New Sports Illustrated Column on NFL Network and Cable Industry

I had the Viewpoint Column on SI.com a few days ago, and my piece centered on the consumer and antitrust implications of the legal and business battles between the NFL and major cable companies. Here's an excerpt:

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Some of these fans can still watch those contests because every NFL Network game that sells out -- and all 32 previous ones were sold out -- is simultaneously broadcast on free, over-the-air TV in the primary market of the home and away teams. But those fans who live in non-primary markets (generally defined as those living outside a 75-mile radius of the team's stadium) are out of luck. Their only option, should it be available to them, would be to switch from a cable provider to a satellite provider that offers NFLN. For a variety of reasons, possibly including convenience, cost and reliability, those fans may prefer to keep their cable provider.

There are about 56.3 million households with NFLN, a significant but underwhelming number when considering that the two-year-old MLB Network already has 55.3 million households, while the three-year old NHL Network, which offers coverage of a considerably less popular league than the NFL, has approximately 34 million. The NFL, of course, would like more homes to have its channel, which the league spent in excess of $100 million developing. But the league has encountered difficulties in convincing cable companies to include NFLN in its channel packages, particularly basic packages. The major holdup has been over price.

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The NFL can offer several responses to those lines of critique. For one, games aired on NFLN are broadcast nationally and thus have a wider viewership than regionally-televised games aired on free, over-the-air networks. The NFL can also highlight that while games aired on NFLN require payment to a cable or satellite provider, they are simultaneously broadcast on free, over-the-air networks (provided the games are sold out) in the home and away teams' primary media markets.

Had the Supreme Court decided American Needle v. NFL in favor of the NFL earlier this week, the league might have received antitrust immunity for NFLN. But the Supreme Court held that the NFL and its teams are not exempt from Section 1 for purposes of apparel sales and, by implication, other types of business endeavors. The NFL and its teams, along with the NBA, MLB and NHL and their respective teams, do enjoy a limited exemption from Section 1 for sports broadcasting, but it is similarly unhelpful to the NFL in this context. Through the Sports Broadcasting Act of 1961, leagues are exempt from Section 1 scrutiny of their national TV contracts with network providers of free, over-the-air games. Unfortunately for the NFL, the exemption does not extend to contracts between leagues and cable and satellite stations that are only available for a charge, meaning NFLN can be reviewed under Section 1.

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To read the rest, click here. For related Sports Law Blog posts, see Mark Conrad's Broadcasting the Patriots - Giants game and Gabe Feldman's The NFL Loses its Voice.

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