Scrutiny over how the federal government enforces the Sports Broadcasting Act of 1961 is becoming louder by the day.
On Tuesday, Sen. Mike Lee (R-UT) reportedly authored a letter to Omeed A. Assefi, the acting Assistant Attorney General, and FTC Chairman Andrew Ferguson urging the executive branch to examine how the Sports Broadcasting Act, which grants professional sports leagues a federal antitrust exemption to pool media rights between teams to sell as a collective, is interpreted with relation to the growing prevalence of streaming. Lee serves as the chairman of the Senate Judiciary Subcommittee on Antitrust, Competition, Policy, and Consumer Rights.
The letter comes less than one week after FCC Chairman Brendan Carr opened an inquiry into fragmentation in sports broadcasting, which singled out the legislation.
At the core of both Carr’s and Lee’s arguments is whether professional sports leagues are fulfilling their end of the bargain under their antitrust exemptions. Such exemptions are generally granted on the premise that the parties involved uphold certain standards that make the arrangements beneficial to consumers.
However, as leagues continue to move inventory that was once set aside for broadcast or cable networks over to streaming, both elected officials and appointed bureaucrats alike have taken notice that accessing sports broadcasts has become a burdensome endeavor for fans.
“The modern distribution environment differs substantially from the conditions that precipitated this exemption. Instead of a small number of free broadcast networks, the NFL now licenses games simultaneously to subscription streaming platforms, premium cable networks, and technology companies operating under different business models. To the extent collectively licensed game packages are placed behind subscription paywalls, these arrangements may no longer align with the statutory concept of sponsored telecasting or the consumer-access rationale underlying the antitrust exemption,” Lee wrote in his letter, per Fox News.
How the antitrust exemptions in the Sports Broadcasting Act are enforced is largely a matter of interpretation. One potential reading of the law would give regulators an avenue to crack down on fragmentation. Some suggest that the Sports Broadcasting Act, as written, applies only to sports rights sold to broadcast networks, not to streamers, which could limit the antitrust protections that leagues currently enjoy.
Such an interpretation would almost certainly be met with hostility by the leagues and result in litigation. It’s more likely the federal government will simply use that interpretation as leverage against the leagues to persuade them to keep sports broadcasts widely available and affordable.
However, the attention being paid to these antitrust exemptions should be of real concern to the leagues. Any change in how the Sports Broadcasting Act is interpreted could completely upend their current business models, which are predicated on the ability to pool media rights.
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.