Eliminating Sports Blackout Rules

I appreciate the opportunity to comment on the Federal Communication Commission’s proposed rulemaking to eliminate the Sports Blackout Rule.1

The Technology Policy Program of the Mercatus Center at George Mason University is dedicated to advancing knowledge about the effects of regulation on society. As part of its mission, the program conducts careful and independent analyses that employ contemporary economic scholarship to assess agency rulemakings and proposals from the perspective of the public interest. Therefore, this comment does not represent the views of any particular affected party or special interest group but is designed to assist the agency as it explores these issues.

Summary

Experts view television regulations as “a Rube Goldberg regulatory structure,” a complex system that performs simple tasks in indirect, convoluted ways.2 The sports blackout rules, which the Federal Communications Commission originally devised in 1975, are one piece of the machine, an expendable intervention into television markets. Sports blackouts, as the Copyright Office reported to Congress in 2008, are “best left to marketplace forces” 3 since blackouts can be provided by contracts between leagues and cable and satellite (pay-TV) distributors. The existing rules have prevented a freer media market for forty years and should be repealed.

The Federal Communications Commission (FCC) has the legal authority to repeal the blackout rules, which are particularly unfair to consumers because blackouts ostensibly protect stadium-gate receipts. Sports leagues have it within their power to fill a stadium by simply lowering ticket prices. It is unsupportable that sports leagues can summon the force of the United States government to blackout sports in local television markets because of attendance problems the leagues themselves have a hand in creating. The FCC should not be supporting this through market distortions.

Supporters of the blackout rules—like some sports leagues and broadcasters—argue that forcing blackouts on cable and satellite providers helps maintain free over-the-air broadcasts.4 That specious argument should be disregarded. Unlike the 1970s, few Americans now rely solely on broadcast television for their entertainment, so the FCC’s ill-advised attempt to shape markets only inhibits free competition. Whatever the impetus for the 1975 blackout rules, those justifications have surely diminished as the economics of television has changed dramatically. For these reasons the FCC should eliminate the sports blackout rules. 

Continue reading

' '