Happily, Superbowl XLI is on CBS.

The one, and only time, that someone could say this phrase seriously.

Nantz and Simms. Super Bowl. With Manning and Grossman at quarterback. Oh, God.

Well, that just gives me an excuse to cancel Extra Innings. I was considering it anyway, but if DirecTV does get exclusive rights, I'm out.

For some reason, exclusivity seems to be the current fad in sports and technology these days, whether it's pay-per-view packages or video games. I have yet to see an example of an exclusive deal between a league and a company that was in the best interests of the customers. I doubt MLB-DirecTV would be any different.

DirecTV pays the NFL $700m per year, and it's going to pay MLB $100m per year. Am I getting these numbers right? I know that the football long surpassed baseball as America's favorite sport, but do these numbers suggest that the NFL is seven times more popular than MLB? Perhaps there's a better way to read those figures.

Just wanted to add that according to the NY Times (link is in my name), the DirecTV bid is not $100 million over 7 years, but $700 million over 7 years. So thats $100 million per year for 7 years.

It also says the InDemand bid was $70 million, more than triple the current deal, but doesn't say for what length of time.

MLB doesn't care about growing its fan base ... it just wants the $$$

Ah, that makes more sense.

Um, don't the numbers still indicate that football is 7 times more popular than baseball?

The MLB package is $100 million over 7 years.

The NFL package is $700 million over 7 years.

zlions:

As you will likely read elsewhere, the market research into the folks who buy these packages are the hard-core fans. Or in the case of football, hard-core gamblers. These folks are going to purchase these plans in whatever form is available.

Also, the nation as a whole is much wealthier than anyone cares to admit. There is a LOT of disposable income out there. Care to recall around Xmas how it seemed on TV that everyone was getting a Lexus SUV?

Especially for baseball which has a history of being a bad TV sport this is a fab deal. The dedicated fans are still going to buy unless they are willing to watch games via MLBtv. (which has its plusses but it's still a monitor as your viewing vehicle). MLB gets some serious cash that almost certainly wasn't going to come from cable providers.

More and more companies are going the route of focussing on their really devoted customer base who are willing to pay extra for access to whatever.

The casual users don't justify the additional costs associated with making something available on a larger scale.

The key is having something that X number of users really, REALLY want.

Me? I enjoy sports but I cannot justify the expense. Radio feed by NFL.com works just fine. And the MLB.com deal is OUTSTANDING. $15 for the entire season and ALL games. That's pretty sweet for a poor sap like myself.

#7 -

The MLB deal is $100m/yr for seven years. At least according to a couple of things I've read. For example:

http://baseballprospectus.com/article.php?articleid=5820

From that piece:

DirecTV is paying a whopping $100 million a year over seven years for these rights. Based on the information in the Sports Business Journal, that represents a five-fold increase over what inDemand was paying for the rights to EI.

Currently, the NFL negotiates the broadcast rights for all of its 32 teams. Specter’s bill would repeal that ability and set up a scenario in which teams would negotiate television deals separately. If it were to become law, wave bye-bye to one of the strongest methods for creating parity in the NFL: centralized television revenues.

I don't see why this necessarily follows. Without an antitrust exemption, the NFL can still require all teams to participate in the league-negotiated TV contracts.

As for the whole exclusivity thing, I don't understand why people think they have a civil right to buy the Sunday Ticket or Extra Innings. If you accept the argument that the NFL should be required to allow any provider to carry the Sunday Ticket, then can't you make the same argument that it should be available for free? After all, if it's anti-consumer to require people to get dirctv to get the ST, then it's anti-consumer to require people to pay for it. The NFL is a private enterprise and they can sell their product however they choose.

DirectTV is no more a monopoly than my company's contracts with clients to provide "all engineering services" needed by the client are to the exclusion of all of our competitors.

The NFL said we want to offer our games out of market in a package, what will you bid to broadcast this? Comcast has consistently lost out on the bidding, mostly because Comcast does not have the national market reach of DirectTV (somethign inherent in the nature of cable, which requires local franchises and wires running to every home), and therefore cannot afford to bid what DirectTV can bid, which simply beams satellite signals out of the sky blanketing the whole country.

There is also a great deal of logic in DirectTV becoming more and more an exclusive provider of these types of broadcast packages. Many people go to watch games in bars and clubs. It makes financial sense to bars qand clubs to subscribe to just one TV service to access all sports packages, rather than having to subscribe to multiple sattelite and cable services.

What the Cable companies cannot get over is that they are really technologically obsolete and on the way out due to the nature of satellite TV services, just like satellite using cell phones are inexoriably and inevitably replacing land-line phone use. Some lawsuits and congressional laws may delay the inevitable, but its inherently cheaper and easier to maintain a handful of satellites and satellite broadcast dishes than it is to maintain cable lines to 100+ million houses and businesses across the country.

This is the same reasoning behind the popularity of wifi and other wireless internet networks.

One thing on the DirecTV deal... it isn't available in Canada. I've heard from several people that they will get locked out of MLB out-of-market games in totality because of the new deal. Looks like the Blue Jays for them.

DirecTV has agreed to pay $700 million over seven years, according to three executives briefed on the details of the contract but not authorized to speak about them publicly.

http://www.nytimes.com/2007/01/20/sports/baseball/20base.html

I don’t see why this necessarily follows. Without an antitrust exemption, the NFL can still require all teams to participate in the league-negotiated TV contracts.

I don't think so. Without the antitrust exemption, the different teams I believe would have to be considered to be independent businesses. Therefore, the different teams negotiating as a block with potential customers (the TV stations, not the fans) would probably amount to collusion as defined in the Sherman act--a coordinated effort by entitities in competition to circumvent market forces. It's been a while since I've taken a law course, though, so maybe other people could confirm this?

