The League Dug Its Own Hole, Now Lord Rog Must Accept It.

Generally, I don’t think well of Congress butting in to the professional sports leagues — it usually results in a highly obnoxious and pathetic form of Kabuki in which all parties involved claim to be concerned about something “for the consumer” or “for the children” (please see the steroid hearings of two years ago and note this when Selig, Fehr, et al return to Congress post-Mitchell Report.) I find Sen. John Kerry’s threat to investigate the NFL if it did not make this Saturday’s Patriots-Giants NFL Network exclusive available on broadcast noxious, as if a football game was really such a primary concern to the elected officials who literally have matters of life and death that they would be better off addressing.

Yet I have very little sympathy for the league, which has now decided to simulcast Messrs. Gumbel and Collinsworth on both NBC and CBS Saturday night. The onus comes from threats from Sens. Patrick Leahy and Arlen Specter (committee chair and ranking member respectively, of the Senate Judiciary Committee), who said they would look into the league’s anti-trust exemption if the game was kept solely on the NFL Network.

Like many things about the modern NFL, the exemption came during the reign of Pete Rozelle as commissioner, and the merger of the NFL and the AFL was dependent upon securing an anti-trust exemption for the new league — which the league has already violated the spirit of, seeing that Rozelle pledged in front of Congress that no existing team at the time would move out of its metropolitan market. Regardless, once you go pleading with the federal government for a competitive advantage of any sort, you now find yourself subject to its whims, and that is where Lord Rog and the owners find themselves in the middle of a stupid war with cable in which the NFL is completely in the wrong. Even in the press release, the NFL cannot get over itself and the supposed importance of its house organ:

“NFL Network is a programming service of great interest to fans and should be broadly distributed by the cable industry,” said NFL Network President and CEO Steve Bornstein. “The only channel devoted 24/7 to America’s favorite sport is not programming that should be relegated to a poorly promoted, pay-extra sports tier that takes advantage of our fans’ passion for the NFL. A few of the biggest cable operators have refused to negotiate. We call on them to do what’s right for their consumers and negotiate agreements for NFL Network that make sense for everybody.”

Despite the dominance of football in the American sporting landscape, to demand placement on a basic cable tier for the amount of money that the league requests is audacity writ large. Most sports fans pay for a sports cable tier — I do; it’s the only way I get Fox Soccer and ESPN News — and would be more than happy to have the NFL Network on it for what we pay. What the NFL fails to realize is this: there are millions of non-sports fans in this country who don’t want to be saddled with higher basic cable bills for a channel they don’t care about. It’s why the issue of a la carte cable programming has gotten ink and air time in the past couple of years. Barring that, the NFL Network is a niche network, one catering to the super-dedicated sort of football fan who will watch related programming for a good chunk of the day, even during the off-season, when there are no games.

So, in the wake of this stalemate, the league has continued to restrict access to games via premium channels, and now, Goodell will have to reap what he and advocates like Pat Bowlen and Jerry Jones have been baiting for — a historical game that could drive up product demand and tip the scales winds up being negated for their pet channel via a simulcast.

You ask for favors, you have to give them back. And while I understand the complaint Paulsen at Sports Media Watch has with the entire concept of political pressure being used, let us not weep for a league that decided to allow the federal government a say in its operation when it asked for an exemption from the normal regulations on business in the U.S. Certain tax exemptions for the league and for its owners, approved by the voters to finance mega-stadiums on part or all of the public dole, come with unintended consequences. The league may figure this out if someone in Washington gets the bright idea to question NFL Sunday Ticket’s sole availability on DirecTV.


12 Responses

  1. I work in the industry, so I’m here to tell you: a la carte programming will RAISE, not lower, anybody’s cable bill. So if you’re a supporter, hopefully it’s because you want something even surer than Parental Control to keep your kids (or spouse, or roommates) away from channels you don’t want them watching.

    One of the reasons it’ll cost more is technical: in order to sell channels a la carte, they will need to scramble ALL their programming instead of just the premium channels. That means everybody will need to have a cable box to unscramble it. Which means they’ll be paying a rental fee, which something like 30-40% of my company’s customers are not currently doing.

    And that’s leaving out little issues like “the Golf Channel/HGTV/Trio/etc. don’t have enough viewers to exist unless they can be bundled with channels that are actually popular enough to make money.”

