Broadcasting and Media Rights Josh Edwards and Roxanne Herrington

History of Broadcasting in Sports • Olympic Games – Berlin 1936• NBC – 1st televised sporting event in US May 17, 1939• Field production• Viewers • 1947 Pivotal year • Gillette – 1st major sponsor 1944• Advertising boom – 1970s• 1979 ESPN

Negotiating Rights

• Rights may be negotiated as a single “bundle” or split according to the types of media (tv, internet, mobile) and rights involved.• Rights are divided by:• live broadcasting• webcasting (live streaming)• delayed broadcasts• packaging of highlights

Rules of the Game

• Intellectual property laws governing broadcasting vary significantly from country to country. • Rome Convention of 1961• World International Property Organization• Standing Committee on Copyright and Related Rights

The Price for the Rights

• Recent Contracts

• Los Angeles Times reported nearly ½ the cost for the average cable bills is from sports programming.

• Los Angeles/Time Warner Cable Deal

• Sports fees paid by cable: $17.2 billion in 2013. • Double the rate for non sports programming

• Distributors fear non-sports watchers might eventually shy away from pay TV (internet, Netflix, etc.)

Discussion: Do you think someday there will be a consumer crash or mass cancellation of TV service due to high cost of sports broadcasting?

National

• Deal signed in 2011, takes effect in 2014• Nine-year deal worth $27.9 Billion (CBS, FOX, NBC)• Runs through 2022 (up 60+%)

• CBS• $1 Billion annually

• FOX• $1.1 Billion annually

• NBC• $1 Billion annually

• ESPN (through 2021)• $1.9 Billion annually

National cont’d

• Three games between FOX, CBS on Sunday

• NBC gets primetime Thanksgiving game• Gets one divisional round playoff game annually from FOX or CBS• Loses wildcard game to presumably ESPN

• 23 of 25 2011 fall show ratings

• The History of the NFL on TV

Flexible Scheduling

• Sunday Night on NBC

• Weeks 11-17

• Sunday afternoon to Sunday night and vice versa

• Weeks 11-16 (12 days notice)

• Week 17 (6 days notice)

Players Lawsuit

• Players sued NFL for royalties• NFL Films• Ten retired players• “Names, images and likenesses”

Cease and Desist

• Definition• A cease and desist is an order or request to halt an activity (cease) and not to

take it up again later (desist) or else face legal action.

Cease and Desist

• NFL sacks church Super Bowl party• Copyright infringement due to admission charged• Large viewing parties prohibited

• NFL issues cease and desist to Wisconsin movie theatres• Prohibits “mass out-of-town viewing of NFL games.”• Free of charge

• Comcast issues cease and desist to NFL• Deal with NFL Network expired• NFL Network recommended consumers switch from Comcast products

International

• Skysports• Three-year deal (expires in 2015)• Regular season• Postseason, including Super Bowl• NFL Redzone

• Eurosports• Two-year deal (expires in 2015)• Monday Night Football• Audio and Video Partners in the UK

Broadcast in over 234 countries and in 31 different languages.

Mobile

• Verizon

• Thursday, Sunday and Monday

• Starting in 2014

Social Media

8,405,000 followers

5,236,000 followers

National

• Deal signed in 2012 takes effect from 2014-2021• 8 year deal worth $12.4 billion

• 100% increase from current arrangements

• Fox ($525 million annually)• TBS ($325 million annually) • ESPN ($700 million annually)

• Revenue will be split equally among all 30 teams per normal procedure.

Broadcasting Deal

National Cont’d

• World Series and All-Star Game will remain on FOX

• League Championship Series and Division Series will be shared across FSMG, TBS and MLB Network.

*MLB Network acquired two division series games from FOX

• Both deals also include digital “TV Everywhere” rights to stream televised games and other MLB-related programming online and through mobile devices.

Additional Highlights

• Games included in the FOX Saturday national exclusive windows, which were previously blacked out to MLB Extra Innings and MLB.TV viewers, will be available beginning in 2014.• In addition to two Division Series games, MLB Network has also acquired

the rights to telecast both the MLB All-Star Game Selection Show and the SiriusXM All-Star Futures Game.• Turner will have interactive television rights, which includes the rights to

create companion and ancillary products related to the TBS broadcast of regular and Postseason games.• FSMG will air a weekly 30-minute show created by Major League

Baseball Productions.

International

• MLBI • Broadcast in 233 countries• Re-transmitted in 20 different languages

• MLB International has agreements with 102 television and radio partners to broadcast Championship Season games, the All Star Game, and Post Season Play.• ESPN International, Fox Sports, OBS and OBS W (Korea), ONE HD (Australia),

Mejia Group and IASN (Colombia), TV Marti (Cuba), VTC3 (Vietnam), etc.

MLB Blackout Rules

1.) Exclusive National TV: Fox has certain rights for afternoon MLB games on Saturdays, and ESPN has the same rights for night games on Sundays.2.) Broadcast Territories: A local broadcaster has priority to televise games of the team in their market over national broadcasters (MLB.tv/MLB Extra Innings) regardless of whether that Club is playing at home or away.

MLB Blackout Map

The Antitrust Lawsuit Garber et al v. MLB

1.) MLB’s division of the United States into exclusive broadcast markets reduces competition because RSNs need not compete with each other to broadcast games in their local markets.

2.) MLB has monopoly power over the rights to broadcast out-of-market games and it uses that power to limit out-of-market viewing to either Extra Innings or to MLB.tv.

Plaintiff: Without these restraints, RSNs would compete with each other to broadcast “out-of-market” games in other parts of the country, making games more accessible and more affordable.

Basis of the argument By dividing up territories and setting fixed prices, MLB is in violation of the Sherman Act.

The Big Question Are baseball blackouts, and the sport's entire TV distribution model, pro- or anti-competitive?

Cont’d

• MLB tried to have case tossed out but US District Judge Shira Scheindlin rejected and found the plaintiffs had stated plausible antitrust claims. • “MLB blackout policy raises prices, reduces competition among teams, and

uses “monopoly power” to restrict fans’ ability to watch games.”

• Heart of the plaintiffs’ lawsuit = American Needle, Inc. v. NFL• Case proceeded to discovery phase • Oct 15 deadline for parties to complete discovery

MLB’s Trump Cards

•  MLB has designed its product to help its business run best, and just because there is collateral damage doesn't make it inherently anticompetitive.

• And of course…the Antitrust Exemption.

2014 Season

• ESPN Monday and Wednesday blackouts will be gone.

• FOX Saturday blackouts will be gone.

• Still deal with regional blackouts. • Ultimate court resolution will take years.

• Blackout Bypass

The Big East

• 12 year $500 million media contract with Fox Sports 1• All conference-controlled men’s basketball games• Select women’s games

• Slated to cover 100 men’s games this season and entire Big East Men’s Basketball Tournament each season.