Contact Senator Arlen Specter, who has been threatening the NFL's anti-trust exemption over their "Sunday Ticket" exclusive package.

(clink link for his website)

re: 14, that's my understanding too. By requiring the teams to act collectively, rather than compete for TV contracts, the NFL breaches anti-trust law, so requires an exemption from that law.

As for the whole exclusivity thing, I don’t understand why people think they have a civil right to buy the Sunday Ticket or Extra Innings. If you accept the argument that the NFL should be required to allow any provider to carry the Sunday Ticket, then can’t you make the same argument that it should be available for free?

It's not a question of civil rights. It's a question of contract law. According to my understanding, the NFL currently operates in a manner that suppresses natural market forces--e.g. they use the fact that they have a near monopoly (close to 100% market share) on football entertainment to control player salaries (through the draft and the salary cap), negotiate collective TV contracts, and offer barriers to entry to other startup leagues. They have been doing so since the AFL-NFL merger. In general, a business entity would not be allowed to do these things, under Sherman. However, the NFL successfully argued that these monopolistic practices allow them to deliver a better product to the consumer than would otherwise be possible (or they just had really good lobbyists), and so Congress passed a law that specifically gives them an examption to antitrust law. However, a condition of that exemption is that their product be made available to the public without bias. (I haven't actually read the law, but that is my understanding on it based on reading the news articles about Specter's initiative. If anyone has more information, it would be appreicated.)

My understanding is that the chief argument against the Sunday Ticket on DirectTV deal is that it does not offer the NFL's product to the public without bias--namely because people who physically cannot reciever a satellite signal cannot legally in any way gain access to out-of-market games.

I agree with Andrew in principal that if it were not for this specific law mandating the NFL's requirement to make their product available universally in exchange for the antitrust exemption, the NFL should be theoretically allowed to control its product's distribution the way any company can control its product's distribution. However, you do need to be careful drawing parallels to service or physical products. The NFL does not sell a physical product, like a widget or a razor blade (which can, in theory, be re-sold by the buyer without legal barriers), nor does it provide a contractual service, like an engineering firm that mandates an exclusivity service contract. The NFL produces a copyrighted entertainment product, and then sells a license to show that product--not the product itself. Therefore, it's governed by slightly different laws--more akin to a software developer than an engineering consultant or a widget-maker.

A bigger issue to my mind is the fact that cable and satellite providers themselves are not legally allowed (by the FCC) to broadcase out-of-market broadcasts. For example, if I live in Oakland CA but am from Boston, MA, and want to keep up with local news and such, I can subscribe to the Boston Globe (provided the Globe is willing to deliver to CA--I know some news papers will deliver out of area and some won't, but the point is that it is up to the newspaper--there are no legal barriers to doing so). But I cannot get Comcast or DirectTV to deliver me the local Boston channels (the Boston CBS affiliate, for example), either in addition to or instead of the Oakland channels, even for an extra charge, even if they wanted to provide that service, because they are not legally allowed to do so. I fail to understand how this is not a suppression of free speech or an abuse of government authority. What it is is a very valuable law to advertisers and big business, because it enables geographically based advertisement targeting and entertainment market control.

If these laws weren't there (and I think you can make a civil rights argument that they shouldn't be), then the DirectTV thing wouldn't be as much of an issue, for me or for the NFL. I'm not a gambler or a hardcore enough fan to want to watch every game (my fiancee wouldn't let me for one thing). But I am a lifelong Patriots fan now stuck in the middle of Riader country, with no interest in watching the local football teams play but a lot of interest in watching the Pats.

DirectTV is no more a monopoly than my company’s contracts with clients to provide “all engineering services� needed by the client are to the exclusion of all of our competitors.

You're right. But the NFL is a monopoly (and hey, there's courtroom proof, too!), and your firm is not. And exclusivity contracts with a monopoly are a market extension of the monopoly. Without that antitrust exemption, poof.

But even then, it's still awfully close to a tying restraint, considering you can't get Sunday Ticket without the rest of the DirecTV broadcast anymore. I'm surprised they did that, actually.

MJK:

e.g. they use the fact that they have a near monopoly (close to 100% market share) on football entertainment

Last I checked, High School Football, College Football, the CFL, AFL, Australian Rules Football and Rugby were all entertaining games played with oblong brown balls.

The NFL has a monopoly on NFL Football. As the existence in the past of the USFL, WFL, AFL, AAFL, and others shows, they have no monopoly on football itself.

Theoretically, there is no reason the Football Factory Universities couldn't get together and turn themselves into a the Football Factory League. They certainly have the money, personnel, and stadiums to pull it off.

I think that one unique factor in all of this (for both football and baseball) is the ability of DirecTV to broadcast games in high definition. In our area, Comcast is lagging way behind (as I suspect it is elsewhere), and I seriously doubt if they have the bandwidth to handle broadcasting 15 hi def games simultaneously.

I had Extra Innings on my high definition TV last year (on Comcast) and it looked terrible. MLB.TV would have been far superior (and cheaper).

I know I'm in the minority on this, but it makes a lot more sense push the high end users into an HD friendly format (DirecTV) and the midlevel users into MLB.TV.

My understanding is that the chief argument against the Sunday Ticket on DirectTV deal is that it does not offer the NFL’s product to the public without bias

Well, that's one of many reasons - like I mentioned above, it's basically a tying restraint. The only provider of DirecTV is DirecTV, period, and they're requiring you to get a certain service in order to get Sunday Ticket. Sunday Ticket has enough market power to convince people to do it, and the NFL benefits from higher total effective pricing (because DirecTV can pay more in subscriber fees). Only problem is, only the NFL could be sued for that. It wouldn't be that clear cut, though, because DirecTV's doing the tying, but you could probably argue it anyway, considering the economics.

