WASHINGTON, D.C. — The U.S. Department of Justice opened a probe into whether the NFL is harming consumers in the way it sells its broadcast rights. The investigation comes as multiple lawmakers and fans have expressed concern over the NFL and other leagues putting more games on subscription streaming services, potentially increasing costs for viewers.
The NFL and other professional leagues hold a limited antitrust exemption under the Sports Broadcasting Act of 1961 that allows them to sell broadcast rights to all games together. The league has television contracts with ESPN/ABC, NBC Sports, CBS Sports, Fox Sports, Prime Video and Netflix to air its games. Subscriptions are required to watch Monday Night Football games on ESPN that are not simulcast on ABC, Thursday Night Football and the Black Friday game on Amazon Prime Video, and Christmas games on Netflix. Select postseason games also require subscriptions, and the NFL has awarded games in the past to ESPN+, YouTube and Peacock. YouTube owns the rights to Sunday Ticket, a paid subscription that gives viewers access to out-of-market Sunday games.
All NFL games air for free on local broadcast stations in the teams' markets. The NFL said in a statement: "The NFL's media distribution model is the most fan and broadcaster-friendly in the entire sports and entertainment industry." According to Nielsen, 83 of the 100 most-watched television events last year were NFL games. Nearly 90 percent of NFL games are on free, broadcast television.
Multiple people familiar with the matter said the Murdoch family, which owns Fox Corporation, is the key driver behind the DOJ probe. Fox is the only major media company without a subscription streaming service that runs exclusive content. Fox Corporation filed an official comment with the Federal Communications Commission arguing that pay-walling sports threatens broadcast television, which is critical to local communities. Fox Corporation chief executive officer Lachlan Murdoch said, "We would certainly consider balancing or rebalancing our portfolio as we move forward when those opportunities become available."
A person with direct knowledge of NFL matters said the internal reaction to the DOJ actions was surprise and that there was general dismay and a belief that Fox was drumming up Congress and the FCC to examine the league's antitrust exemption. NFL general counsel Ted Ullyot gave an update on the matter and the potential for a DOJ investigation during league meetings last week in Phoenix. The Wall Street Journal ran an editorial earlier this month on the NFL broadcast rights issue. The editorial board wrote: "The assumption is that [NFL commissioner Roger Goodell] thinks he can get more money from big tech's streaming services than he can from his long-time TV partners."
The NFL plans to exercise an opt-out clause in its current broadcast deals after the 2029 season. The league also owns a 10 percent stake in ESPN and is negotiating with Paramount Skydance about a new rights fee due to a change-in-ownership clause after Skydance acquired CBS.
Former Fox Sports executive and media consultant Patrick Crakes said, "So far in the media distribution evolution the big winner has been big-time live sports." Fox pays more than $2 billion for its Sunday afternoon NFL game package.
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