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Wednesday, December 12, 2007

Football and Cable TV

What’s the deal with the NFL and government? Not only do most team owners look for taxpayer handouts for stadiums, but now the NFL wants government to give a boost to its NFL Network cable television channel.

As the Houston Chronicle reported on December 11, NFL Commissioner Roger Goodell and Dallas Cowboys owner Jerry Jones lobbied Texas state lawmakers on December 10 about the dispute between some cable operators and the NFL Network.

The newspaper reported that Goodell and Jones “urged the House Committee on Regulated Industries to force binding arbitration on Time Warner and Comcast if the two major cable companies won't negotiate to keep certain games on expanded basic cable.”

Hmmm. Is this really a matter for state lawmakers? Well, the article went on to note:

“A legislative solution is not an option, said Howard Symons, representing the Texas Cable Association. Because the issue affects consumers in every state, Symons told lawmakers, the NFL ought to take its case to the Federal Communications Commission. ‘There's some virtue in having a common set of rules, a common set of procedures across the board,’ he said. But a majority of the FCC currently does not support binding arbitration to settle the dispute, Symons said. And that's why the NFL has turned to state legislatures, he said.”

So, if one government does not regulate on your behalf, go to another government to see if they will do your bidding?

But Texas state lawmakers seem a bit bewildered about their role: “Regulated Industries Chairman Phil King, R-Weatherford, acknowledged uncertainty as to whether the state can intervene. ‘Assuming we do, and I'm not sure that we do, from a policy perspective should the state intervene in programming issues?’ he asked during a break.”

Good question. Indeed, why should any level of government be involved at all in the negotiations between cable operators and channel providers?

The piece continued a bit later: “The free market should dictate the outcome, argued Todd Baxter, vice president of the Texas Cable Association and a former GOP state representative from Austin. ‘Government intervention would be inappropriate,’ Baxter told lawmakers. ‘We can tell you that what the NFL wants is government intervention.’”

And then we have the NFL’s response, as reported by the Chronicle:

“But Goodell complained that the league isn't dealing in a free market system. ‘We are dealing in a system where cable operators are thinking not in the best interest of the consumer, so it's difficult to be able to do that,’ the NFL commissioner said. And Jones complained that ‘America's Team,’ as the Cowboys are known, has ‘millions of fans outside of the home market who are being kept in the dark by Big Cable… Cable claims no one wants the programming while flooding the airwaves defending their refusal to negotiate a solution. They know what we know: There is no such thing as too much football in American living rooms, and they are losing subscribers and profits because they are siding against fans.’”

But if cable operators are losing subscribers and profits because they are siding against fans, then this is a free market, isn’t it? After all, that’s exactly what one would expect if a company is not serving consumers well, that is, lost business and profits. Businesses have to meet the demands of consumers, or suffer the consequences.

So, the free market works. There’s no need for government to tackle cable operators on behalf of the NFL.

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