FCC Looks Into Streaming Impact on Sports Viewers
As the expenses associated with watching NFL games and other sports continue to rise, the Federal Communications Commission (FCC) is considering taking action against agreements between professional leagues and streaming platforms.
On Wednesday, the FCC invited public input regarding the potential benefits or drawbacks of shifting from traditional television to streaming services for consumers. This could mark the initial step toward a more in-depth investigation.
Documents from the commission’s media department indicate that last year, NFL games were available on Amazon Prime Video, Peacock, Netflix, YouTube, and several other streaming services. It’s estimated that watching every professional football game could set a viewer back around $1,500.
FCC Chairman Brendan Carr highlighted the difficulties faced by viewers. “For decades, Americans have enjoyed turning on their TVs and instantly finding the game they want to watch. But these days, watching your favorite team play isn’t so easy,” he commented, noting the increasing number of games shifting online.
The FCC’s public inquiry includes questions centered on how market changes have influenced viewers’ access to nationally televised live sports and local broadcasts. One specific question addresses whether ‘fragmentation’ impedes broadcasters’ ability to meet their public interest duties.
According to the FCC, local news broadcasts often depend heavily on advertising revenue generated from sports games. The commission also referred to the Sports Broadcasting Act of 1961, which provides leagues with antitrust relief for negotiating media rights and allows them to combine the TV rights of multiple teams into single packages.
However, the FCC noted that the costs of media rights have skyrocketed since those legislative reforms. For instance, back in 1961, the NFL signed a two-year deal with CBS for $9.8 million, a stark contrast to current deals exceeding $10 billion annually.
These steep media rights fees have transformed the NFL into a lucrative venture, with most teams owned by billionaires. Ownership examples include the Denver Broncos, held by Walmart heir Rob Walton, whose net worth is approximately $148 billion, and the Kansas City Chiefs, owned by the Hunt family, valued around $24.8 billion.
The FCC pointed out that many sports events that once aired on free or traditional pay-TV are now accessible only through a patchwork of subscription-based streaming services. This shift has led to notable frustration among fans who find themselves needing several subscriptions to catch their favorite teams.
As for the NFL, it is projected to rake in over $100 billion from its media rights arrangements with major streamers like Disney, Paramount, Fox Corporation, NBCUniversal, NFL Network, Amazon, Google, and Netflix.
Fox Corporation shares ownership ties with News Corp., the parent of this publication.
Other major sports leagues are also securing media rights deals worth billions with various streaming platforms. The FCC has noted that these subscription fees have, in some cases, surpassed ticket sales as a league’s primary revenue source.