Pat:

But the NFL is a monopoly (and hey, there’s courtroom proof, too!), and your firm is not.

You are confusing the analogy. My client is analgous to the NFL. My firm is analagous to DirectTV. The NFL offered up an exclusive business opportunity for bid. DirectTV won. My firm's client offered up an exclusive business opportunity for bid. My firm won. DirectTV has just as much or as little of a monopoly on broadcasting NFL football as any firm with an exclusive contract to provide a service to another firm does.

A Steel Mill can hire Harsco MultiServ (http://www.harsco.com/) to be the exclusive processor of their scrap steel, in essence forcing everyone who wants to sell scrap metal to the mill to do business with Harsco. There is absolutely no contractual difference between that sort of arrangement, and the NFL forcing everyone who wants to see out of market games to go through DirectTV.

But even then, it’s still awfully close to a tying restraint, considering you can’t get Sunday Ticket without the rest of the DirecTV broadcast anymore.

You can't get OnStar without buying a GM. You can't get a Victoria's Secret Pink Shopping Bag to use as a little tote bag without buying one of their lacy unmentionables. You can't get a Happy Meal Toy for your kids without buying a Happy Meal. A Beer Bottle Collector cannot get a new Budweiser Rolling Rock bottle without buying Budweiser produced Rolling Rock Beer. "Tying restraints" as you are trying to define them, are everywhere.

Unless Cable and Satellite TV goes to a per channel pay package, there are always going to be tying restraints of this sort. It's almost impossible to subscribe to pay TV services without being forced to buy channels you have no interest in. Sunday Ticket being a voluntary add-on is almost the exact opposite of the normal tying restraint practice of the industry. You CAN buy DirectTV without Sunday Ticket.

As the existence in the past of the USFL, WFL, AFL, AAFL, and others shows, they have no monopoly on football itself.

The USFL sued the NFL, claiming it was a monopoly. The USFL won. The courts specifically said that the NFL was an illegal monopoly.

Theoretically, there is no reason the Football Factory Universities couldn’t get together and turn themselves into a the Football Factory League. They certainly have the money, personnel, and stadiums to pull it off.

Monopolies don't mean that you can't have competitors (Microsoft's a monopoly, and it has competitors). It just means that in the marketplace, you have enough market power to do anticompetitive things that you couldn't do without said market power.

The NCAA bowl conferences have pathetic market power in the broadcast arena compared to the NFL - and remember, you can't merge all of them, as they themselves can't merge (1984 court ruling) to negotiate. Same antitrust problem. You know what the 10-year extension of the Big Ten to ABC/ESPN cost? $100M/year. That's the size of Sunday Ticket's broadcast.

It's also about 2% of the NFL's per-year TV contracts.

The NCAA conferences, individually, are chump change.

“Tying restraints� as you are trying to define them, are everywhere.

No, because you ignored the first statement I made: Sunday Ticket (i.e. the NFL) has enough market power to force it. None of the things you listed do.

Tying two things together is fine. Tying a monopoly with another product is illegal.

It’s almost impossible to subscribe to pay TV services without being forced to buy channels you have no interest in.

That's the cable company's doing, not the NFL's. For ESPN, for example, when the NFL signs an exclusivity agreement with them for MNF, that's no big deal. ESPN isn't tying anything with MNF - the cable companies are.

The dicey part of the argument, though, is saying that the NFL, in dealing with DirecTV, is implicitly tying Sunday Ticket with a TotalChoice package. I don't think it's that dicey, but I've read otherwise, too.

You are confusing the analogy. My client is analgous to the NFL. My firm is analagous to DirectTV. The NFL offered up an exclusive business opportunity for bid. DirectTV won. My firm’s client offered up an exclusive business opportunity for bid. My firm won.

Right, so if your client holds enough market-share to be considered a monopoly (as the NFL is), then it is illegal for them to offer an exclusive business opportunity for bid. The only reason it wasn't illegal for the NFL to offer such a deal is their Monopoly Exemption.

Tying MLB and Sunday Ticket together could be a great political strategy for DirectTV opponents. It would add plenty of disgruntled MLB fans to the cause, and the only added opposition would come from MLB team-owners and their friends.

DirectTV is totally screwed, unless some MLB team-owner (or former owner) gets the power to veto legislation.

But that's terribly unlikely, right?

Pat:

The courts specifically said that the NFL was an illegal monopoly.

The Federal Courts are full of idiots who do not understand the basic principals of the Constitution, Anglo-American Common Law, and the principles of natural rights and natural law, let alone the meaning of such plain words as "Interstate Commerce". I really doubt such maleducated people could tell if an enterprise is a monopoly or not, and if so, whether or not Congress has a real authority to regulate said monopolies.

Pat #24:

Monopolies don’t mean that you can’t have competitors (Microsoft’s a monopoly, and it has competitors).

If you have competitors, you are not a monopoly except by a massacre of the English language.

monopoly n. exclusive possession of the selling of some commodity or service; this conferred as privilege by the State (Concise Oxford English Dictionary)

Microsoft, quite obviously, is not a monopoly, since there are alternative manufacturers of all its products, and there is free entrance into business competition with Microsoft without legal distraint. You too can start a business in your garage to compete with them, just as others have done.

except by a massacre of the English language.

I believe that massacre is known as "the US Judicial System."

Legal definitions and dictionary definitions are two totally separate things.

I really doubt such maleducated people could tell if an enterprise is a monopoly or not, and if so, whether or not Congress has a real authority to regulate said monopolies.

Sure! I can tell you're not biased here.

Wanker79:

Right, so if your client holds enough market-share to be considered a monopoly (as the NFL is), then it is illegal for them to offer an exclusive business opportunity for bid.

