FCC opens inquiry into fragmentation of sports broadcasting

On Wednesday, the Federal Communications Commission (FCC) issued a public notice seeking comment about the ongoing fragmentation of sports broadcasting between traditional television platforms, like over-the-air broadcast networks and cable channels, and paid streaming services, like Prime Video and Netflix.

The FCC is looking into the affordability, or lack thereof, of watching live sports in an era where games are split between countless platforms.

“For decades, Americans have enjoyed turning on their television sets and quickly finding the games they wanted to watch for free on an over-the-air broadcast,” the agency wrote, per a filing obtained by The Desk. “Yet watching your favorite sports team play is not as easy these days. Many games are still available for free over broadcast TV, but there has been a surge in recent years of games going behind the paywalls of various streaming services. While this can increase the number of games and sports available to fans, many consumers today find it more difficult to find the events they want to watch and are now paying to sign up for one or more video distribution platforms that consumers can find difficult to navigate.”

While the FCC doesn’t have any legislative power to change what laws are currently on the books, the agency can use its inquiry to try and shape policy should Congress decide to take action on the matter. The FCC can also alter how it decides to enforce legislation that is already signed into law.

Perhaps most relevant is the Sports Broadcasting Act of 1961, the bill that grants leagues like the NFL an antitrust exemption that allows it to bundle its teams’ media rights together and sell them in one package to a broadcaster. If the government determines that leagues aren’t holding up their end of the bargain when it comes to offering a product that is consumer friendly, they can threaten to pull the exemption, a move that would completely upend how sports rights are packaged and sold.

One interpretation of the Sports Broadcasting Act suggests that the legislation only applies to sports rights sold to broadcast networks, not streamers, which could limit the antitrust protections leagues currently enjoy. Such an interpretation would, in theory, give regulators an avenue by which to crackdown on excessive fragmentation, though such a move would be unprecedented and almost certainly fought in court by the leagues.

More likely, the FCC is simply issuing this notice as a way of signaling to professional sports leagues that it is watching. With the NFL reportedly looking to negotiate a new set of media deals much sooner than initially anticipated, and those deals likely to place more games on paid streaming services, notices like these can give leagues some level of pause. It serves as a reminder that they cannot go too far in fragmenting their inventory between streamers, or else the government might step in and do something that would radically alter its business.