End of the blackout rule?

[Eydugstr]

http://www.aol.com/article/2014/09/0...6pLid%3D527167

Critics have been lining up to go after the NFL and Roger Goodell for supposed missteps - lopsided player penalties, anyone? Not to be left out, Federal Communication Commission Chairman Tom Wheeler said the agency will soon vote to "sack" the NFL's longstanding blackout rule.

In a USA Today op-ed published Tuesday, Wheeler called the FCC's 40-year-old rule nonsensical and added "We are blowing the whistle on this anti-fan practice."

The NFL's blackout policy was implemented in the '70s and prevented games from being broadcast locally if the arenas weren't sold out. It was a way to get more fans in the seats.

Gigaom explains, "The blackouts exist in the first place as a way for NFL owners to ensure they don't lose out on ticket and stadium-related revenue due to fans watching the game at home. Under the rules, owners can declare a TV blackout in an area around their stadiums up to 72 hours ahead of any game that is not sold out."

Wheeler says that rule is outdated and prevents some fans from watching their favorite teams while at home. Three of the five FCC commissioners need to vote against the blackout rule to see it disappear. Wheeler and two others have already voiced their opposition.

The decision to nix blackouts was first proposed at the end of last year, and since then the NFL has hit back. The league and other network broadcasters have started the"Protect Football on Free TV" campaign, saying, in part, "NFL games remain on FREE broadcast television because of the FCC's sports blackout rule which has been working for nearly four decades."

According to NBC, a league spokesman said at least 20,000 fans - and NFL hall-of-famer Lynn Swann - support the blackout rule.

While it looks the FCC is on track to end the blackouts, a writer for The Hill says sports leagues "like the NFL would still be able to negotiate with broadcasters to block out some games." But if those leagues end up signing contracts with cable networks instead, broadcasters could suffer.

DANIEL KIRKPATRICK VIA BLOOMBERG: "Without those rules in place ... the NFL and other sports leagues will have less incentive to sign contracts with broadcast television stations."

The FCC is set to vote on removing the rules on Sept. 30.

[doobs_05]

on one hand, yes, its needs to go away and fans should be able to watch, want fans to show up, lower prices or put a better product on the field. on the other hand, this is just helping Comcast, Verizon, etc. with their monopoly .

[TopekaRoy]

As a fan I would hate to see a Chiefs game blacked out locally because the game isn't sold out, but I don't think the FCC should have the power to force a local network affiliate to broadcast a sporting event. I can understand prohibiting the broadcasting of obscene content on over-the-air stations that are easily accessible to children, and even forcing broadcasters to provide a couple of hours a week of "educational/informational" programming in the public interest (although I can see the argument where that is impinging on the right to free speech).

I know there are many fans who can't afford to attend a game or don't have the transportation to get to the stadium, but do they have a Constitutional right to watch their favorite team play football? Many Green Day fans can't afford to go to one of their concerts. Should the FCC force TV stations to broadcast rock concerts, as well?

[Eydugstr]

on one hand, yes, its needs to go away and fans should be able to watch, want fans to show up, lower prices or put a better product on the field. on the other hand, this is just helping Comcast, Verizon, etc. with their monopoly .

As a fan I would hate to see a Chiefs game blacked out locally because the game isn't sold out, but I don't think the FCC should have the power to force a local network affiliate to broadcast a sporting event. I can understand prohibiting the broadcasting of obscene content on over-the-air stations that are easily accessible to children, and even forcing broadcasters to provide a couple of hours a week of "educational/informational" programming in the public interest (although I can see the argument where that is impinging on the right to free speech).

I know there are many fans who can't afford to attend a game or don't have the transportation to get to the stadium, but do they have a Constitutional right to watch their favorite team play football? Many Green Day fans can't afford to go to one of their concerts. Should the FCC force TV stations to broadcast rock concerts, as well?

