subscribers. Section 111 of the Copyright Act (17 U.S.C. §111) establishes a

“compulsory license” that cable systems may rely upon if they wish to retransmit over-the-air

television broadcast signals to their subscribers. “Compulsory” licenses are a limitation on

statutory licenses compel copyright owners to allow third parties to use creative works under

certain conditions and according to specific requirements, in exchange for payment of royalty

fees at a rate usually determined by a federal government body known as the Copyright Royalty

Board. A user of a statutory license need not obtain or negotiate permission for using a

copyrighted work from the copyright owner; that permission is “compulsory.” Thus, the owners

of the copyright to sports telecasts (the sports teams or leagues) cannot refuse to allow such

retransmission, nor are the cable operators required to voluntarily negotiate with the copyright

owners to obtain their consent or to establish a royalty fee. The appellate court in National

Association of Broadcasters described the “quid-pro-quo” of the Section 111 compulsory license

as follows:

Section 111 of the Copyright Act of 1976 ... requires cable operators to pay royalties to the

creators of copyrighted program material that is used by the cable systems. Congress

recognized, however, that it would be impractical to require every cable operator to negotiate

directly with every copyright owner. Accordingly, the [Copyright] Act mandates two steps in

this process. First, cable operators are required to obtain a copyright license and periodically

pay royalty fees into a central fund (the Fund). Second, the [Copyright Royalty Board] is

then required to distribute royalty fees deposited ... under section 111 and ... determine, in

cases where controversy exists, the distribution of such fees.49

Hearing on H.R. 2223 Before the House Subcomm. on Courts, Civil Liberties, and the Admin. of Justice of the

Comm. on the Judiciary, 94th Cong., 1st Sess., at 785 (1975) (colloquy between Representative Kastenmeier and Mr.

Summers).

675 F.2d 367, 378 (D.C. Cir. 1982) (citation omitted).

Id. at 371 (citations omitted).

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Sports Blackout Rules

Sports blackout is a term that refers to occasions where particular professional sports games are

not available to be viewed on television in a particular market, usually the home territory of the

professional sports team located within that market. They are very controversial and a source of

great irritation for sports fans.50 There are two kinds of sports blackout rules. The first are the

sports blackout rules that are enforced by the Federal Communications Commission (FCC).

These rules apply to a narrow subset of games. The second, and more common reason that a

particular game is not available in an area, are blackout rules that are agreed upon between the

league and the multivideo programming distributor (MVPD) that has purchased the right to

distribute the games. These private agreements are the cause of most sports blackouts in the

United States.51

FCC’s Sports Blackout Rules

The FCC’s sports blackout rules prevent cable and satellite networks from telecasting sporting

events in a particular area when a local broadcast station has negotiated with the league to possess

the exclusive rights to broadcast that sporting event in that area.52 The rules apply only to cable

systems with more than a thousand subscribers and satellite systems with more than 1,000

subscribers in the applicable zip code.53 Furthermore, the blackout rules only apply to

programming that has originated on a broadcast signal.54 The circumstances in which these

blackout rules may apply are narrow, and, according to the FCC, the rules are not the cause of

most sports blackouts.55 Nonetheless, some consumer groups have appealed to the FCC to repeal

these regulations, and the FCC has agreed to review whether the rules should be revised or

repealed.56 The FCC proceeding to review whether the blackout rules should be repealed was

open to public comment in January of 2012, and has not yet completed.

Privately Negotiated Sports Blackouts

Each sports league has different rules about when and why one of its games might be blacked out

in a particular area. One of the more famous reasons for blacking out a game in an area is when

tickets to the event do not sell out. In that event, the game would be blacked out in the team’s

home territory.57 Such a rule was conceived, presumably, to preserve the income that attends

Michael McCarthy, FCC Reviewing Sports Blackout Rules, USA Today (January 12, 2012),

http://content.usatoday.com/communities/gameon/post/2012/01/fcc-reviewing-sports-tv-blackout-rules-nfl-federalcommunications-commission/1#.Ua4HAMpxnXk.

FCC. Sports Blackouts, http://www.fcc.gov/guides/sports-blackouts.

47 C.F.R. §§76.111 – 76.130.

Id.

FCC. Sports Blackouts, http://www.fcc.gov/guides/sports-blackouts.

FCC, Public Notice, Commission Seeks Comment on Petition For Rulemaking Seeking the Elimination of the Sports

Blackout Rule, Media Bureau, MB Docket No. 12-3 (January 12, 2012) available at http://transition.fcc.gov/

Daily_Releases/Daily_Business/2012/db0112/DA-12-44A1.txt. See also, Michael McCarthy, FCC Reviewing Sports

Blackout Rules, USA Today (January 12, 2012), http://content.usatoday.com/communities/gameon/post/2012/01/fccreviewing-sports-tv-blackout-rules-nfl-federal-communications-commission/1#.Ua4HAMpxnXk.

See, Michael McCarthy, FCC Reviewing Sports Blackout Rules, USA Today (January 12, 2012),

(continued...)

Congressional Research Service

Selected Laws Governing the Broadcast of Professional Sporting Events

ticket sales to the game. However, this is not necessarily the only way or reason that games may

be blacked out. The terms of these blackouts are privately negotiated between the leagues and the

programming providers.58

As the FCC has pointed out, it has no authority to review these contracts.59 Furthermore, the

Sports Broadcasting Act allows the application of the SBA’s statutory antitrust exemption to

contracts that include prohibitions on the telecasting of games into a team’s home territory when

the team is playing a home game.60 Therefore, it seems that federal law does allow certain

privately negotiated sports blackouts, but does not provide for federal supervision of these

privately negotiated contracts. According to the FCC, the best recourse, currently, for consumers

who are unhappy that a game has been blacked out in their area, is for the consumer to contact the

broadcast or other system that has blacked out the game in an attempt to determine why the

decision was made.61

Author Contact Information

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov, 7-....

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov, 7-....

(...continued)

http://content.usatoday.com/communities/gameon/post/2012/01/fcc-reviewing-sports-tv-blackout-rules-nfl-federalcommunications-commission/1#.Ua4HAMpxnXk.

FCC. Sports Blackouts, http://www.fcc.gov/guides/sports-blackouts.

Id.

15 U.S.C. §1293.

FCC. Sports Blackouts, http://www.fcc.gov/guides/sports-blackouts.

Congressional Research Service

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