Last I checked, Boeing is the only manufacturer of large comemrcial aircraft in this country, and they have exclusive supplier arrangements for various parts.

And, to actually be fair: the government typically uses the phrase monopoly to mean "possessing monopoly power". True dictionary monopolies possess monopoly power, but the reverse isn't necessarily true.

You can possess monopoly power over a market while still having competitors. It just means you've chosen not to eliminate said competitors.

In terms of the NFL, the NFL could completely kill off college football on TV in a completely free market. They have way, way more market power. The fact that they haven't killed college football doesn't mean they don't have the power to.

Pat:

Sure! I can tell you’re not biased here.

A-B-S-O-L-U-T-E-L-Y!!!!

Pat:

Legal definitions and dictionary definitions are two totally separate things.

Hence "The law is an ass" and "First thing we do, lets kill all the lawyers."

Last I checked, Boeing is the only manufacturer of large comemrcial aircraft in this country,

US manufacturers make parts for Airbus, as well.

Hence “The law is an ass� and “First thing we do, lets kill all the lawyers.�

Yup. This is going to be an intelligent, well-reasoned discussion. Have fun.

Re: If you have competitors, you are not a monopoly except by a massacre of the English language.

The Federal Courts seem to disagree. This is from a discussion about the Microsoft case by Orson Swindle, one of the Federal Trade Commissioners in 1999. (click my name for the full discussion)

Courts have defined monopoly power to be "the power to control prices or exclude competition." Because monopoly power is difficult to measure directly, courts have used market share as indirect evidence of the existence of monopoly power. Microsoft allegedly has an 80% or more share of the market for personal computer operating systems, and courts typically have concluded that a 70% or more market share creates an inference of monopoly power absent evidence that overcomes that inference.

Maybe it's true that NFL can destroy competitors that try to create a new football league in US (I have doubts), but they can't destroy college football. First, they need players, and they are developed in college programs. Second, college football emerged with the sport itself. Third, college footbal has millions fans all over america. I think if college football started a NFL-like league, the NFL would be in serious trouble. They don't fight because it's better for both the way they are.

Maybe it’s true that NFL can destroy competitors that try to create a new football league in US (I have doubts), but they can’t destroy college football.

You gave reasons why they won't destroy college football.

I said the NFL can eliminate college football broadcasts on TV. They have the market power to - at best, college football TV contracts are something like 10-15% of the total value of NFL TV contracts. These are two totally different things.

Think about it: if the NFL said to ABC/ESPN "We're not going to renew the NFL contract if you renew the Big Ten contract", you think ABC's going to stick with their $1B contract, or their $11B contract?

The fact that the NFL won't do this (because, um, they'd be sued) doesn't mean they can't.

A question: What NFL can do against some millionaires that decide to create another football league, with teams in L.A., Oklahoma, Las Vegas, Salt Lake, Detroit, etc?

#26: Actually, there are multiple levels here.

First level: the NFL signs an exclusivity agreement with ESPN, saying that only ESPN is licensed to produce a television show of the NFL games played on Monday nights. I doubt the NFL is requiring ESPN to "purchase" anything else with that agreement, though they could - requiring ESPN to televise the NFL draft, for example. I don't think they do.

Second level: ESPN does tie other things to MNF. (IANAL, so I'm using the layperson's definition of "tying", which may not coincide with the legal definition of "tying".) First, ESPN ties the rest of the programming on ESPN to MNF - a cable operator (like Comcast) can't elect to purchase only transmission rights to MNF and show something else on that channel the rest of the week (and year); they have to purchase and show ESPN 24/7/365 if they want to show MNF. Second, Disney Corp. ties other programming to ESPN - if a cable operator wants to purchase ESPN programming, they are generally required to also purchase and transmit all the other Disney Media Networks channels on the same tier - which is why if you want to get ESPN, you also generally get The Disney Channel, ABC Family, Toon Disney, and SOAPNet. So if a cable operator wants to show MNF to its "basic" tier, they have to dedicate 5 channels for this Disney programming.

Finally, at the third level, the cable operator in fact bundles all these channels together and charges you, the sucker-- er, consumer, $45/month for "expanded basic" cable, giving you a dozen channels that you really have no interest in seeing so that you can make fun of the ESPN MNF announcers.

But, generally, it's the content producer (studio) that's behind a subscriber being forced to purchase a bunch of channels you have no interest in. It's in their contract with the cable operator. This is the point that most advocates of a la carte cable miss - requiring operators to offer channels to subscribers on an a la carte basis will either run afoul of existing transmission contracts that the operators have with the studios, or will require studios to offer channels to operators on an a la carte basis. Which is why a la carte will never get anywhere.

#41: You mean like this one?

There are a number of articles out there on the MLB aspect as it pertains to Extra Innings, which could impact Sunday Ticket, if Arlen Specter has his way. I have captured it here today.

Any valid complaints about the swtich to DirecTV come only from those who currently pay for the programming on cable or on Dish Network. If you werent buying it last year, you are part of the reason MLB went with the DTV dough.

DGL, yes, that's what I mean. When I discovered USFL, I tried to read more about it, but what I found was the story of a new league that didn't know what it want to be. Some of the owners want to stay with the Spring schedule, some of them want to go to Fall. It seems to me that what USFL wanted was NFL to pay for the new league. Come on! They had television. They had attendance. They were growing under the NFL abscense between February and August. And they threw it away...

Re: 41

There's nothing they could do to physically prevent someone from forming another league, but we all know that the real money comes from television. And (like Pat mentioned in #40) if the NFL wanted to give an ultimatum to ESPN/ABC/CBS/Fox that they either exclusively broadcast the NFL or the NFL won't renew their contracts with them next time around, you can bet your life that the up-start league wouldn't be broadcast on any of those stations.

