Senators Threaten To Rescind NFL Antitrust Exemption

An anonymous reader writes In response to the FCC's discontinuation of rules that support the NFL's blackout policies, the NFL issued a statement indicating that it would nevertheless continue to enforce its blackout policies through its private contract negotiations with local networks. On Wednesday, however, Senators John McCain (R-AZ) and Richard Blumenthal (D-CT) announced a bill that would rescind the antitrust exemption that enables the NFL to demand blackouts in the first place and formally warned the NFL to abandon blackouts altogether. The antitrust exemption gives sports leagues "legal permission to conduct television-broadcast negotiations in a way that otherwise would have been price collusion" and further allowed the formation of the NFL from two separate leagues. Meanwhile, the NFL enjoys a specialized tax status and direct monetary support from taxpayers to build arenas and stadiums.

Comments

Live by the sword, die by the sword

[JoeyRox]

The NFL obviously paid off some group of politicians to achieve their non-profit status. Now a new set of politicians have their hand out for another sweaty envelope filled with cash.

Re:Live by the sword, die by the sword

[DoofusOfDeath]

The League of Extraordinary Lobbyists?

Re:Live by the sword, die by the sword

[mythosaz]

Only the league office is nonprofit. The teams are not. It's not particularly nefarious.

Re:Live by the sword, die by the sword

[amiga3D]

When you piss off Congress to the point that they ignore their usual Leftie vs RIghtie tift and decide to work together.....you're fucked.

Re:Live by the sword, die by the sword

[rmdingler]

Is there another nonprofit that pays its CEO in excess of $40 million U.S.?

NFL Commissioner Roger Goodell would be a fool to step down.

Re: Live by the sword, die by the sword

[mysidia]

I hate to disappoint you, but the FCC note says otherwise

The Federal Communications Commission repealed its sports blackout rules, which prohibited cable and satellite operators from airing any sports event that was blacked out on a local broadcast station. ....

Elimination of this rule, however, may not end all sports blackouts: sports leagues may choose to continue their private blackout policies through contractual arrangements with programming distributors. ... ...

Re:Live by the sword, die by the sword

[Stan92057]

Yes, I agree blackouts suck, but at the end of the day NFL/etc have the right to control distribution of their content.

That would be true if they didn't except taxpayer money/tax exemptions/tax breaks but they do and that money comes conditions. I say F the NFL,MBL,NHL owners save up your own dam money and build your own dam stadiums without having to cut school budgets and many other social needs.

Re:Live by the sword, die by the sword

[discovercomics]

Actually Blackouts are great. When the Jaguars are blacked out I get to see some real football.

Re:Live by the sword, die by the sword

[oh_my_080980980]

Hello ass hat who doesn't understand that football games are subsidized by tax payer money. The argument is that airing a game that does not sell out ticket sales cuts into their profits. The irony is the NFL makes most of it's money through TV contracts making that argument bogus - which is what the FCC found.

Could they get any more special treatment?

[damn_registrars]

The NFL also gets nonprofit status on top of this. Could we do more to support them?

Re:Could they get any more special treatment?

[DoofusOfDeath]

The NFL also gets nonprofit status on top of this. Could we do more to support them?

I dunno. Let's rename them to the Israeli Football League and see what happens.

Re:Could they get any more special treatment?

[snsh]

Don't confuse "nonprofit" with "charity". While virtually all charities are nonprofits, not all nonprofits are charities.

The NFL being nonprofit is simply a reflection of how the league is organized and equity and earnings are allocated. In this case, most of the equity in the NFL is held by individual teams and the teams' billionaire owners, and all the earnings are targeted to those same teams. The league acts as just a vehicle for the teams to coordinate functions like marketing, scheduling, and league matters. So when the league gets $10 billion in TV contracts, all the profit is distributed to the teams, which then pay taxes on it. Being structured as a nonprofit, the NFL league has trustees and beneficiaries. It could reincorporate as a for-profit, in which case it would have owners and shareholders. In that case, each team owner could be granted one share. If that were to happen, Paul Allen instead of receiving one tax bill for $100 million for the Seahawks, would get two tax bills for $70 million (for the Seahawks) and $30 million (for the NFL share). From the taxman's point of view, it's pretty much the same.

There's nothing sneaky about the NFL being a nonprofit. It's just reflects how the league was originally set up.

Re:Could they get any more special treatment?

[floodo1]

You just figured out why "non-profit" is wishy-washy ... people don't work for free and non-profits pay people so at what point are you hiding profits in people's salaries?

I wish McCain would retire

[the_skywise]

This is obviously a payback to Comcast...

The point of having the blackouts to begin with is AGREED upon by the very cities that McCain is claiming to "protect". It brings foot traffic into the cities and increases sales to nearby restaurants and bars and let's not even go into ensuring that the stadium (which shares profits with the towns) is as near capacity as possible.

Now, if we want to completely privatize the stadiums I'm all for letting the free market do its thang. But, as McCain oddly points out, these are NOT private entities but basically defacto public partnerships.

Re:I wish McCain would retire

[AuMatar]

The point of the blackouts is to extort money from the fans for an overpriced live experience. If they really wanted to sell out every game, they should study basic economics and drop prices. They'll still make ridiculous amounts of money.

