Report No. DC-2611 ACTION IN DOCKET CASE June 9, 1994 FCC FINDS NO SIGNIFICANT MOVEMENT OF SPORTS PROGRAMMING FROM FREE TO PAY TELEVISION; CITES COLLEGE FOOTBALL CONCERN (PP DOCKET 93-21) The Final Report on the FCC's sports migration inquiry, adopted today, finds that there has not been significant migration of sports programming from broadcast to subscription media, but expresses concern about a decline in broadcast coverage of college football games in some markets. The Commission stated its intention to monitor sports programming availability and to act promptly, consistent with its statutory authority, should any significant threat to that availability develop. In Section 26 of the 1992 Cable Act, Congress instructed the Commission to conduct an examination of "the carriage of local, regional, and national sports programming by broadcast stations, cable programming networks, and pay-per-view services," and "the extent to which preclusive contracts between college athletic conferences and video programming vendors have artificially and unfairly restricted the supply of the sporting events of local colleges for broadcast on local television stations" or are prohibited by existing statutes. Congress directed the FCC to submit to it an Interim Report by July 1, 1993, which the Commission has done, and a Final Report by July 1, 1994, including legislative or regulatory recommendations as appropriate. The Commission defined sports programming migration as "the movement of sports programming from broadcast television to a subscription medium (i.e., one for which viewers pay a fee.)" The inquiry focused on professional baseball, football, basketball and hockey and college football and basketball. The Commission looked at the time period from 1980 to the present and examined local and national telecasts. (over) - 2 - The Commission found no evidence of migration of National Football League or college basketball games. At the national level, it saw no evidence of migration of professional basketball or hockey games. In fact, it found instances of "reverse migration" in hockey at the national level. At the local level, there have been some declines in broadcast coverage of professional basketball and hockey, but no overall pattern of migration. The inquiry determined that national broadcast coverage of regular season Major League Baseball games has declined, but found evidence that the drop is due to reduced demand rather than migration. Local broadcast coverage of baseball has increased for most teams, but declined significantly in a few cases. The Commission concluded that there was no pattern of migration of local baseball games. ESPN provides some national cable coverage of regular season baseball games. While ESPN has exclusivity vis-a-vis local broadcasters on Wednesday nights, this appears to have had little effect on total games broadcast. Rather, it has been associated with an increase in games televised on days other than Wednesday. The Commission found evidence of a decline in college football broadcasts in some markets between 1984 and 1993, but could not isolate the cause of the decline. The Commission expressed concern about the decline, but noted that new college football contracts now being negotiated may lead to an increase in network coverage. "Preclusive contracts" are defined in the 1992 Cable Act as contracts between college athletic conferences and video programming vendors that prohibit local television stations from broadcasting live games of local college teams that are not carried live by a local cable system or prohibit tape delay broadcasts of local college games that are not carried live or on tape delay by a local cable system. The Commission's inquiry found no evidence of such preclusive contracts for college basketball, but questions were raised in the case of college football. In the Interim Report the Commission noted that it would use the "rule of reason" framework to analyze contracts of this type, as suggested to it by the Department of Justice. The Commission's analysis of typical contract terms suggested that, without the sort of factual evidence presented at a full-scale trial, it could not determine whether the contracts violated the antitrust laws. There was no suggestion that the contracts might violate other statutes. - 3 - The Commission found that there is a substantial amount of sports programming available on broadcast television, including the "marquee" events of all the major sports. Because the Commission's interest in the availability to the public of a diverse menu of programming encompasses both sports and non- sports programming, the Final Report concludes that additional government intervention to promote free access to sports programming, whether via regulation of preclusive contracts or by some other means, is not warranted at this time. The Commission found that no legislative or regulatory recommendations in the area of sports programming migration are necessary. It did, however, note its continuing concern regarding broad and economical public access to sports programming and said it would take action if any significant threat to such access developed in the future. Moreover, the Commission urged interested parties to file legitimate complaints in the event that current or future college football contracts artificially and unfairly constrain local stations' access to local teams' games and committed itself to pursue such complaints vigorously and promptly. In addition, the Commission said it would transmit the Final Report to the Department of Justice and the Federal Trade Commission. Action by the Commission June 9 by Final Report (FCC 94- 149). Chairman Hundt, Commissioners Barrett, Ness and Chong, with Commissioner Quello concurring in the result and Commissioners Quello and Barrett issuing statements. - FCC - News Media contact: Rosemary Kimball at (202) 418-0500. Office of Plans and Policy contact: Jonathan Levy at (202) 418-2048.