Re: 45

That may be true for Extra Innings, but the same can't be said for Sunday Ticket.

The history of antitrust prosecution actually aiding consumers is a dubious one, from the original mega-case, Standard Oil, to the marathon IBM prosecution, to this potential case. I think this instance is an example of how monopoly or monopoly power is too broadly defined by the law. If the NFL is operating a monopoly, or has monopoly power, then so is David Chase's production company when it enters into an exclusive agreement with HBO to distribute first-run Sopranos episodes. The fact that The Sopranos is a unique televison drama doesn't make Chase a monopolist by not selling distribution rights to other entities than HBO, and the fact that the NFL sells exclusive agreements to profesional football shouldn't make them a monopolist either. As much as we love NFL football, it really just is another way to entertain viewers for a few hours on weekends via electronic images. It is no more unique than Oprah Winfrey Shows or Tom Cruise movies.

NFL football is no more different from NBA basketball than James Bond movies are different from Shrek movies.

Wanker, there are NBC and the local channels; there are markets without fooball; there are six months of the year without a single NFL game broadcasted. It's not easy, but it's absolutelly possible...

To make mself more clear, unless one can argue that the NFL could force distributers to show nothing but NFL football, it is empirically false, as opposed to legally false, that they have monopoly power. Given t.v ratings become more diffuse with each year, it is plainly false that anyone has monopoly power over what electronic images are used to entertain people sitting on their couches.

Wanker79:

Courts have defined monopoly power to be “the power to control prices or exclude competition.� Because monopoly power is difficult to measure directly

Only a lawyer would fail to see the humor in this statement.

Let's see, because we've misdefined something to give us an illicit power over business we have no right holding, we have a very difficult task when we actually try to measure the commission of our misdefined crime. Isn't that what the very fittingly named Mr. Swindle is saying?

A sane society and just courts would say such laws are "void for vagueness on their face".

#41:

This.

The USFL claimed that the NFL had bullied ABC, CBS and NBC into not televising USFL games in the fall. It also claimed that the NFL had a specific plan to eliminate the USFL, the "Porter Presentation." In particular, the USFL claimed the NFL conspired to ruin the Invaders and Generals. The USFL sought damages of $567 million, which would have been tripled to $1.7 billion under antitrust law.

And the USFL won (partly).

Re: 45. MLB's decision has nothing to do with who is or isn't buying it. They're getting paid more money to switch, so they switched. Nothing wrong there.

If I understand the deal correctly, the only money MLB gets is the $100 million per year. So they don't really care how many subscribers there are.

Contrariwise, DirecTV must expect enough people to switch to recoup their cost, or they wouldn't be doing it.

As a consumer, I don't like the decision, but I don't really see any business doing anything illegal. Unless MLB offering Extra Innings to one service violates their monopoly protection. Which it very well might, I don't know enough about it.

Let’s see, because we’ve misdefined something

Monopoly power != monopoly. Monopoly power is an economic term, meaning a supplier that does not face an upward sloping supply curve.

To make mself more clear, unless one can argue that the NFL could force distributers to show nothing but NFL football, it is empirically false, as opposed to legally false, that they have monopoly power.

Why? Monopoly power would only require that the NFL could force distributors to show no other football, which I think they can clearly argue.

If the NFL is operating a monopoly, or has monopoly power, then so is David Chase’s production company when it enters into an exclusive agreement with HBO to distribute first-run Sopranos episodes.

That analogy only applies if you substitute "first-run Sopranos" with "all fictional crime drama". And since Chase doesn't have that ability, he's not a monopoly.

Without the monopoly exemption, each individual team would have the right to sell the exclusive rights to the broadcast of their team's games (just like Chase has the right to sell exclusive rights to The Sopranos). But since the NFL was given an exemption to anti-monopoly laws, the broadcast rights for every team were collectively given to the NFL.

Since part of the monopoly exemption agreement called for the broadcast of NFL games to be available to everyone. Since it is physically impossible for many people to get DirectTV, that can be seen as a violation of the terms of the monopoly exemption.

Pat, given the large numer of distributors these days (cable companies, two satellite companies, competing broadcast affiliates in most markets)I doubt the NFL could force all other football off the air.

Secondly, why is the NFL any more unique than "The Howard Stern Show"? Is Howard Stern a monopolist because he only allows the "The Howard Stern Show" show to be heard on Sirius? Call Arlen Specter!!!!

Pat, given the large numer of distributors these days (cable companies, two satellite companies, competing broadcast affiliates in most markets)I doubt the NFL could force all other football off the air.

I think you'd be surprised. Even if all they did was severely restrict access to TV markets, that's enough to cause a slow death in most cases.

Besides, the courts generally only look at market share and previous behavior to determine if someone has monopoly power. You can't ask them to infer what a corporation would be capable of, so you just look at something which is a decent analogue.

Secondly, why is the NFL any more unique than “The Howard Stern Show�?

OK, can we stop the little silly analogies? "The Howard Stern Show" is a statutory monopoly generated by copyright law (or trademark law). It's a legal monopoly because there's a law which specifically allows the show to be the only one called "The Howard Stern Show."

As much as people might think the legal system is retarded, I think they might have thought of that.

#58: I forgot the second part of that argument. Sirius has monopoly power on "The Howard Stern Show" market, but they do not have a monopoly on all talk radio shows, or even similar shows.

The NFL has monopoly power over the market for TV broadcasted football games. It happens to be a legally protected monopoly as well, because of a specific law that allows it. Specter's trying to revoke it.

Wanker, that argument depends on the view of the NFL franchises being economic competitors, which I think is inaccurate, given they cannot exist without working in concert. Coca Cola can exist if there are no other cola makers. The New York Jets cannot exist without other NFL teams.

