The FCC’s Media Bureau released a Public Notice this week starting an examination of the marketplace for sports rights and how changes in that market have affected local broadcasters and consumers.  The notice recognizes what is evident to all consumers – that the sports marketplace has changed as competition has grown for rights to transmit sports to the public.  While asking for comments on those changes, perhaps the most important question asked by the Bureau is, even if it is found that changes in some ways disadvantage some consumers, does the FCC have any jurisdiction to do anything about those changes?

Initially, the FCC recognizes that sports programming long desired by TV broadcasters to attract local audiences is now also sought by cable and streaming companies to attract those same audiences. The FCC notes that competition for these rights likely increases the costs of acquiring this programming, perhaps making it harder for consumers to get access to the programming when it is not on free TV.  The FCC also suggests that the dispersion of rights in some sports leagues may make it harder for consumers to find the programming that they desire, as coverage is spread across multiple broadcast and streaming platforms.  Not only are consumers confused, but they may end up paying more through subscriptions to multiple services to ensure that they can see the games of their favorite teams.

The Public Notice seeks comments on the accuracy of its assumptions and other details as to how this marketplace has changed.  The notice asks for information on the terms in contracts signed with media outlets to obtain sports programs, including whether programs covering major league games that are acquired by national non-broadcast platforms allow for particular games to also be carried on local “free” TV.  The Bureau also asks for predictions on the impact that upcoming negotiations for the rights to carry games in some leagues (including the NFL) could affect the marketplace.  The notice asks for differences between professional and college sports in contracting for local coverage of games.  It even inquires as to issues with broadcasters getting access to high school games.

While the provision of this information will no doubt be interesting to the FCC and to many observers, the real question is what the FCC can do about the changes in the marketplace.  The notice seeks comments on how changes in media rights have affected broadcasters and whether the greater competition for sports programming affects the ability of local TV stations to serve the public interest in their local communities and to convey information (including emergency information) to the local audience. 

Finally, the FCC asks questions about its ability to do anything about the private contractual agreements between sports leagues and media outlets. That last question is the real crux of the inquiry.  The notice recognizes that Congress, through the Sports Broadcasting Act of 1961, has given major leagues certain antitrust exemptions that allow the leagues to negotiate packages where rights to cover their games are sold to media platforms.  The notice notes that college sports do not have the same kind of exemptions.

But most importantly, the notice seeks comments on just how far the FCC’s power to regulate in the public interest goes.  The FCC’s jurisdiction generally is not thought to cover streaming services or sports leagues.  And, certainly, it would be difficult to imagine that the FCC could force broadcasters and other entities that it does regulate to increase what they pay for sports rights to keep those rights from going to these non-regulated entities. 

So, what can the FCC do?  Certainly, the FCC has the bully pulpit that it can use to put public pressure on various parties to take actions that the FCC might think are warranted.  And the references to the Sports Broadcasting Act suggest that another aim may be to highlight marketplace issues for Congress.  In some areas, the study could even highlight issues for state legislators – for instance, in the area of high school sports, where some states and school districts have sold sports rights to online services and prevented local broadcasters from covering games.  We have even heard of issues with local broadcasters having their local sports coverage deleted from online platforms – depriving broadcasters of access to the content they created and the online audiences that they have built up – perhaps another issue for review by Congress. 

The focus of the Public Notice is clearly on television, as the notice does not even mention broadcast radio.  But some radio broadcasters have been affected by sports coverage rights migrating to other platforms – particularly the high school sports issues mentioned above, and may wish to comment.

The wide-ranging inquiry opened by the Media Bureau certainly will be interesting to watch.  Comments are due March 27, with reply comments to be filed by April 13.