1 "NOT A TRADITIONAL BUSINESS"
Sports TV as For-Profit Public Good?
Communication historian Robert W. McChesney has traced the âsymbiotic relationshipâ1 between sports and mass media from the mid-1800s, when both daily newspapers and sports developed as local and regional cultural institutions. With the emergence of radio and the broadcast era in the 1920s, alongside corresponding improvements in transportation, social mobility, and increasingly national markets, âsport assumed its modern position as a cornerstone of US culture.â2 To a significant degree, modern sports and broadcasting are analogous institutions. Both rest âupon a foundation of individual stations,â or teams âthat give voice to local communities, promoting the values of citizenship and the unique character of local cultures.â3 Both are also integral to âpostâWorld War II ideologies of the ânationalâ that [each] coincided with and contributed to.â4 As the broadcast era (of radio, then television) began in the US, so too did the professionalization of sports. Just as television became a truly national medium integral to everyday life by the 1960s, the big four sports leagues expanded to be truly cross-country phenomena. Commercially sponsored TV of the broadcast network era took the form of an oligopoly, with NBC, CBS, and ABC in control of the market. Simultaneously, professional sports leagues took the form of cartels, with the MLB, NFL, NBA, and NHL absorbing or merging with competing leagues. Today, sports is the content upon which the continued relevance of broadcast television is staked. As Susan Crawfordâs history of US telecommunication policy states, âthe real value in American television entertainment lies in controlling rights to football, basketball, and baseball games.â5
In 2020, media rights for sports were valued at $21.7 billion. According to Price Waterhouse Coopers statistics, the North American sports market is projected to grow to a value of $83.1 billion in 2023.6 With new rights deals struck by NBC, CBS, FOX, ESPN, and DirecTV through 2022, the National Football League alone will soon earn almost $6 billion a year in television rights fees. Such costs and profits correlate to audience investment: in 2020, âaround 27 percent of respondents from the United States stated that they were watching live sport at least once a week on television.â7 But why should sports content be more valuable to television than any other genre? As noted in the Introduction, sports is âtelevision that matters in ways that no other entertainment can.â8 It involves âpassionsâ and âemotional entanglementsâ9 that are rooted in regional and local identifications and the sports audienceâs sense of self. As the owner of the NBAâs Atlanta Hawks, Tony Ressler recently stated, âitâs not a traditional business. Youâre buying a community asset.â10
As a beloved local institution, sports teams or franchises are imagined to be a public good, with their continued success considered to be in the best interest of the public they âserve.â Sports law scholars Arthur T. Johnson and James H. Frey observe that âsport has acquired the status of a public trust, which must be protected. As a result, public policy in the form of law or regulatory action has been implemented to guarantee the public equitable access.â11 From the inception of modern US sports and broadcasting to the present, âthe beliefâor perhaps the hopeâthat sport and the public interest are one lingersâ12 in large part because of sportsâ uniqueness. Sportsâ âdifferenceâ in terms of commerce, business practices, geography, and public access has been codified into law and upheld as such when periodically challenged. From the classic network era (1950sâ1980s) through the multichannel era (1980sâ2000s) and the connected viewing or streaming âpost-networkâ era (2010sâpresent),13 media law and policy and TV industry negotiations with sports leagues have defined sports as a public good and viewersâ access to sports as a necessity and a right. As historian and TV policy scholar Allison Perlman has argued, âThe public interest is not a singular, knowable thing. It is a device that reflects the interests of the person or community who invokes it.â14 What follows examines the intertwined historical, institutional, and commercial interests of professional sports and television in the US. Specifically, it examines key legal and policy documents that established the framework that continues to define sports TV as a public good, serving the public interest, with sports leagues and media rights holders affirmed as public âtrustees.â It offers an overview of the impact of sports rights on specific networks across television history and a similar overview of the transformative power of TV upon a sports leagueâs growth and prosperity. Finally, it considers the increasingly untenable tension between sportsâ appeals to local community service in relation to its leaguesâ and teamsâ conglomerate media interests.
