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The United States House Judiciary Committee (the “Committee”) has turned its attention to the evolving sports broadcasting landscape, questioning whether a law designed more than six decades ago is still adequate to address the realities of today’s broadcasting market.
Earlier this month, the Committee Chairman Jim Jordan and Scott Fitzgerald, sent letters to the commissioners of the Big Four sports leagues – the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), and the National Hockey League (NHL) – requesting briefings on how each league respectively participates in the sports broadcasting market and how antitrust exemptions affect that participation. At the heart of this inquiry is the Committee’s review of the “sufficiency of federal laws related to the ‘protection of trade and commerce against unlawful restraints and monopolies,’” and specifically the 1961 Sports Broadcasting Act.
Enacted 64 years ago—long before the rise of digital streaming—the Sports Broadcasting Act (SBA) preemptively granted the NFL, MLB, NBA, and NHL an antitrust exemption for agreements relating to the sponsored telecasting of their games. When Congress passed the SBA, it was initially seen as a potential remedy for major sports leagues because of the perceived market power of network broadcasters, and concerns regarding competition for limited airtime that could result in an imbalance in profitability for the leagues’ smaller teams, potentially hurting competition.
To address this, the SBA included a blackout provision that allows professional sports leagues to prevent games from being televised in a team’s home territory on days when the team is playing at home, thereby encouraging in-person attendance and protecting ticket sales. Under the SBA, leagues also have the ability to pool their television rights and revenue without raising antitrust concerns.
The Committee investigation suggests concerns that what was once viewed as a remedy may now result in unintended consequences. The SBA’s antitrust exemption, which only applies to sponsored telecasting, did not anticipate a landscape where streaming platforms and digital distribution dominate how fans watch live sports.
Despite rapid technological change, the Committee highlighted that,
“. . .it is sometimes more difficult and more expensive for some fans to watch their teams during the season. In some major sports leagues, a fan may need to sign up for multiple streaming platforms and purchase an over-the-air antenna to watch every game at home. Even then, because every major sports league has its own blackout restrictions, there are certain games that fans cannot watch at home regardless of how much they are willing to pay or how many streaming services they purchase.”
The Committee noted that courts have grappled with the language of the SBA in a more modern society, finding that the SBA “does not exempt sports leagues from antitrust liability when it comes to distribution channels where subscribers pay a fee, such as cable television, satellite, pay-per-view, or digital streaming services.”
This has led the Committee to warn that most of the Big Four leagues’ current distribution agreements are now potentially subject to antitrust challenges, creating “legal uncertainty, distorting the market, and ‘effectively expanding the blind spot for potential antitrust violations.’” The Committee has requested responses from the Big Four sports league commissioners this month, suggesting an expedited review by the Committee of whether and to what extent the SBA still makes sense in such a robust digital world.
The House Judiciary Committee’s recent scrutiny of the Sports Broadcasting Act is just the latest example of increased antitrust attention in the US sports sector, and on sports broadcasting specifically – from Chairman Jordan and the Judiciary Committee’s recent Formula 1 investigation, to Fubo’s private antitrust litigation challenging a sports-focused streaming package on monopolization grounds. See our article, Flag on the play: SDNY District Court grants preliminary injunction halting joint venture set to offer a “skinny” sports bundle package, citing antitrust concerns.
Taken together, these developments reflect mounting interest from both lawmakers and market participants in utilizing antitrust law to shape the direction of US sports growth – and sports organizations face growing pressure to position and defend their business practices against a broad and evolving range of US competition rules.
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