Monday, June 17, 2024

Column: An NFL trial kicks off today. Here’s how it could impact baseball’s streaming future


The mission statement is clear. You might not agree with the commissioner of Major League Baseball on everything, but you probably would agree with him on this.

“If there is one thing I could wish for, more than anything else,” Rob Manfred told me two years ago, “it would be the ability to give our fans that frictionless experience of being able to watch what they want to watch, where they want to watch.”

No more blackouts. No more driving yourself crazy trying to figure out whether your favorite team is playing on ESPN or Fox or MLB Network or a local cable channel, or on Apple or Amazon or Netflix or Peacock or Roku or whatever other streaming service might throw a few dollars at major league owners.

Within the past year, amid the collapse of local cable sports channels around the country, Manfred and his lieutenants have been pretty clear about how they would like to accomplish this: An expansion of the league’s streaming service so that you could see every game, for every team, at the same place, for one price.

What if that turned out to be illegal?

The commissioner’s office should be paying close attention to a trial set to start Thursday in U.S. District Court in Los Angeles, in which the NFL is the primary defendant against allegations that its Sunday Ticket package violates antitrust law.

The Sunday Ticket package offers access to every out-of-market game, for every team, at the same place, for one price.

The issues at trial: Bar owners allege they have to pay too much for the package because the NFL lets only one provider carry it; and individual sports fans allege they have to pay too much for the package because they have to pay to watch every team, even if they only want to watch one team.

If the NFL wins, that would be one less challenge for Manfred to worry about, on a long list of challenges before MLB could get its all-in-one place, all-for-one-price streaming service up and running.

However, if the NFL loses, how MLB might have to adjust its plan to comply with the law could depend on why the jury reached its conclusions.

MLB declined to comment on the NFL case or its potential implications for baseball. But, if the NFL loses, the first thing MLB likely would say is, “We have an antitrust exemption, so this wouldn’t apply to us.”

Maybe, or maybe not.

“There was and is a current vulnerability to baseball’s antitrust exemption,” said Christopher Deubert, a Massachusetts-based expert in sports law and the former general counsel for the Major League Soccer team D.C. United.

“Whether the broadcast agreements would be covered by baseball’s antitrust exemption, I think, is uncertain.”

That federal antitrust exemption has survived for more than 100 years, but courts repeatedly have expressed concerns about it, and legislators regularly threaten to repeal it.

In 2021, Supreme Court Justice Brett M. Kavanagh all but invited a challenge. In an opinion about a college sports case, he pointedly wrote that the baseball exemption had not been extended to other sports and had been based on the notion that “exhibitions” of “base ball” did not involve interstate commerce “even though teams regularly crossed state lines (as they do today) to make money and enhance their commercial success.”

In 2022, in a case involving the contraction of four minor league teams, the Department of Justice urged a federal court to “define the exemption narrowly.” MLB and the four minor league teams settled the case this year, before the Supreme Court could decide whether to address the issue.

What would be an example of defining the exemption narrowly? This is what Manfred told me two years ago: “I can’t think of a place where the exemption is really meaningful, other than franchise relocation, right now.”

The NFL claims an antitrust exemption for broadcasting, citing a 1961 law that allows America’s four major sports leagues to sell their rights for “sponsored telecasting” as a league, rather than on a team-by-team basis. The plaintiffs challenging the NFL allege that “sponsored telecasting” means free, over-the-air commercial broadcasts, not pay-TV options such as satellite and streaming. If the jury agrees, that could imperil Manfred’s streaming vision.

And so could this: In a case against MLB and the NHL, one that was ultimately settled, U.S. District Judge Shira Scheindlin wrote in 2012: “Making all games available as part of a package, while it may increase output overall, does not, as a matter of law, eliminate the harm to competition wrought by preventing the individual teams from competing to sell their games outside their home territories in the first place.”

Your eyes are starting to glaze over. I get it. So here’s the point, because this is the point of antitrust law: On balance, would the courts consider Manfred’s plan good or bad for consumers?

There would be little argument that putting all the games on one streaming service certainly would be convenient for fans.

“Having to search around for where the game is every day is a pain in the butt,” said Penn State professor Steve Ross, who has written extensively about sports and antitrust law.

“I do it every single day. I go online and say, ‘Where is this game? Is it on MLB Network? Is it subject to blackout restrictions? Where do I go to watch it? ’ ”

But would the convenience of an exclusive home for baseball provide fans with a good deal?

“Would a complete takeover by Major League Baseball actually increase output by making this available everywhere at a decent price,” Ross said, “or reduce output because Major League Baseball would just be charging a boatload of money?

“That is a factual question that would be subject to antitrust challenge.”

The current MLB streaming package offers access to out-of-market games: $119.99 per year for games of all 30 teams, or $104.99 per year for the games of whatever one team you want to watch.

That may or may not be a better deal than letting each team sell its own streaming rights.

“Maybe the Yankees would charge $500 and the Twins would charge $20,” said Deubert, the expert in sports law.

It is impossible to know what baseball’s broadcast future might look like next year, let alone over the next decade. Bally Sports, home to the Angels and 11 other MLB teams, is mired in bankruptcy proceedings and might not exist next year.

It is impossible to know whether the Yankees and Twins might ever agree to pool streaming revenues, given how much more the rights to air Yankees games might be worth.

Still, Deubert said, every major American sports league will follow the legal proceedings in Los Angeles very closely.

“If the NFL loses,” he said, “all the other leagues for sure will be forced to change their packages in some way.

“Major League Baseball would have some hard decisions to make in evaluating the degree to which they wanted to change their package or assert that it is exempted by the antitrust exemption. They could potentially be challenged on that, and then you would have a real live issue.”

For now, you have a real live quandary: Could a law intended to protect consumers somehow prevent Manfred from giving baseball fans what they say they want?



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