NFL's Pushback on Blackout Ruling Amounts to Empty Threats

The FCC is set to vote down a long-standing blackout rule, and the league's claims it could cause games to move to pay TV are overblown.

When the Federal Communications Commission votes to end the NFL's blackout powers, the league will lament the demise of its long-despised policy—and continue to sound warnings that the ruling will open the floodgates for the migration of NFL games from free broadcast TV to cable.

At present, the National Football League prevents local broadcasters from showing games that don't meet a certain attendance threshold. That policy was put in place in 1975, when teams depended on high attendance for revenue. Threatening to withhold TV broadcasts, it was thought, would encourage fans to come to the stadium.

Since then, the league's TV revenues have climbed steadily, to the point where "every single NFL team pays for its entire operation cost by TV," said the University of Michigan's Rodney Fort, whose studies on the economics of blackouts have been presented before the FCC.

An FCC rule that the agency plans to do away with stops cable and satellite carriers in blacked-out broadcast markets from showing the games, either.

Without that rule, the NFL says, pay TV companies will gain leverage with their ability to show games that over-the-air broadcasters can't. Soon, the league's long-touted airing of every game on free TV could be in jeopardy.

Economists disagree.

"There's neither form for logic nor function to what they're claiming," Fort said. "This over-the-air broadcasting thing is a red herring. It's designed to get [broadcast TV viewers] up in arms."

From that standpoint, at least, the NFL's approach seems to have worked. Its pro-blackout site, designed to look like a fan advocacy group, urges fans to "help keep NFL games on free, broadcast television"—and hundreds have filed comments in support of the rule to the FCC. But almost everyone expects the FCC to strike it down anyway—and by a wide margin.

"Tens and tens of thousands of people in any location" watch games over the air, Fort said. "You're not gonna get a substantial portion of those folks to move." Any gains that would be made by switching to cable would be more than offset by the loss of those viewers.

"The logic that they're putting forth is so easy to overcome, and the data they're putting forth is so easy to overcome," Fort said.

Fort was part of a team of nine economists whose studies for the FCC helped undermine the NFL's blackout claims. Another, Daniel Durbin of the University of Southern California, agreed with his assessment of the league's likelihood to switch to cable. "It's a bunch of hyperbole," he said. "It's unlikely that it will start drifting toward pay TV."¦ The NFL is posturing a lot. I wouldn't take that claim seriously."

Having games several nights a week available to everyone with a TV is important for the league's quest to retain its position as America's dominant sport, Durbin said. "The game itself is in everybody's lap, and you can't turn your eyes from it," he said, contrasting football with other sports that have gradually shifted broadcasts to pay TV and faded as a result. "Only people who have enough interest to seek it out will seek it out."

That broadcast dominance, and the billions of dollars networks pay to air the NFL's games, means the NFL's pay-TV play is less of a serious threat than "an appeal to a scared constituency," Fort said. Their hope is that enough broadcast TV viewers will become alarmed at the prospect of losing games that they will raise pressure on regulators to preserve the rule.

While some have indeed followed the NFL's bidding, the general populace seems to be firmly against the rules that have kept dozens of games off the air in just the past few years. That's evidenced by the fact that lawmakers—led by Sens. Richard Blumenthal and John McCain—have been among the most outspoken opponents of the blackout rules, likely in no small part due to pressure from their constituents.

The Sports Fan Coalition is a D.C. lobby that has made blackouts its signature issue. "On my tombstone somewhere it will read, 'Helped get rid of the sports blackout rule,' " said David Goodfriend, the group's chairman.

He, too, doesn't see the logic in the NFL's claims. "They are not going to walk away from millions of dollars in broadcast revenue in order to sell a few thousand more tickets," he said. To Goodfriend, the fact that the NFL is protected by federal rules that prevent fans from seeing games should be an affront to taxpayers who support the league through stadium subsidies and tax exemptions.

"The reason the NFL fought so hard against this effort is that they know it's the first domino to fall," he said. "It is open season to examine public subsidization of professional sports."

And while the NFL is keeping its focus on the possibility of a pay-TV shift, most think the FCC ruling will be the end of blackouts altogether. If fans can watch the games on cable (or their friend's cable or a bar) anyway, why lose advertising money by blocking the over-the-air broadcast?

"It would kill the point of [blackouts]," Durbin said. "If they black it out, they're going to lose a significant amount of revenue."

Fort believes the NFL probably realizes it's fighting a losing battle on blackouts, but it wants to establish the precedent that it's against the government having a say in how it airs its games. "It appears that this is much more about the absolute control of the position of every game in every media space," he said. "They literally are going to make much more money if they have complete control over where every broadcast appears."

The NFL and the National Association of Broadcasters, which has also defended blackout rules, did not respond to requests for comment.