The Sports Broadcasting Act of 1961: A Comparative Analysis of its Effects on Competitive Balance in the NFL and NCAA Division I FBS Football
20 Pages Posted: 25 Jun 2014
Date Written: June 24, 2014
One of the relatively few sports-specific statutes enacted by Congress or a state legislature is the Sports Broadcasting Act of 1961 ("SBA"), which exempts a professional sports league’s collective sale of its member teams’ television rights to free "over-the-air" national and regional broadcasters from antitrust challenges. Although the SBA provides a limited antitrust exemption for the collective sale of television rights by a professional sports league, it does not immunize the National Collegiate Athletic Association ("NCAA")’s collective sale of football television rights from antitrust scrutiny. By providing limited antitrust immunity, the SBA facilitated the centralized sale of television rights by professional sports leagues during a critical period in which network television rights fees were increasing significantly and resulting revenue disparities threatened league-wide competitive balance if teams individually sold these rights and retained the revenues. This federal statute enabled professional sports league teams to share national television broadcasting revenues pro rata, an important and longstanding form of revenue sharing designed to achieve and preserve competitive balance, which is essential to a professional sports league’s long term financial viability and survival as an attractive form of entertainment for consumers. Our empirical analysis shows a positive correlation between NFL teams’ pro rata sharing of collectively-sold television rights and competitive balance within the NFL, a result that Congress intended the SBA to achieve. On the other hand, our comparative analysis demonstrates a relative lack of competitive balance among Division I FBS teams, which under current law cannot be remedied by the collective sale of all Division I FBS universities’ football television rights and pro rata distribution of the revenues because the SBA provides no antitrust immunity for NCAA universities.
Keywords: sports law, professional sports, college football, broadcasting, television, antitrust, revenue sharing
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