Robert Bork, of the Chicago School, once said, “The inconsistency both of [antitrust] doctrine and of application is well known to antitrust lawyers. It makes their practices lucrative and their clients’ lives wretched.” One would be hard pressed to find a better example of what Bork referred to as the subjectivity in the creation, application, and enforcement of antitrust laws than the National Football League (NFL). Most assuredly throughout history, so long as businesses have participated in capitalism, there have been firms who adopt and participate in anticompetitive, collusive strategies that violate U.S. antitrust doctrine, all in the search for monopoly profits. What is so unusual about the NFL is that: 1). It flaunts antitrust laws so overtly in plain sight and in full public view and 2). Government not only ignores antitrust violations by the NFL, it expressly protects the NFL from antitrust enforcement.
The NFL is an $8 billion plus government blessed cartel of 32 independently owned teams, who collude through a collective governing body to control: market entry by restricting the number of teams; what markets teams are located; who is eligible to play in the league (including age discrimination); who is eligible to own teams; ticket prices; revenue sharing (from higher revenue teams to low revenue teams); and broadcasting rights for all teams to name a few.
Arguably, the most profitable antitrust protection afforded to the NFL was granted by Congress via the 1961 Sports Broadcasting Act (SBA). The NFL’s impetus in getting SBA enacted was to restrict broadcasting rights competition between the different teams and allow all the teams to legally collude to restrict the output of broadcasting rights. That is, the NFL wanted to avoid price competition between its different teams and gain monopoly profits. As a trade-off, games were to air on the broadcast networks (ABC, NCB, and CBS) widely available over-the-air for free to the public. This was, of course, in addition to the NFL agreeing to put a team in New Orleans in order to get to powerful lawmakers from Louisiana to vote yes on the bill (and that is how the Saints came to be).
In what is viewed as an additional effort to extract more monopoly profits (at the expense of consumer surplus), the NFL has been taking more and more games off the free broadcast channels and putting more games on the NFL Network, the Sunday Ticket only available to DirecTV customers, and other channels like ESPN. The SBA did not contemplate this action and was predicated on it being in the public’s interest for these games to be offered on free broadcast networks. The NFL has also monopolized all the modes of production and distribution of NFL games. Should the NFL continue to enjoy this antitrust exemption and act against the public interest in limiting the public’s ability to widely see these games (note: most NFL stadiums are also publicly financed)?
It is worth mentioning that none of the preceeding has addressed government not enforcing antitrust laws by allowing the NFL and AFL to merge in 1966 (based on both league’s claims that competition between leagues was becoming cost prohibitive and hurting profits), the USFL’s antitrust victory against the NFL where the court awarded damages of $3 ($1 trebled) even though a court ruled that the NFL’s predatory tactics led to the USFL’s demise, NFL’s protection against antitrust complaints filed by unionized employees (granted in a 1996 Supreme Court case), or the NFL colluding to engage in age discrimination in eligibility requirements for players.
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I would like to add a couple of points to this.
ReplyDeleteYou can also mention the blackout rule that is in effect regarding NFL games. That rules goes something like this: If a team doesn't sell out its non-premium seats 72 hours prior to kickoff the game will be blacked out in the home teams market. The definition of home market is 75 miles away from the stadium in all directions as well as secondary markets. A team can request an extension of the 72 hour deadline if it close to selling out the remaining tickets. So if it isn't sold out the people in the home teams city can't see the game live on TV.
This might seem harsh but consider this: prior to 1973 all home games were blacked out in the home market, even if they were sold out. It was an Act of Congress in 1973 which implemented the current system of the 72 hour rule. So Congress has at least done something although it was a long time ago.
The NFL also offers a package called Game Rewind which allows you to see archived games in HD quality after they have aired. The current package includes games from the 2008 and 2009 seasons. The games on Sundays become available immediately after the conclusion of Sunday Night Football on NBC. So you can easily view NFL games (although not live) with this package. It also is not that expensive, only $50. The service does not work while there is a NFL game being played.
The NFL also offers a fantastic package to people based outside the U.S. which is viewing all of the games live in HD quality. The package is called Game Pass and is pretty much the same thing as the Game Rewind package, the only difference being that you get the games live, don't get the 2008 season archived and you can watch the NFL Network as well.