President Donald Trump has chimed in on the NFL’s fight to retain its antitrust exemption amid probes by the FCC and Justice Department that could seriously affect the league’s business model if it loses its exemption.
At the center of the issue is whether the NFL’s shift of games onto Netflix, Amazon, YouTube and Peacock has become too expensive for average fans to access, which in turn could be a violation of the Sports Broadcasting Act and the antitrust exemption the act grants the league.
In a wide-ranging interview involving other subjects on the president’s plate, reporter Sharyl Attkisson asked if the NFL is “price gouging” and whether the administration is going to do anything about it.
“It’s tough,” Trump replied. “You got people that love football. They’re great people, they don’t make enough money to go and pay this. It’s tough. And [the NFL] could be killing the golden goose, I mean to have that stupid kickoff thing that you can’t watch, it’s unwatchable. I hate the games where they, you know, they have the new phony kickoff. I don’t think it’s any safer. I hope college football doesn’t do that.”
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Got it, the president is not a fan of the NFL’s so-called dynamic kickoff that the league says has lowered the number of head injuries in its games.
Anyway, back to the subject at hand — the NFL’s growing relationship with streaming services and the cost of adding those for fans.
“…They have to be careful because others have tried this and all of a sudden you don’t have a sport anymore,” Trump said. “Probably will.”
Did the president just say his administration will step in?
“It’s something, there’s something very sad when they take football away from many, many people, very sad. I don’t like it,” Trump said.
Again, is the government stepping in?
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“I don’t know,” Trump said. “I don’t, but I don’t like it. I don’t like it. They’re making a lot of money. They could make a little bit less … You’ve got people that live for Sunday. They live, they can’t think about anything else, and then all of a sudden they’re going to have to pay $1,000 a game?
“It’s crazy, so, I’m not happy about it.”
For the record, no one pays $1,000 to watch an NFL game on a streaming service. But the cost of adding the multiple streaming platforms the NFL is now doing business with, plus the cost of cable or satellite service to have all games available on a given game day, could easily eclipse $1,000 per season.
And while that is potentially a lower cost than, say, a family of four actually attending a game once one figures in tickets, parking and concession purchases of food and beverages, that’s not the point.
The point is the NFL enjoys a government-provided antitrust exemption that has become the cornerstone of its business model.
That exemption passed by Congress in the Sports Broadcasting Act of 1961 and signed into law by President John F. Kennedy allows the NFL to negotiate massive league-wide broadcast deals with networks.
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And that has benefited the league in ways Major League Baseball and other leagues have not because those broadcast rights are typically the highest in American sports and the NFL shares those revenues evenly among its teams.
So there are no poor teams competing with rich teams. And that makes the NFL more competitive to the point smaller-market teams such as the Kansas City Chiefs can author a dynasty with multiple Super Bowl wins even as big-market teams such as the New York Jets or New York Giants aren’t automatically good simply because they have more money to spend.
At issue is that the Sports Broadcasting Act only covers over-the-air television and not the relatively new streaming services that are expensive for some consumers.
So the government probes by the FCC and DOJ are questioning whether the 1961 act is being violated by 2020s-era broadcasting rights to pay streaming services.
So, while the NFL’s business model depends on centralized control of its media rights allowed under the antitrust exemption, adding streaming to that model makes restrictive bundling harder to justify.
We now know what side the president is on.