Re:I wish McCain would retire

[rahvin112]

Stadium revenue isn't even 5% of the teams earnings anymore. It's so ridiculously small in fact that it's the entire reason cited by the FCC for abolishing the blackout restriction. They could literally give the tickets away and it wouldn't impact earnings in any significant manner.

The reason they don't cheapen the tickets is that by keeping prices high the owners can use the tickets like money. Court-side tickets are so expensive when they hand the mayor a season's worth of tickets he's bound to whatever the owner wants because they've given him the equivalent of $100K. But because they set the pricing on the seats they can declare the tickets worth less than $5. Those high priced tickets are essentially their own untraceable money that they can print at will.

Welcome to the free market

[Snotnose]

You charge too much for tickets/parking/hot dogs/beer, people don't go see your games. Threatening to not allow fans who won't bend over and lube up see the game is IMHO seriously bad business practice. Want to entice fans to games? Don't charge $500 per game for a family to go.

/ haven't been to a game in 15 years
// prefer watching it on TV
/// except for the damned commercials
//// then again, when I went to the game they had "commercial timeouts".

Re:You underestimate football's popularity

[geoskd]

The same could be said about pretty much everything. The things you like are incredibly boring and stupid to a lot of people.

Yes, but I'm sure that no one spends huge amounts of their tax dollars supporting his boring recreational activities...

Re:You underestimate football's popularity

[aardvarkjoe]

Football is *REALLY* *REALLY* stupid. I can't get my head around the overwhelming exuberance that people feel over this brief period of watching people chase a ball around a field.

Tell me, is it more or less stupid than watching a bunch of people dress up in spandex and pretend to fly a spaceship?

Re:You underestimate football's popularity

[ranton]

The same could be said about pretty much everything. The things you like are incredibly boring and stupid to a lot of people.

Yes, but I'm sure that no one spends huge amounts of their tax dollars supporting his boring recreational activities...

National parks, PBS, National Endowment for the Arts, etc. There are plenty of was the government funds recreational activities.

According to Grantmakers in the Arts, public funding in the arts comes to about $1.14 billion per year. With the NFL receiving $146 million per year, the NFL is still getting a sizeable amount of money in comparison. But with about 1 in 3 Americans watching at least some football each year, football probably entertains at least as many people as the entire NEA funding does, so perhaps it is money well spent.

After the NLF, how about Wall Street?

[Required Snark]

If someone in Congress is willing to stand up to corrupt publicly subsidized major league sports, what about doing something about corrupt publicly subsidized financial institutions that have no actual oversight?

First, the public subsidy.

Fed funds, the U.S. overnight inter-bank lending rate, opened 0.08 percent, within the Federal Reserve’s target of zero to 0.25 percent, ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement.

Fed funds traded from 0.06 percent to 0.3125 percent yesterday, according to data posted on the Federal Reserve Bank of New York’s website. The fed effective, or a volume-weighted average of rates on trades arranged by major brokers, was 0.09 percent.

This this is on Oct. 2 2014: 0.09% is free money. Who gets this free money: the big banks, B of A, Citi, Chase. Also the top four investment firms which are also banks: #1 Goldman Sachs, #2 Morgan Stanley, #3 JPMorgan Chase, #4 Bank of America Merrill Lynch. Note the overlap, there is no meaningful difference between banks and brokerage firms.

So what is the result? Why the Fed's Zero Interest Rate Policy Isn't Working.

But, the Fed’s problem – like Japan a decade ago – is as the International Monetary Fund puts it in its latest financial stability report, the economy is “bifurcated”. Many large American companies, particularly those with global operations, are highly profitable and liquid. Unsurprisingly, for them “bank lending conditions and capital market financing remain easy”, the IMF notes.

But many small and medium-sized companies – or the entities that typically create jobs inside America, not overseas – find it hard to raise funds. A survey conducted by the International Franchise Association in Washington, for example, notes that whereas in March half of its members expected credit conditions to improve soon, now less than a quarter expect any easing; even as Treasury yields fall.

And the lack of any effective oversight: Bank of America fined $7.65M over accounting blunder.

The Wall Street Journal reports the SEC charged BofA with breaking securities laws pertaining to record-keeping and internal controls after the bank disclosed in April that it had discovered a nearly $4 billion accounting error.

So 7,650,000 divided by 4,000,000,000 = 0.019125 or 1.9125%. Note that this error existed for years, and it meant that BofA saved a huge amount of money by having $4 billion less in capital reserves then was required.

But to understand what the fine really means it should be compared to the market capitation (total worth on the stock market), which on Oct 2 2014 was $177 billion. So 7,650,000 divided by 117,000,000,000 = 4.32203e-05 = .0000432203 = 0.00432203%. Ohh, that must have really really hurt.

No one was held accountable. No one lost their job, was demoted, got a bad mark on their permanent record. The stock holders end up paying the fine. That's what it means to have no effective oversight.

So the NFL is in trouble and B of A gets a fine valued at 0.00432203% of their current net worth. That is why my brain hurts.