There is no more substantive difference between NFL football and NASCAR racing than there is between "The Sopranos" and "24". They are all just moving elecrtonic images used to entertain people, just as a Bentley is not substantively different than an Acura.

Pat, when Congress stops writing silly laws, and Courts stop enforcing them in a silly manner, then I'll stop making silly analogies. I'm not disputing your legal analysis, I'm disputing the wisdom of enacting legislation which results in such enforcement.

Wanker, that argument depends on the view of the NFL franchises being economic competitors,

No, it doesn't. In fact, the reason they need antitrust protection is because if they bargain collectively without it, it's collusion. Between essentially all members of a market. We call those things "cartels". Used to call them "trusts". And it's still illegal.

And if you say "well, the NFL's just one big entity" - then, hey! it's a monopoly anyway!

I know that we've talked about this issue before, and I don't personally like this exclusivity practice by the NFL or MLB, but I don't see Congress doing anything about it. Even if Congress repeals the NFL's broadcasting exemption, then it still remains with the federal courts to decide whether these broadcasting contracts as individual entities are monopolistic in nature and illegal (as categorized as pro football, versus all football versus all sports programming versus any entertainment programming), right? Realistically, is all of this going to happen in our lifetimes?

Badger, I'd guess that disposable income is distributed somewhat unevenly (I'm not sure who the audience was for those Lexus commercials - I don't believe I know anyone who could afford to buy their spouse a Lexus as a surprise, and I know some people who own one), but for this discussion, it does make sense to assume that the people involved have the money to give to whatever providers have the Extra Innings package.

For the record, I'm not trying to suggest that any pay-per-view package must be available to everyone. I just think it's stupid to sign exclusive deals. Maybe that's just what Badger means, that leagues are more likely these days to try to get $1K from 1M fans than to get $100 from 10M fans, and that as a result, more fans "suffer." It doesn't mean I have to like it, though.

My reference to video games isn't entirely appropriate, either, because as has been discussed, it's not like there was a competing service. It's Extra Innings or nothing: it's just been available through multiple providers and may not be for long. With video games, there were multiple "services." After the competing games disappeared, there seems to have been a noticeable drop-off in innovation and quality, but that might not apply to this situation. The only improvement I'd like in Extra Innings itself is the ability to watch either feed for any given game: I'd rather watch the Tigers feed no matter what, but I get that option about half the time.

Andrew (11), it seems to me that it would be better financially for a bar if it could choose from a number of competing services, rather than having to choose DirecTV because it's now the only service that offers the MLB package (leaving aside the NFL issue - of course they'd have to have DirecTV to show all NFL games). If only one service meets your needs, then you're completely at the mercy of that service when it comes to pricing.

Also, cable is far from obsolete, much as it pains me to say that (I hate the local cable monopolies, the one in Indy and the one in the suburbs - they don't overlap). Ask someone who lives in an area that gets heavy rain (like me) or in a city with tall buildings.

Yeah, WiFi is popular, but until it matches the speed and reliability of wired connections, there's going to be a sizable portion of the market that's going to stick at least partly with wired. (My 360 is wired, my laptop is wireless.)

Pat, I think that the NFL might be a large cat to the NCAA's small cat, permitting the small cat to hang around but letting it know who runs the house, but that the large cat also knows that it has to tolerate the small cat. After all, there's a specific reason why we don't see Saturday-afternoon games until the end of the NCAA regular season. The NFL might have the market power to boot the NCAA off its networks, but it wouldn't take long for congressmen from Oklahoma, Nebraska, Texas, Florida, Michigan, Ohio and so on to revoke the NFL's antitrust exemption shortly after that happened.

#58: Actually, I was thinking the exact opposite - if I were an upstart professional football league, I don't know how I well I could do at getting my programming on the air, if the NFL tried to prevent it.

Let's say the NFL played the "if you show their football, you can't show mine" card (assuming for the moment that they could get away with it). What media companies does that lock out?

CBS, Fox, and NBC are out. ABC is out (it's part of Disney, as is ESPN). The CW is 50% owned by CBS, so they would appear to be out. So none of the broadcast networks are options. (I don't think the Upstart Football League would get much money from PBS.)

Cable channels? Well, looking at the 10 most widely distributed cable networks (per the NCTA), you have Discovery (football doesn't seem to fit their mainstream programming), ESPN (out), CNN (wrong programming), USA Network (owned by NBC - out), TNT (could work), Lifetime (wrong demographic - and out anyway, since it's 50% owned by Disney), Weather Channel (I don't think so), ESPN2 (out), Nickelodeon (wrong demographic), and Spike (could work).

Looking farther down the line, you've also got TBS, another Time Warner property.

So among existing media companies, you've basically got two choices - Time Warner (TNT/TBS) or Viacom (Spike). No over-the-air broadcast options; the NFL has those locked up.

So could the NFL force the Upstart Football League off the air? Probably not - TW or Viacom could show the games. But the UFL doesn't have all that many options.

Pat, when Congress stops writing silly laws, and Courts stop enforcing them in a silly manner, then I’ll stop making silly analogies.

Except none of your silly analogies have been anywhere near remotely correct. You haven't been criticizing silly laws, you've been just showing a poor understanding of those laws.

Really. Most of the examples that you've given are listed straight-up on Wikipedia in some of the articles on antitrust laws.

then it still remains with the federal courts to decide whether these broadcasting contracts as individual entities are monopolistic in nature and illegal

Nonono. If the antitrust exemption goes away, the NFL couldn't bargain collectively, and any overt agreements between NFL teams to set prices would be textbook collusion, and the broadcasters would have a field day with them.

Bargaining individually is perfectly legal. The illegal part is if the Patriots say "you'll only get us if you offer the Jaguars the same amount." That's collusion, especially if it would happen on a large scale.