I walk away from the article with more questions than answers, as well. Would NFL use this as a way to make people pay a huge subscription fee to watch anything NFL? Would individual team owners start laying down the law of whether or not they would allow their team's home games to be broadcast or not? Would it infringe on freedom of the press if teams refused to be covered?

The part where I think the rule does need examination...Is the difference between the media then and now. 40 years ago those rules were thought up when there were three major networks, a few local stations, and cable was just starting. Now it's not uncommon for people to have 300+ channel cable systems, satellite dish networks etc etc...

[TopekaRoy]

I walk away from the article with more questions than answers, as well. Would NFL use this as a way to make people pay a huge subscription fee to watch anything NFL? ...

They already do for OUT OF MARKET games. It's called NFL Sunday ticket and if I'm not mistaken it's STILL only available to those who subscribe to DirecTV or Verizon cellular service. I suppose they could make locally blacked out games available for an additional Pay-per-view fee which the local team would get a healthy chunk of.

... 40 years ago those rules were thought up when there were three major networks, a few local stations, and cable was just starting. Now it's not uncommon for people to have 300+ channel cable systems, satellite dish networks etc etc...

Another big difference is that before Monday Night Football popularized the sport, the average fan could afford to go to the game. Now, in order for most middle class families to be able to afford season tickets, they must make serious sacrifices somewhere else in their lives. Only the most avid fans are willing to do that.

The truth is that anyone with an internet connection can still watch locally blacked out games although they may not be able to get 1080p high definition. The business model has changed. 40 years ago most of the revenue came from local ticket sales (and concessions). Now it comes from Network broadcasting rights--that is, advertising revenue which is dependent on having the MOST possible viewers--and merchandising. The blackout rule needs to go because it is obsolete, but I don't think the FCC should play a role in that.

[Eydugstr]

They already do for OUT OF MARKET games. It's called NFL Sunday ticket and if I'm not mistaken it's STILL only available to those who subscribe to DirecTV or Verizon cellular service. I suppose they could make locally blacked out games available for an additional Pay-per-view fee which the local team would get a healthy chunk of.

Granted, I should've written "In addition to NFL Sunday Ticket..." My bad (rolling eyes)

Another big difference is that before Monday Night Football popularized the sport, the average fan could afford to go to the game. Now, in order for most middle class families to be able to afford season tickets, they must make serious sacrifices somewhere else in their lives. Only the most avid fans are willing to do that.

The truth is that anyone with an internet connection can still watch locally blacked out games although they may not be able to get 1080p high definition. The business model has changed. 40 years ago most of the revenue came from local ticket sales (and concessions). Now it comes from Network broadcasting rights--that is, advertising revenue which is dependent on having the MOST possible viewers--and merchandising. The blackout rule needs to go because it is obsolete, but I don't think the FCC should play a role in that.

But with all of that in mind...Why would they change the rule unless they've got more money on their minds? In the long run I'd think it'd just open the door for charging people more subscription fees.

[TopekaRoy]

I wish I knew more about how the blackout rule works financially. Wikipedia has a good article about the broadcast rules but says nothing about the money involved and I'm having trouble finding anything on Google.

The NFL makes the bulk of it's money by selling the broadcasting rights to it's games to the networks. The more people that watch football games, the more CBS can charge advertisers and the more they can charge advertisers, the more they can pay the NFL to broadcast AFC games (and now 8 Thursday night games). But what happens financially when a game is blacked out?

Arrowhead stadium has 79,451 seats. Let's say they only sell 50,000 of those seats for a home game and it is blacked out. The average ticket price (2013) is $68.38. Let's assume that all of the seats not sold average out to that. Let's further suppose that by blacking out the game they sell an additional 10,000 seats. They stand to recoup $68,380 of the lost revenue versus a sell-out. But do they lose any money that they would normally receive for broadcasting the game? The local CBS affiliate is prohibited from televising another (out of market) game in it's place and if Fox has a doubleheader that week, they can't broadcast a game in the noon time slot either, so both networks are losing viewers. Do they have to give back some of the money they charged their advertisers? Do they withhold that amount from what they agreed to pay they NFL? Would the NFL (which shares broadcast revenues equally with all 32 teams) subtract that amount from what they pay all of the teams or would they deduct the entire amount from what they pay the Chiefs because they are the source of the lost revenue?

