FCC Eliminates Its NFL Blackout Rule

Here in Buffalo, football fans are enraged by the words “Blackout Rule.”  That reaction, however, may be a thing of the past.  On Tuesday, the Federal Communications Commission (“FCC”) voted unanimously to end the rule.

The nearly 40 year old rule was enacted by the FCC to promote attendance at local games.  It did so by banning cable and satellite providers from airing local broadcasts of a game that did not meet attendance requirements.  More specifically, a local broadcaster cannot air a game within a 75-mile radius of a stadium if 85% of the tickets were not sold by 72-hours before kickoff.  The rule forbids cable and satellite providers from airing an out of market broadcast of that game.

The rule was enacted when ticket sales were the primary source of revenue for NFL teams.  However, as the FCC pointed out Tuesday, this is no longer the case.  “The NFL is the most profitable sports league in the country, with $6 billion in television revenue per year.”  These revenues are made up of advertising an licensing fees from the various networks that broadcast  games.

In recent years, blackouts have been exceedingly rare.  Most games now sellout as football’s popularity is ever growing.  In fact, in 2013, there were only two blackouts: one in Buffalo and one in San Diego.

 

Although the FCC struck down its rule, the few occasional blackouts will likely still occur.  In theory cable and satellite providers are no longer banned from airing the game and could carry the broadcast from another out of market broadcast.  However, that result is unlikely for a number of reasons.

The NFL is a behemoth organization.  Broadcasting rights for games are hugely valuable – in 2013 season, 205 million viewers watched games.   Those broadcasting rights are locked down by contracts between the NFL, networks, cable companies, and satellite providers.  In each of the broadcast contracts the NFL requires a game blackout if the attendance requirements aren’t met.  Those contracts are in effect until 2022.  As a result, unless one of the companies wants to jeopardize future contracts with the NFL, they are unlikely to air a blacked out game.

The NFL fought to keep the rule in effect.  It said, “[t]he NFL is the only sports league that televises every one of its games on free, over-the-air television.”  According to the NFL, eliminating the rule may jeopardize the future of free broadcasts because ensuring live attendance allowed the league to make deals with broadcast networks.

Although it is a possibility, both the NFL and the FCC believe the rule’s elimination will not affect future broadcasts.  The FCC noted that, in part because of current contracts, the NFL will continue to broadcast the games on free TV.  The NFL, in referring to those contracts, stated

“[t]he FCC’s decision will not change that commitment for the foreseeable future.”

While a blackout free future may be in the works, its unlikely to occur anytime soon.  With current contracts and the NFL’s huge bargaining power, blackouts are here for the foreseeable future.  Unfortunately, that means us Buffalo Bills fans may have to miss a live game or two.

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