In a recent filing before the FCC, three different local broadcast stakeholders, the National Association of Broadcasters (NAB), Fox and Sinclair, asked the regulators to step in and, well, regulate the spread of pro sports rights to streaming.
They asked for a number of remedies to ameliorate a situation they said was harming both consumers and broadcasters, all three filings making the claim that broadcasters’ inability to make money from sports rights would impact their ability to cover local news, which has a negative impact on communities across the country.
The remedies sought, however, sound like every broadcaster’s Christmas list:
- End local and national broadcast ownership caps
- Speed up the transition to ATSC 3.0
- Do away with the Sports Broadcasting Act of 1961
Why It Matters
Let’s start out with the basics: Yes, consumers hate that sports are now all over the place and that it takes good Googling skills to find the whereabouts of a game you want to watch. A recent Hub Entertainment study found that 87 percent of sports fans experienced some level of frustration at the complexity of finding sports content, with 25 percent reporting they were “very frustrated.”
So there’s that and it’s not nothing.
Nor is the fact that local TV is seemingly in a death spiral, caught between younger audiences’ predilection for both the internet and streaming and the looming inevitability of a day when the four big TV networks stop making original programming for broadcast.
So it’s worth examining their wish list.
Ending Local and National Broadcast Caps: Back in the early days of TV, when broadcast was the only game in town, the FCC put regulations into place to limit the number of local stations any single entity could own in any one market and to limit the number of local stations any single entity could own in aggregate, nationwide.
The latter is why networks—who the laws were aimed at—have both “O&Os” (owned and operated) stations and “affiliates”, independently owned stations who contract to carry the network’s programming.
The argument for undoing the restriction is essentially two-fold.
The first says that whatever fairness rights the law sought to enforce are moot in that citizens now have a large variety of ways to get the news other than television and that having an owner with a decidedly liberal or conservative POV own two or more local broadcast stations would not, in fact, have the same impact it would seventy years ago.
The same argument also posits that the ability to pool much local news gathering—the times of the city council meetings, the scores of high school and pro football games—would result in the sorts of cost savings that would allow them to compete with online and national news.
The second piece to this also uses the scale argument, which is to say that in order to compete with streaming providers for things like sports rights, local broadcast groups will need to have much greater reach than they currently do and so a law limiting them to markets comprising just 39% of the US population is outdated.
Our TVREV Take: Those are actually valid arguments, as a law promulgated during the era of the midcentury monoculture no longer makes sense in the Age of Feudal Media, where younger audiences get news from TikTok, not Channel 2.
That said, we feel it may already be too late for local broadcast and that government subsidies will be needed to keep it afloat in most smaller markets and even some larger ones.
Speed Up The Transition To ATSC 3.0: ATSC 3.0 or NextGen TV is a great technology in theory as it allows broadcast to act like streaming with better data, the ability to run addressable and to enable content protection, which the petitioners noted, is something streaming services can do, and of great importance to sports leagues.
Our TVREV Take: ATSC 3.0, aka “NextGen TV” is a broadcast standard that is not backwards compatible. Meaning you need a new ATSC 3.0-enabled TV (and many OEMs do not make them) along with a determination to use over the air signals rather than streaming or cable.
So not a very big market or a very upscale one, which is why it doesn’t get a whole lot of attention.
Do Away With The Sports Broadcasting Act Of 1961: This is the law that allows pro leagues to negotiate rights deals for all teams in the league rather than letting individual teams go at it on their own—it essentially shields the leagues from antitrust charges.
The argument for doing away with it is that individual teams would then be able to negotiate directly with local broadcasters which would give the streaming services—which all have national reach—much less power.
This is part of a broader argument for how the leagues approach rights deals.
There is essentially the “socialist” mode, where the leagues negotiate streaming and international rights for all the teams and the more popular teams subsidize the less popular ones. The argument there being that it prevents some teams from being financially dominant and always able to pay top dollar for star athletes, thus keeping the overall standard of play more competitive.
Then there is the “capitalist” mode, as seen in the European soccer leagues, where it is every team for itself, and if the Yankees can get better deals than the Cleveland Guardians, then so be it. The argument there being that the disparities do not seem to have impacted the popularity of soccer in Europe.
Our TVREV Take: American leagues have never had the sort of disparities that European leagues have had and so fans are not used to it. Concentrating talent in a few markets is risky at a time when younger fans are losing interest in Big Four sports in general—the perception of an uneven playing field will not help bring them back. Keep the law.
What You Need To Do About It
If you are the FCC, be aware that many of the laws around local broadcast are seriously outdated and no longer relevant in the Age of Feudal Media. Act accordingly and let local broadcast groups expand so that they can meet their digital challengers without one hand tied behind their back.
Otherwise all you will have done is allow a different monopoly to take over (the tech giants) one with limited interest in local news.
As for the argument that allowing streaming services to gobble up sports rights is going to kill off local news…tell them they can do better.
Yes, at some level, the lost revenue is going to impact their version of local news.
But there’s no guarantee that the additional revenue would be plowed back into news and in today’s media landscape, a half hour TV show is likely not the best vehicle for local news as it is.
If you really want to do something to help bolster the state of local news, you’d be far better served by restoring funding to public broadcasters for 24/7 radio stations.
If you are a sports fan troubled by how difficult it is to find the games you want to watch and how many new services you seemingly have to pay for, you have been heard.
That does not mean a solution is on its way, however. At least not any time soon. It will take another five years or so for this to all shake itself out, for leagues and teams to standardize where their games run so that it is not onerous for consumers.
If you are one of the leagues, this frustration should not be brushed off lightly. As younger fans lose the desire to sit through three-hour broadcasts and as new niche sports find a home on TV where they can attract more fans, then your entire business model is starting to come under threat.
Not in the near term, but in the long term, and anything you can do to guard against fans seeing you as uncaring and more than a little bit greedy is going to serve you well in the decades to come.
If you are the NAB or a local broadcaster, be realistic about ATSC 3.0 adoption—how many people are still using antennas? (Yes, I know the number is growing, but there’s a big ass difference between “growing” and “becoming a significant audience segment.)
Ditto be aware of relying too heavily on “more people watched on broadcast” numbers.
Sports audiences are aging, of course they’re watching on local broadcast.
But to survive long-term, you will need to find a way to lure in those younger audiences.
If you are Congress, you’ve got a lot on your plate right now. But realize that at some point you will be called on to help save local broadcast, if for no other reason than that broadcast technology works better in natural disaster type situations. You must decide just how much “saving” you want to do, especially given that many (most?) people no longer have a way to receive broadcast signals.
And that even if they do, they’d have no idea how to go about enabling it on their TV.
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Week in Review is an opinion column. It does not necessarily represent the opinions of StreamTV Insider.