The Justice Department appears to be casting a wide net in its investigation into whether sports leagues are upholding the terms of a longstanding antitrust exemption as games increasingly migrate from broadcast television to streaming services.
As part of that investigation, the Justice Department reportedly met with executives from local station groups at the National Association of Broadcasters conference last week in Las Vegas, per The Wall Street Journal. The report says the DOJ “sought feedback” from the executives regarding the transition of live sporting events from broadcast to streaming.
In particular, executives discussed “the economic power that sports, particularly the National Football League, has on their TV station businesses.”
The NFL and other sports programming are vital to the survival of local broadcast stations. Revenue generated from selling advertising during live sporting events helps fund other functions of local stations, such as news telecasts. Large audiences tuning into sports coverage can also boost viewership of a station’s other programming.
Per the WSJ, the Justice Department is expected to issue “civil investigation demands” to sports leagues, TV networks, and the local broadcasters as part of its probe.
The local broadcast executives reportedly “raised issues” with the enforcement of the antitrust exemption granted to professional sports leagues under the Sports Broadcasting Act of 1961. Local station owners assert that the exemption, which allows leagues to centrally sell media rights on behalf of teams, should not apply when games are sold to streaming services. Such an interpretation would put broadcasters in pole position to retain sports rights vital to their overall business.
The Justice Department investigation comes at the same time as others in Washington take a closer look at sports fragmentation. The Federal Communications Commission has launched an investigation of its own, though its ability to enforce any change is limited. Concurrently, members of Congress from both sides of the aisle, including Sen. Elizabeth Warren (D-MA), Sen. Mike Lee (R-UT), Sen. Tammy Baldwin (D-WI), and others, have taken various steps to address what is seen as a growing problem for consumers.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.