The NFL owners have converged in Phoenix, AZ for their annual meetings this week, and one of the first major announcements that was made concerned the issue of television blackouts. It had been the league’s policy for a long period of time, since the 1970s to be exact, to black games out on local television if the stadium wasn’t sold out within 72 hours before kickoff. That policy is no longer, at least for the 2015 season, as the owners voted on a one-year suspension of the hugely unpopular blackout rule on Monday.
There are a variety of circumstances that compelled the owners to make this decision at this point in time. The manner in which the game is consumed from a media standpoint is constantly changing and evolving. The amount of revenue being brought in from the league’s myriad television deals is staggering. The convergence between traditional and digital media is affecting all forms of entertainment, with sports in general and the NFL in particular being no different.
Have you seen how much money the NFL makes from its current TV deal?
Slightly over three years ago, the league signed gargantuan extensions with its existing television partners. 2015 will mark the second of an eight-year agreement the league signed with ESPN worth nearly $2 billion per year to the NFL. Factor in the nine-year extension with FOX, CBS and NBC that took effect the same time worth an added $3 billion annually, the $1 billion/year windfall from DirecTV, alongside various other sources of cash brought in from digital and radio properties and you have quite the revenue stream simply from putting the games on camera or in audio format.
As the league realizes profits the likes of which have never been seen in its history, it smacks of a pretty shameless money grab to continue to blackmail fans with policies like blacking out games if they don’t sell out. It also demonstrates a sort of tone-deafness to the overarching trends associated with the way the game is currently presented. Let’s not forget that ticket prices to NFL games, even for those upper deck seats which are generally the reason games get blacked out upon going unsold, continue to escalate in price especially when you factor in personal seat licenses and the like.
The antiquated policy of the NFL blackout has roots in the league’s early days. When the television began to become widespread in American homes during the 1950s, league leaders were fearful that attendance would plummet if games were televised without restrictions. Back then, their concerns were likely much more warranted than now given the fact baseball was still king at the time and the NFL hadn’t come close to emerging as the juggernaut it has presently become. In fact, until the current policy was implemented in 1973, all games were blacked out on local television regardless of whether or not the game was sold out.
As the league has grown and attendance has soared, more and more fans, pundits and even government regulators have questioned the legitimacy of the NFL’s blackout rule. The league actually liberalized the restrictions in 2012 where teams could avoid a local television blackout as long as they sold 85 percent of the tickets for a given game. Suites and club seats were exempt from that threshold.
Enter Congress and the FCC
That still didn’t satisfy the FCC who began to pay more attention to the issue. Tom Wheeler, chairman of the media regulatory body, penned an op-ed in USA Today in September of 2014 calling for an end to the policy.
“The sports blackout rules are a bad hangover from the days when barely 40 percent of games sold out and gate receipts were the league’s principal source of revenue. Last weekend, every single game was sold out. More significantly, pro football is now the most popular content on television,” Wheeler wrote.
Since then the agency has sought to have the policy overturned. The issue has become an especially important issue in markets adversely affected by the policy such as Buffalo. The Bills have avoided blackouts in the past as a result of former owner Ralph Wilson and local businessmen such as restaurant and hotel tycoon Russell Salvatore writing checks for the balance of unsold tickets. Still, should it really come to that considering the league’s current stature in the eyes of the American public?
Congressmen on both sides of the aisle have worked in concert with the FCC to force action from the league. Both Richard Blumenthal (D-CT) and John McCain (R-AZ) have threatened to re-examine the NFL’s antitrust exemption if concrete measures on this as well as other issues facing the NFL weren’t addressed.
Blumenthal was emphatic in emphasizing a victory for fans of league upon the announcement of the relaxed policy on Monday.
“This decision is a huge historic victory for tens of millions of fans and consumers across the country,” he exclaimed. “We’re one step closer to completely eliminating this anti-fan reprehensible measure for all time.”
Will the absence of a blackout rule induce mediocrity from some teams?
Though the owners’ move to rescind the blackout rule, at least for a year, is a victory of sorts for fans, here’s where I can’t help but come out on the side of the league. I hate intentional mediocrity. There are plenty of teams in the league that have been guilty of it throughout NFL history. Certain owners can promise hope to get people into the seats early in the season knowing that a huge infusion of television money is headed their way regardless of where they finish.
It’s certainly true that the NFL has prided itself on being a parity-driven league. Well-run franchises, regardless of media market size, have the potential to make the playoffs and contend for Super Bowls. That said, it could be argued that a non-existent blackout policy will incentivize some front offices to embrace a lowest common denominator approach because of what these teams are guaranteed from the TV deal.
In the end, it’s apparently obvious that this is an experimental move from the owners given its current one-and-done status. The fact that this is pretty much the first time since the advent of television on a mass-produced scale that the NFL will operate without any sort of blackout restrictions is significant. What will be interesting to see down the road is whether or not it’s part of a big picture move by the league realizing that their media properties are where the real money is to be made down the road.
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