In the Public Interest? Core Concepts in Sports Law and Media Policy
Prior to the broadcast era, the late 1800s in the US saw the growth of new media outlets and sports institutions alongside âgrowing concentrations of economic power in the hands of large corporations and big trusts such as oil, railroads, steel, meat packing, and tobacco.â15 Concerns over such concentrated, increasingly monopolistic power led to passage of the Sherman Antitrust Act of 1890 âto regulate unreasonable anticompetitive methods that may be used to obtain or maintain market power,â16 including unlawful restraint of trade and exertion of monopoly power within a defined geographic market. As professional sports leagues grew, they, too, became the focus of antitrust inquiries. And yet, the Sherman Antitrust Act has also provided the legal foundation to maintain the idea that sports is not a âtraditional businessâ and cannot be regulated as such. In 1922, writing for a unanimous Supreme Court, in Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, et al., Chief Justice Oliver Wendell Holmes ruled that professional baseball was not commerce. According to Holmesâs decision, even though its teams âplay against one another in public exhibitions for money,â17 baseball games do not produce a tangible good in exchange for the ticket. Player âeffort, not related to production, is not a subject of commerce,â18 and, therefore, team travel between states does not constitute interstate commerce. Notably, here, baseball playersâ labor was considered synonymous with performance, theater, and the arts rather than with commercial production and trade. Federal Baseball thus determined that the sport transcended conventional modes of labor, production, and market exchange. This difference established what legal scholar Mitchell Nathanson has referred to as the âcultural fiction of the baseball creed,â assuring that âAmericaâs gameâ was in a legally separate sphere, above the mundane.19 âTo hold otherwise would be to hold that Americaâs game was no different than a shirt factory, and this simply would not do.â20
Baseballâs special status was not legally extended to other sports leagues. However, from the Federal Baseball case to the present, core elements of this âcultural fictionâ and âdifferenceâ of sports have been integral to understandings of the relationship between sports and television in law and policy. Across court cases, Congressional hearings, public laws, and FCC reports and policy statements, professional sports have routinely been interpreted as a business that remains âaboveâ crass market pursuits. This premise is, largely, based on appeals to localism: the teams that make up professional leagues are not conceived as for-profit franchises but, rather, as civic institutions representing specific publics (e.g., Cardinals fans are different from Cubs fans in distinctive ways involving âSt. Louis-nessâ rather than âChicago-nessâ). This idealistic concept may seem hard to sustain in a highly mobile, contemporary era, but whenever the profit-motive of sports has appeared to supersede such civic myths is when, historically, legislators and regulators have intervened in sportsâ business practices. Simultaneously, leagues and their television partners have also routinely invoked their role as âpublic servantsâ in order to assure continued, preferential market access. Whenever legally challenged, leagues and networks rhetorically have aligned sports TV with the FCCâs expressed commitment to televisionâs service in âthe public interest, convenience and necessity.â
The Radio Act of 1927 correlated wireless transmission of radio signals to transportation of goods or services to the market while also defining âthe airwaves themselvesâ as âa public resource.â21 Thus, the Act proscribed that broadcasters must serve âin the public interest, convenience and necessityâ and that they would be required to obtain a license to operate, the allocation of which would be guided by this principle. The Communications Act of 1934 reinforced and extended these principles to telephone services and created the Federal Communications Commission (FCC) as broadcast and telecommunicationsâ oversight body. These extensions later allowed the Actâs provisions to be adopted for the cable industry. In 1946, the FCC reiterated the need for individual stations, or licensees, to be responsive to local interests. According to this report (known as the Blue Book, for the color of its binding), station license renewal would be premised on the licenseeâs use of local talent wherever possible, and on the stationâs responsiveness to the specific interest of the public it served.22 Though the public interest standard remained vaguely defined,
In the wake of the quiz show and âpayolaâ scandals in the late 1950s, the FCC actually did attempt to clarify the public interest standard as a means to offer programming guidelines to an industry that seemed to be losing its way.23
In âThe 1960 Programming Policy Statement,â the FCC introduced an âascertainmentâ requirement for successful licensing. Ascertainment required broadcasters to assess the specific âtastes, needs, and desiresâ of viewers or listeners in the licenseeâs broadcast range.24 Among fourteen elements considered necessary to meet the public interest were regular offering of sports programs.25 This priority would be directly referenced by league commissioners as the rationale for exclusive rights deals brokered with TV networks.
Prior to televisionâs expansion across the country, the rights to broadcast games typically belonged to individual teams. As both sportsâ and televisionâs markets and national, commercial viability grew, however, âprofessional sports leagues realized that pooling their teamsâ individual rights into packages to sell to national television networks would increase total league revenue and allow revenue sharing among their teams.â26 In 1953, the NFLâs rights-pooling policy was judged to violate the Sherman Act. The league was ruled to have...