    But anyway: the NFL is wrong on this one, I agree. They’re throwing their weight around and creating ill will among their customer base, demanding concessions from their “partners” in the telecommunications industry that are not in their interest, and generally acting like you expect a monopoly to act.

    It’s a sad thing to see, but I expect it to get worse — as the NFL lays claim to even more telecasts for its own network, thus creating more games people can’t watch — before it gets better — as Congress, no doubt “assisted” by lobbyists from the big cablecos, forces a more equitable arrangement on the league.

    True, in a perfect world our government would have bigger fish to fry, but this case is clear-cut enough that legislators can legitimately claim to be acting in the public interest, and I think Goodell is concerned enough about the league’s image that he’d never dare try to go another fifteen rounds in the courts if some legislation actually makes it out of committee.

    And best of all, it’s an issue that crosses party lines, so the league can’t even count on the usual D-vs.-R food fight to slow things down. As you said in your post, the league made a deal with the devil that allows them to break the ordinary rules of capitalism, so even reliably pro-business Republicans aren’t likely to be sympathetic to their situation.

  2. Great article!

  3. Leaving aside the anti-trust exemption and the involvement of Congress in the current dustup between the NFL Network and the cable systems, I am at a loss to understand the vitriol directed at the NFL for their position on this.

    Their product is in high demand. They feel they might be able to generate mroe revenue by distributing this product themselves than by contracting with outside vendors. They don’t want to REPLACE the outside vendors (at least not immediately) but AUGMENT the number of games available each week by charging distributors (and, in turn, consumers) a premium for the service. And as leverage to come to an agreement that will generate the most revenue, they are using the only bargaining chip they really have: games viewers can’t get elsewhere.

    Here is the part that I think most sports fans don’t get. Football fans do not have an inherent right to more and more football without paying for it in some manner. I suppose an argument could be made that the local markets have a right to free access to their team, but the NFL has shown no inclination to abandon the protection they offer local markets.

    Why all the furor? Both the NFL and the cable companies are looking out for their interests. Neither of them care about the fans (other than that they continue being fans). neitehr side is being more or less greedy than the other.

    To my mind, since the NFL owns the product, it is up to them to decide how to distribute it. Their gambit to force cable systems to put the network on basic cable tiers will either work or it won’t. If it doesn’t fans will either pay a premium to see these out-of-market games or they won’t. If they will, the NFL Newtork succeeds. If they won’t, it fails. I’d ask all you folks with access to a keyboard to let the chips fall where they may, but I guess that’s expecting a little too much.

  4. DJ Murphy: “Leaving aside the anti-trust exemption” is to leave aside the root cause of all the vitriol. When Wal-Mart is being too greedy, it can be punished by market forces — its customers will go elsewhere. When a true monopoly (like the NFL) is being too greedy, customers are left only with Hobson’s choice. That’s why anti-trust legislation was put in place to begin with.

    Furthermore, cable systems would be happy to put the network on basic cable tiers if the NFL was asking basic-cable-tier prices for the programming. Instead they are asking for a much higher rate, for a product that is only of seasonal interest to the vast majority of consumers. The cable industry is already under intense pricing pressure, and forcing them to make a choice between raising their rates to all consumers to benefit the NFL-loving minority or making their stockholders eat the increase doesn’t exactly endear them to a content provider.

    If I apply for a new job, I certainly have the right to demand 150-200% the salary of everybody else working at the same job, just as the employer has the right to tell me to go whistle. But ask 100 people whether I am more unreasonable for asking or the employer is more unreasonable for refusing, and I doubt the numbers will look anything like 50-50.

  5. I understand that Ajax. My point mostly is that once the employer tells you to “go whistle” you adjust your expectations and try again. Unreasonable or not, the NFL is well within its rights to ask and the cable companies are well within their rights to tell it to pound sand.

    Trying to make one or the other party into the “bad guy” through the media is simply another negotiating tactic. I just wish they would both go about the business of working their issues out without trying to involve me. I would furthermore like it if media outlets (who also tend to own cable companies) stopped trying to tell me that the NFL is the bad guy here. There is plenty of blame to go around. I can make my own judgements about that.

    I happen to be sympathetic to the NFL’s position because they own the product. It’s theirs to do with as they wish, even if what they wish ends up damaging the relationship between the league and its consumers.