Pat, I think that the NFL might be a large cat to the NCAA’s small cat, permitting the small cat to hang around but letting it know who runs the house, but that the large cat also knows that it has to tolerate the small cat.

Absolutely. But there's no such thing as granting antitrust exemptions for a "benevolent monopoly". Being a monopoly isn't illegal! Remember that! It's utilizing monopoly power that's illegal.

The NFL, as a corporate cartel, clearly has monopoly power. Two courts have found that. Whether or not it uses it legally or not is another thing.

Using it to negotiate broadcast contracts as a single entity is blatantly illegal, but they have a nice little exemption for that.

Yes, Pat, and the word "collusion" implies two or more competitors working in concert. If they truly are not competitors, there can be no collusion, just as when two different divisions of Proctor Gamble are seeking one individual to fill a product manager position, whether the two divisions are colluding depends on whether one views the two divisions as competitors.

Again, I'm not disputing your legal analysis, I'm disputing the wisdom of the legislation enacted that produced such jurisprudence. The history of anti-trust enforcement is not nearly as consumer-friendly as is commonly believed.

#66: You're not thinking vindictively enough. The NFL could then start saying "if you want to show my football games, you'll tell your cable distributors to drop Spike/TBS, or else you'll black out the football games. Oh, and if you do that, I'll charge you a factor of 10 less." Go with the little guys first, to make the practice well known and seem reasonable. Maybe send a message to Spike/TBS. Then you take the big guys out.

Cartels suck, huh?

Pat, my silly analogies are not meant to accurately reflect the state of the current law, they are meant to accurately reflect the silliness inherent in the laws. You, and the law, fervently believe that there is something unique about being entertained by electronic images of football players. I think that belief is silly.

If they truly are not competitors, there can be no collusion

Collusion happens between two firms who, in some sense, don't compete. They're rivals, but NFL teams are rivals too. The Redskins want you to give them your money, and not give it to the Jaguars.

The fact that the Redskins don't want the Jaguars out of business (or couldn't succeed without them) is immaterial to the discussion. Cartels also didn't want the other businesses out of business - it was easier to appear neutral that way. They're still rivals, and it still would be collusion.

The fact that the Redskins don't want the Jaguars out of business is why Congress gave them an antitrust exemption. Because they said "well, the NFL is really just a league for all football, we'll act in the best interest of all football fans." Specter's saying they violated that.

Really, there are no silly laws here. The NFL, by the book, has monopoly power. It has to be. If you think about what it is, of course it's going to. So Congress wrote up a law allowing it to avoid antitrust laws. That's the way it's supposed to work.

If you think it's silly that the NFL would be stripped of those protections, you think Specter's silly, not the antitrust laws.

Lambo Lou, that's hogwash! MLB clearly is not concerned with the number of Extra Inning subscribers that cable was pulling in compared to what DirecTV might get. Cable has five times the audience as DirecTV (according to the article). MLB in no way even considered the number of subscribers -- or the subscribers themselves, for that matter -- when jumping to DirecTV.

You, and the law, fervently believe that there is something unique about being entertained by electronic images of football players. I think that belief is silly.

Yes. That's because laws are general, and not specific. If there's a specific case that looks silly, then you write another law excluding that case.

Gee! That's exactly what's happened.

> "Nonono. If the antitrust exemption goes away, the NFL couldn’t bargain collectively, and any overt agreements between NFL teams to set prices would be textbook collusion, and the broadcasters would have a field day with them."

Okay, by "couldn't", you mean the NFL wouldn't try? Or otherwise that their attempt would easily be struck down? That's what I'm skeptical of, especially now that the public knows what it gets (and appears to want) from the NFL with its current TV revenue-sharing system. This "Sports Broadcasting Act of 1961"-- did that legislation settle an existing case that the NFL had lost or was losing, or was it merely a pre-emptive measure-- and do the same practical legal conditions exist today? I'm just trying to separate the intellectual legal debate here from the practical one, i.e. what we can reasonably expect to happen.

Pat, I stand corrected, I should have written that the word "collusion" implied the existence of two or more POTENTIAL competitors. Cartels merely prefer that their potential competitors not disappear. In this instance the potential competitors CANNOT exist without each other. They must work in concert, or cease to exist.

Now you, or the law, may say that is immaterial, but that merely was a preference exercised by those who created the law. Whether a law is silly or not is merely a matter of whether or not one thinks that it is an activity that the state should be either prohibiting, regulating, or compelling. I am very suspect about a great deal of antitrust enforcement, on the basis of economic results, or whether it is a morally legitimate use of state power. Thus, I find much of the legislation and jurisprudence to be silly.

By the way, I think Specter is silly as well.

I dunno', Pat, howza'bout not writing the laws to begin with, thus negating the need to create legal exceptions to said laws?

Look, I'm jousting with you somewhat. I'm not saying flat-out that all antitrust regulation should be struck down, but merely expressing skepticism regarding the common perception of the goodness or wisdom of antitrust regulation.

You, and the law, fervently believe that there is something unique about being entertained by electronic images of football players. I think that belief is silly.

You honestly can't see the difference between the NFL preventing (or at the very least severely hindering) all competing football broadcasts and Howard Stern being exclusively on Sirius?

If Howard Stern had enough market-share power to prevent (or at the very least severely hinder) all competing talk radio, then you'd have a valid point. But since I listen to Opie & Anthony every day, Stern obviously doesn't have that ability. And if he did, there's absolutely zero doubt that he'd be prosecuted under the anti-trust laws. Unless he was given an exemption because his monopoly is considered a benefit to society. Which brings us right back to the NFL's exemption.