I can't imagine an advertiser paying the same amount when a game is blacked out that they would pay when more viewers are seeing their ads so somebody somewhere is losing money. If the Chiefs game where blacked out you would be losing 6 hours (CBS and Fox) of ads in Kansas City, St. Joseph, Topeka and, I'm guessing, Lincoln, Nebraska as well. That HAS to cost the NFL more than the 70 grand they would get from blacking out the game.

It doesn't make any "cents." (See what I did there?)

[Eydugstr]

But do they lose any money that they would normally receive for broadcasting the game? The local CBS affiliate is prohibited from televising another (out of market) game in it's place and if Fox has a doubleheader that week, they can't broadcast a game in the noon time slot either, so both networks are losing viewers. Do they have to give back some of the money they charged their advertisers? Do they withhold that amount from what they agreed to pay they NFL? Would the NFL (which shares broadcast revenues equally with all 32 teams) subtract that amount from what they pay all of the teams or would they deduct the entire amount from what they pay the Chiefs because they are the source of the lost revenue?

I can't imagine an advertiser paying the same amount when a game is blacked out that they would pay when more viewers are seeing their ads so somebody somewhere is losing money. If the Chiefs game where blacked out you would be losing 6 hours (CBS and Fox) of ads in Kansas City, St. Joseph, Topeka and, I'm guessing, Lincoln, Nebraska as well. That HAS to cost the NFL more than the 70 grand they would get from blacking out the game.

It doesn't make any "cents." (See what I did there?)

Yes, I'm following what you're getting at (both financially and joke-wise...) Guess the big question is, do the advertisers have the right to drop the advertisements if the game isn't shown? If it is the case, then yeah that's were the hidden money is that they're trying to make. I'm assuming those ads are slated to go on well before the blackout deadline. I've never watched the programming that replaced the game to see if it was local companies or big-budget ads from national companies.

[TopekaRoy]

If it happens to a Monday night game ESPN usually just simulcasts ESPN News to the affected market. I don't think it has happened to the NFL Network yet, but I guess they would just run a black screen with a message that says something like "Due to NFL rules, this program is blacked out in your area." Local over-the-air stations are on their own. They could show a movie that they have the rights to or rerun recent prime time episodes, but they generally end up running half hour infomercials (Bo Flex, Magic Chef, etc.). I assume they just auction off the time slots to the highest bidder, but it would be much less than what they would get for local ads during a Chiefs game.

So the local affiliates take a financial hit, but national advertisers like Budweiser, Ford and Allstate pay the networks. Do they get a discount when their ads are shown in fewer markets? Do the Networks just absorb the loss? That is, is there language in the contracts where the NFL doesn't guarantee a minimum number of markets or viewers and the networks just hope for the best? I know with any program (American Idol, for example) there is no guarantee that a specific number of viewers will tune in and ad prices are based on the projected size of the audience, but if Fox were to pull the program off of WFLD in Chicago at the last minute, I imagine advertisers would expect a significant rebate/discount.

That is why I would like to know how all that works with football games. The NFL says that they have to black out games that aren't sold out or people will just stay home and not buy tickets, but if they lose more money in advertising revenue than they gain in additional ticket sales then their argument is invalid.

Baseball stadiums rarely sell out but nearly every game in every market is televised. The NHL struggled to make a profit until they got rid of their blackout rules. With the increased television exposure, hockey is more popular than ever although nowhere close to football or basketball. Most MSL soccer games are televised. They don't seem to be worried about people not going to the games because they can just stay home and watch them on TV. How is football any different?