FCC Chairman Warns NFL About Antitrust Exemptions

FCC Chairman Brendan Kerr expressed concerns to the Post on Friday regarding the NFL’s potential loss of antitrust exemptions if the league continues to restrict live game access behind paywalls. This comes as the NFL intensifies its scrutiny of agreements with other professional leagues and streaming platforms.

Under the Sports Broadcasting Act of 1961, leagues have enjoyed protection from antitrust laws, enabling them to combine their television rights into larger packages. However, Kerr noted that this exemption is meant for “sponsored television broadcasts” of games.

“Right now, there’s an ongoing debate about whether games distributed to platforms like Netflix or YouTube TV fall under that category of sponsored broadcast or something different,” Kerr shared during the interview.

“It’s unclear whether the antitrust exemption would still be applicable in such instances,” he added.

Last month, the FCC sought public comment on how the transition from traditional broadcasters to streaming services is affecting viewers. With annual costs for watching all professional football games climbing to around $1,500, this inquiry might lead to more in-depth investigations.

A recent FOX News poll revealed that a significant 72% of sports fans believe that major sporting events should remain available on free-to-air television.

In light of Netflix raising subscription prices by at least $1 last Thursday, many fans are concerned that costs for streaming services will continue to rise. The premium plan is now priced at $26.99 monthly, up from $24.99, while the ad-supported option has increased to $8.99 from $7.99.

Kerr remarked, “For a long time, Americans enjoyed simply sitting down with a remote and quickly finding games.” Yet, he noted that this experience has become more complicated as viewers now need to subscribe to various streaming services, leading to increased frustration as games become trickier to locate.

As more NFL games require streaming subscriptions instead of pay-per-view options, Kerr views these fees as a significant barrier for fans.

He hinted at the possibility of a breaking point: “If you push too many games behind a paywall, that exemption might completely unravel.”

When questioned about whether the FCC would investigate the NFL, Kerr stated he had “no concrete thoughts” on the matter but suggested that it might necessitate intervention from the Justice Department or Congress.

The antitrust exemption enacted in the 1960s allows teams to negotiate collectively for league-wide television contracts, but Kerr raised questions about whether such rules should equally apply to broadcasters.

“On the one hand, you’ve got collective bargaining on the league side,” he explained, “but should broadcasters also have the opportunity to negotiate collectively?” This could empower major networks like CBS and FOX to collaborate on media rights and contract renewals with the NFL.

Additionally, he called into question the lasting validity of the antitrust exemption. The NFL previously stated that streaming services are taking over as the primary viewing method for consumers and has claimed to have “the most accessible, fan-friendly distribution model in all of sports and entertainment.”

According to the FCC, sports media rights fees have “exponentially increased” since the legislation of the 1960s. Back in 1961, the NFL signed a two-year rights deal worth $9.8 million with CBS, a stark contrast to today’s media rights agreements, which often exceed $10 billion annually.

Expensive media rights deals have turned the NFL into an incredibly lucrative entity, with nearly all 32 teams owned by billionaires, including figures like Denver Broncos owner Rob Walton, an heir to the Walmart fortune.

Expectations indicate that the NFL could rake in over $100 billion just from media rights agreements with various streaming services, according to the FCC.

Notably, Fox Corporation shares common ownership with News Corp., the parent company of the Post.

Other major sports leagues have also signed multi-billion dollar media rights agreements with a variety of streaming platforms.

The commission highlighted the significant role that advertising revenue from games plays in maintaining local news and reporting.