FCC Drops Blackout Rules

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The Federal Communications Commission has voted to eliminate its long-standing sports blackout rules, which prevent stations from broadcasting National Football League games in local markets if they don't sell out within 72 hours of kickoff. The commission says the rules are "no longer justified" because of industry changes over the last 40 years. Bose McKinney & Evans LLP Counsel and former Indiana University McKinney School of Law Dean Gary Roberts discussed the blackout rules on a recent edition of Inside INdiana Business Television.

September 30, 2014

News Release

Washington D.C. -- The Federal Communications Commission today repealed its sports blackout rules, which prohibited cable and satellite operators from airing any sports event that had been blacked out on a local broadcast station. The action removes Commission protection of the NFL's current private blackout policy, which requires local broadcast stations to black out a game if a team does not sell a certain percentage of tickets to the game at least 72 hours prior to the game.

The Order finds that the Commission's sports blackout rules are no longer justified in light of the significant changes in the sports industry since these rules were first adopted nearly forty years ago. At that time, ticket sales were the primary source of revenue for the NFL and most NFL games failed to sell out. Today, television revenues have replaced ticket sales as the NFL's main source of revenue, and blackouts of NFL games are increasingly rare. The NFL is the most profitable sports league in the country, with $6 billion in television revenue per year, and only two games were blacked out last season.

The Order also finds that the NFL – whose current contracts with the broadcast networks extend through 2022 – is unlikely to move its games from free, over-the-air broadcast television to satellite and cable pay TV as a result of elimination of the sports blackout rules. The Order therefore concludes that the sports blackout rules are no longer needed to ensure that sports programming is widely available to television viewers.

Today's action may not eliminate all sports blackouts, because the NFL may choose to continue its private blackout policy. However, the NFL will no longer be entitled to the protection of the Commission's sports blackout rules. Instead, the NFL must rely on the same avenues available to other entities that wish to protect their distribution rights in the private marketplace.

Action by the Commission September 30, 2014, by Report and Order (FCC 14-141). Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O'Rielly. Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O'Rielly issuing statements.

Source: Federal Communications Commission