    If the cable companies don’t want to carry the network on a basic tier for the price the NFL is demanding, then just don’t do it. The market can work here too. People can watch college football or the NBA or American Gladiators or The Office or any of a thousand pay-per-view movies. Oh, and they can also watch any of the five other NFL games they usually have access to in any given week.

  6. I happen to be sympathetic to the NFL’s position because they own the product. It’s theirs to do with as they wish, even if what they wish ends up damaging the relationship between the league and its consumers.

    Well, as one of those consumers, what I want is for it to work out for me, period. Which means that the sooner the party with the unreasonable demands — the NFL, in my judgement — blinks, the better. In your example above, the NFL is not adjusting its expectations, and is instead holding its breath until it turns blue. And that attitude from an organization that enjoys anti-trust exemption is abhorrent.

    So if media pressure (self-interested or not) shames the NFL off their high horse and into a good-faith negotiation, that’s a good thing in my opinion. Because a Hobson’s choice of “pay what we’re asking or go fuck yourself” does not meet my needs.

  7. So what if it’s a Hobson’s choice? Do you need the NFL Network that badly? Maybe you do. I certainly don’t. I’m quite content to watch my hometown team and the three or four other games offered each week on the national networks and ESPN. Do the cable companies need the NFL Network? Apparently not at the asking price or they would have caved into what you call the NFL’s unreasonable demands.

    Getting worked up by what you seem to perceive as arrogance isn’t really productive. If the NFL is being unreasonable then all the cable companies need to do is stick to their guns. But implying the NFL doesn’t have the right to ask for whatever they want is simply wrong. If the league has badly miscalculated their negotiating position and refuses to adjust it, then their fledgling effort at becoming TV producers will probably fail. Is the extra few games a year and coverage of the Combine that important to you? If it is, so be it. To me it isn’t.

    A Hobson’s choice is still a choice.

  8. DJ, I get most of my news and information on the internet, and my feeling is the NFL is using a whole lot of propaganda to paint the cable companies as the villains. The NFL advertises on many football websites (with requests that NFL fans complain to the FCC about the issue), sends out emails to NFL fans, etc. They’re doing a lot to try frame or spin the story the way they want, that “Big Cable” is a tyrannical juggernaut keeping the NFL Network away from fans.

    I don’t think either side is right or wrong on principle: the fight is over an amount of money. The NFL is demanding a very high price to put the Network on regular cable packages–and when “Big Cable” refuses to pay that high price, the NFL is targeting fans with the message that it’s all Big Cable’s fault. I’m sympathetic to neither side on principle; I’m just tired of the stories being spun by the NFL to get fans to blame cable companies entirely.

    Let’s also appreciate the irony that an industry with an anti-trust exemption is telling fans to complain to the FCC because supposedly “Big Cable” is screwing them over. I suppose it makes sense: the government has given the NFL a break which has allowed it to grow and profit as it has, and when the NFL hits opposition, it wants people to complain to a government agency to get help.

    But I also don’t care, really: I’ll watch my local team and whatever other games I can watch for free (I don’t even get ESPN because I’m a cheapskate).

  9. in which all parties involved claim to be concerned about something “for the consumer” or “for the children”

    Musberger brought this argument in the booth last night. That he was glad it would be simulcast because of “all the youngsters who might not have access to the NFL Network.” Sweartagod.

  10. Holly – oh dear. Gag me. We do enough for the children in this damn country, how about something for the adults? Anyway, it’s nice to see Musberger cares so deeply.

    DJ – The NFL has the right to ask its price, but since it asked Congress for its exemption decades ago, it should expect blowback — especially when team owners have no compunction about asking cities and counties to subsidize stadia under threat of relocation. It won’t kill me if I don’t get NFL Network; I don’t really miss it that much and wouldn’t have been that broken up if the NFL had decided to keep Pats-Giants on the Network exclusively. (I enjoy radio broadcasts a good deal.) But the NFL has to figure out that at some point, it’s taking steps to alienate fans with its TV operations rather than attract them.

  11. […] January 14, 2008 by Signal to Noise Like I’ve written previously with regard to the whole NFL Network/cable/Sunday Ticket issue, I find Congressional involvement in professional sport devolves into the worst sort of […]

  12. […] to request these things, as far as MLB and the NFL go. These leagues have asked for and received anti-trust exemptions that provide them with a giant leg […]

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