By Paul M. Pedersen and Ryan M. Rodenberg
High school football on Friday nights.
Saturday afternoons filled with college football.
Professional football all day Sunday.
This is the game schedule every football aficionado has come to know and love during the past five decades. But it wasn’t always so. It took an act of Congress nearly 50 years ago – the Sports Broadcasting Act of 1961 (“SBA”) – to set forth the easy to remember schedule.
The SBA is codified at 15 U.S.C. §§ 1291-1295. The federal statute was the result of a compromise between federal legislators and professional sports leagues that allows the National Football League (“NFL”), Major League Baseball (“MLB”), National Basketball Association (“NBA”), and National Hockey League (“NHL”) to pool broadcast rights involving multiple teams into a single package without running afoul of the nation’s antitrust laws. In exchange for the explicit antitrust exemption in the lucrative area of sports broadcasting, the NFL agreed to limit the scope and timing of its telecasts. Specifically, 15 U.S.C. § 1293 mandates that no NFL games may be telecast “on any Friday after six o’clock postmeridian or on any Saturday during the period beginning on the second Friday in September and ending on the second Saturday in December.” In this way, Congress was able to retard what may have been viewed as the creeping imperialism of NFL football over the then-novel television wavelengths.
The presence of the SBA was a proverbial “elephant in the room” during oral arguments on Jan. 13, 2010, in the U.S. Supreme Court case of American Needle v. NFL. The official transcript indicates that the SBA was not specifically referred to during the hearing, but it was implicated in important ways a number of times. The American Needle case centers on the antitrust legality of the NFL’s exclusive agreement with Reebok in the area of team and league intellectual property merchandising. Petitioner American Needle, a manufacturer of athletic hats and other apparel, appealed to the nation’s highest court after the U.S. Court of Appeals for the Seventh Circuit found the NFL to be a “single entity” and immune from antitrust liability under Section 1 of the Sherman Act.
As is frequently the case during oral argument at the Supreme Court level, individual justices directed hypothetical questions at counsel for both sides during the Jan. 13, 2010, hearing. The justices probed, looking for the outer limits of the positions being argued by both sides. Both Justice Kennedy and Justice Sotomayor asked hypothetical questions pertaining to the scheduling of games on Saturday versus Sunday, but curiously omitted any direct mention to the SBA. A discussion of the SBA-related implications was left to amicus briefs filed in the case.
The amicus brief filed jointly by the four major player unions (e.g. NFLPA, MLBPA, NBPA, and NHLPA) and other friend of court briefs filed on the petitioner’s side emphasized the importance of a pro-NFL decision in American Needle on sports broadcasting. The aforementioned joint players’ association brief posited that:
[The SBA] would be rendered nugatory if the [Supreme] Court were to hold that the single entity defense absolves sports teams from accountability under Section 1 [of the Sherman Act] for unreasonably restraining competition in labor or broadcast markets. Indeed, the specific policy trade-off that Congress set forth in the SBA – protecting both college football and high school from NFL broadcasts, in exchange for the limited antitrust exemption granted the NFL – would be eviscerated.
The “trade-off” referenced in the brief is a noteworthy provision in the SBA. 15 U.S.C. § 1294 outlines Congress’s intent to limit the scope of the SBA. In relevant part, this sub-section reads:
Nothing contained in this chapter shall be deemed to change, determine, or otherwise affect the applicability or nonapplicability of the antitrust laws to any act, contract, agreement, rule, course of conduct, or other activity by, between, or among persons engaging in, conducting, or participating in the organized professional team sports of football, baseball, basketball, or hockey…
If the U.S. Supreme Court were to extend broad antitrust immunity to the NFL (and similarly situated professional sports leagues), this portion of the SBA, at a minimum, would seemingly be rendered null and void.
In a 2007 Scottish Journal of Political Economy article entitled “Broadcasting and Team Sports,” Stanford University economist Roger Noll penned the most exhaustive recent inquiry into the economics of pooled television rights by professional sports leagues. Noll found that the sale of broadcast rights is the largest revenue generator for such leagues. In addition, Noll concluded that “consumers are better off if television is competitive [and] centralization of rights sales does not improve competitive balance or benefit financially weak teams” (p. 400). Although Noll’s dual conclusions run counter to the NFL’s position, his revenue-related finding demonstrates the importance of broadcasting in the sports industry.
If all or part of the SBA were to be judicially overruled in a decidedly pro-league decision in American Needle v. NFL, the broadcasting of professional sports would be forever altered. More generally, the consumption and overall dissemination of pro sports would likely be changed. Subsequent Congressional hearings to legislate away portions of the decision would probably follow. The scheduling of high school, college, and professional football games on Friday, Saturday, and Sunday would be but one aspect.
Paul M. Pedersen, PhD is the director of the sport management doctoral program at Indiana University-Bloomington. He is the editor of International Journal of Sport Communication and the co-author of two textbooks to be published in 2010 – Contemporary Sport Management and Research Methods for Sport Management. Ryan M. Rodenberg, JD/PhD teaches sports law at Indiana University-Bloomington and is co-authoring a law review article with Jon Wertheim pertaining to the impact of American Needle v. NFL on individual sports such as tennis and golf. © Paul M. Pedersen and Ryan M. Rodenberg 2010.