Wanker, I just don't see any more substantive difference between the NFL and NASCAR (or Oprah Winfrey, for that matter) than between Howard Stern and Opie & Anthony. I may like Coca Cola better than 7-UP, but that doesn't mean I think there is a substantive difference between the two.

Didn't Microsoft lose an anti-trust suit because of the way it was bundling its software with Windows? Isn't DirectTV doing the same thing by bundling Sunday Ticket and now Extra Innings with its satellite TV service?

#66 - I think one option you are forgetting is if a cable company itself decided to take on the burden of airing the new league. Comcast has expressed interest in airing some NFL games on its own sports networks. If they decided to pick up the Upstart League, how could the NFL respond? They can't pull all their programming from Comcast unless they pull out from the networks and ESPN, and I can't imagine they could threaten the networks to get them to pull themselves from Comcast. The cable companies are one of the few groups with enough clout to make an end run around any NFL strong-arm tactics.As for the whole nature of this argument, I don't understand why sports leagues aren't reclassified as something other than a cartel or competitors. The mere fact that the primary product (a game), requires that two teams agree to work together should indicate that this product is different that a standard widget or service. The fact that exemptions have had to exist for baseball and football previously is a glaring sign that the law, as previously written, was not intended to be applied to such circumstances.And how come when referencing other leagues, no one ever brings up the XFL?

Gah! I apologize for my inability to add paragraph breaks...

Cartels merely prefer that their potential competitors not disappear. In this instance the potential competitors CANNOT exist without each other. They must work in concert, or cease to exist.

That's something that the companies in question would have to prove - that the consumer is better off letting them negotiate collectively, because the market conditions prefer collusion. (There are easy examples of stuff like this). Which again, is why there's antitrust exemptions in the first place.

I dunno’, Pat, howza’bout not writing the laws to begin with, thus negating the need to create legal exceptions to said laws?

Yeah, we tried laissez-faire capitalism. It doesn't work too well. In some sense, that's hard for modern consumers to understand, since we've had antitrust legislation for so long that we tend to forget the problems that really did exist.

In other words, you only see failures because the successes never happen, because companies aren't that retarded. Remember, laws are intended to be deterrents, not punishments. (woo, Intro to the US Legal System!)

Wanker, I just don’t see any more substantive difference between the NFL and NASCAR (or Oprah Winfrey, for that matter) than between Howard Stern and Opie & Anthony.

Why do you think there is any? What does it matter? Howard Stern and Opie & Anthony have protected monopolies over their own brand, thanks to the magic of trademarks and copyright. The NFL does not own the sport of football, nor does NASCAR own the sport of racing. If a second racing league attempted to start, and went after TV contracts, and there were rumblings in NASCAR about how to "conquer" this new league (what a freaking stupid idea that was) and get rid of them, NASCAR could likely be considered to have monopoly power as well. And then, gasp, it's pretty much like the Scarlet Letter.

You're not talking about Howard Stern, with a 90% market share over all radio programs (or even some market subset of radio programs), trying to eliminate a direct competitor by convincing all of the radio stations not to carry him.

The NFL's had two court cases where they were declared to have monopoly power. Why? Because they were stupid, and threw their weight around a little too much. When you've got a huge market share in any definable market, and you've got a competitor coming in, you have to be careful.

The fact that exemptions have had to exist for baseball and football previously is a glaring sign that the law, as previously written, was not intended to be applied to such circumstances.

The law was intended to apply in all circumstances other than to those companies with an exemption for reasons Congress deems worthy. And the reason those exemptions exist is because the FTC can actually put conditions on either the merger or the exemption to make sure that the exempted party doesn't overstep their bounds. It really is a perfectly reasonable law. Basically, it says, "don't restrict a free market. If you want to restrict a free market, ask Congress first so you can convince us why we should let you."

There are too many posts for me to bother reading them all and then offering an opinion.

Like I said, Pat, the benefits of antitrust regulation have been highly exaggerrated, from the very start of the mega-cases, like Standard Oil. Laissez faire gets criticized for a lot of things that mostly had to do with the country being much poorer 100 years ago. The country has become much, much, more wealthy since, and like people who think the rooster made the sun rise, a lot of people wrongly think antitrust played a huge role in making those gains in wealth, which is really what has alleviated the problems associated with laissez faire.

In fact, it was the urge to regulate, to supposedly alleviate problems associated with with laissez faire, which cerated the worst economuc disaster of the 20th century, the Great Depression. One could more accurately state that we tried regulation of the economy, and it didn't work out so well.

The point I made in regards to the NFL and NASCAR is that they are all just moving electronic images designed to entertain. Unless the NFL can control all those different types of moving electronic images that are sent through the ether or through cable, they can't be said to have monopoly power, in the real, as opposed to the legal sense of the word.

We don't say that Mercedes has monopoly power because they are the only company that can sell a car with a particular hood ornament, even though technically speaking it is a state-granted monopoly on said ornament, because it is a fairly meaningless one, in regards to the consumer's fundamental desire for a car, which is to get from point A to point B. A Honda serves the purpose every bit as well.

Billions of people get entertained by electronic moving images every day without reference to football, in fact, entertained every bit as well. Do some people say they much prefer football for their electronic moving images-based entertainment? Sure, and some people really prefer to have a certain hood ornament on their car. For some reason, the state grants a monopoly to a company for that hood ornament, and Senators don't threaten it with removal, yet if a collection of individuals try to maintain pricing power on a very,very particular form of electronic moving image, despite litrally hundreds, if not hundreds of thousands, of electronic moving images which are just as viable for the purpose at hand, entertainment, Senators say that such a monopoly is unacceptable.

If the NFL cannot sell it's electronic moving image to whomever it wishes, under whatever conditions it wishes, I see no reason for the state to grant Mercedes a monopoly on their hood ornament. Slap 'em on Hyundais, I say!!