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NFL TV Blackouts and Los Angeles and the NFL
Posted By Evan Weiner On October 13, 2013 @ 1:03 PM In Insider - Sports: Media and Money,main feature,Sports Media | No Comments
The ESPN Monday Night Football game of the week between the Indianapolis Colts and San Diego Chargers will be shown locally in the San Diego market even though the game was not sold out 72 hours prior to kickoff as per NFL rules. The Chargers franchise got a 24 hour reprieve to sell the unused ducats, about 8,500, and thanks to NFL league partner, Walt Disney’s ESPN, and two restaurants that Chargers owner Dean Spanos is a stockholder, the remaining tickets were sold.
The San Diego non-sell out should be examined because of three issues. Why is there still an antiquated rule on the books that requires a team to sell out a stadium 72 hours prior to kickoff and what does this mean for San Diego ownership which is looking to build a new stadium somewhere in San Diego? The third question is why isn’t Los Angeles in the running for an NFL team like San Diego or Oakland or St. Louis?
The NFL blackout policy is indeed a relic of a different era. Los Angeles Rams fans from 1949 and 1950 are to blame for the rule although NFL owners had problems with TV going back to 1946. The NFL owners in 1946 passed a rule prohibiting the broadcast of other team’s games into the home territory when that team was playing at home. The rule, determined to be anti-competitive, was modified four years later due to pressure from the Justice Department to change it.
In 1949, the Rams franchise drew roughly 300,000 paying customers to games at the Coliseum. In 1950 the team’s TV network began to telecast Rams home games in the greater Los Angeles area and that year the team drew only about 145,000 fans. After the season then NFL Commissioner Bert Bell urged teams to blackout home games in an effort to keep the people in the stands for home games instead of in front of the television.
George Preston Marshall’s Washington Redskins franchise also televised all of the team’s games, six home games and six road games. The blackout rule took effect in 1951.
By 1953, the NFL was in the courtroom defending its blackout policy, an opinion supported by Judge Allan K. Grim, who upheld the league’s blackout policy believing that it was not in violation of anti-trust laws.
The blackout policies resurfaced in 1957, when the NFL Championship Game was blacked out in the host city of Detroit despite being a sellout. The blackout policy was challenged again in 1962 when the Giants hosted Green Bay in the NFL Championship at Yankee Stadium. Judge Edward Weinfeld of the U. S. District Court upheld the NFL position and denied an injunction, which would have forced CBS to televise the game in the New York City area. The blackout policy would remain in effect until 1973, when Congress passed experimental legislation requiring any NFL game that was declared a sellout 72 hours prior to kickoff be made available for local TV. The legislation was set to expire in 1976 but never did.
In 2012, New Jersey Senator Frank Lautenberg along with Richard Blumenthal of Connecticut, Sherrod Brown of Ohio, Tom Harkin of Iowa and Debbie Stabenow of Michigan wrote a letter to the Federal Communications Commission asking for the end of the National Football League’s blackout policy. The Senators referred to the 1973 NFL-Congressional agreement which allowed teams to continue blackouts if a stadium was not sold out 72 hours prior to kickoff “a relic of a different time” and added “it is time for [it] to end.”
The Senators also contended that “these blackouts are ruining the experience of rooting for the home team and are unjustly hurting fans.”
Again nothing has come of that push to end the blackout. The National Football League’s success is based on federal legislation, The Sports Broadcast Act of 1961 which was signed into law by President John F. Kennedy, which allows all American sports league to bundle the league’s franchises and sell it was one to a television network which under normal circumstances would be a violation of the Sherman Antitrust Act. The NFL and the then functioning American Football League were given enormous contracts from CBS and NBC and ended the owners’ need for gate driven revenue to financially survive.
The NFL has changed the blackout rules to suit individual teams and there are some tricks where local TV partners, a CBS or FOX affiliate will buy remaining tickets to reach a home market like San Diego.
The Walt Disney buy of tickets creates another interesting sidebar. Since about 85 percent of ESPN is funded by cable TV subscribers—many who never watch ESPN—should the network be spending subscribers’ fees on buying tickets to a game? Disney will be giving out the tickets to military personnel and local charities.
What does this say about the future of the Chargers in San Diego and why hasn’t the Spanos family moved the franchise to Los Angeles yet where a new stadium waits for an NFL owner?
It is a complicated yet simple answer. The Los Angeles offer is not good enough. An NFL owner in St. Louis, San Diego or Oakland gets the lion’s share of the revenues out of an old facility, In San Diego and Oakland, the teams play in 1960s era stadiums that have been renovated. While neither stadium has all the bells and whistles of the Meadowlands facility in New Jersey, Jerry Jones’s Arlington, Texas Cowboys stadium or Indianapolis, the Spanos family in San Diego, Mark Davis’s family and co-owners in Oakland and Stan Kroenke in St. Louis would not have to share revenues with Phil Anschutz, who is proposing a Los Angeles facility or Ed Roski in the City of Industry. The Anschutz/AEG Los Angeles proposal would have an owner give up high end revenue sources like club seats, luxury boxes and concessions to pay down the debt of the proposed stadium, the same holds true for the Roski proposal and the NFL wants no part of either offer.
That’s why the Spanos family has looked around San Diego for a municipal partner where under the right circumstances they could pull 92 cents out of every dollar out of the stadium leaving the municipality with eight cents to pay down the stadium debt. That’s why Mark Davis is talking to Oakland officials and took a look at the Concord Naval Weapons Station, a facility that has been decommissioned and requires a major cleanup on the 5,000 acres of land. There is also a chance Davis could hear from San Francisco elected officials once the 49ers leave town and head to Santa Clara. San Francisco politicians had pushed a piece of property at Hunter’s Point as a place for a new 49ers facility.
Kroenke has played it close to the vest in St. Louis. His Rams franchise can leave the team’s present facility in 2014 when the team’s lease expires.
There is no doubt Los Angeles would be a financial goldmine for an owner if there was a taxpayers’ funded stadium. There are fans—remember fans are the least important part of a sports franchises needs as government support, TV and corporate partnerships in buying big ticket items such as luxury boxes and club seats as well as becoming marketing partners–who contend that Davis’s Raiders would never be embraced in LA. The fans are wrong, owners want customers not fans and there are plenty of customers in Los Angeles. If Spanos’s Chargers, Davis’s Raiders or Kroenke’s Rams came to town, the corporate community would embrace them.
All three of those franchises have Los Angeles roots. Spanos’s Chargers began life with Barron Hilton picking LA for his American Football League team. Hilton moved to San Diego in 1961 after LA failed to support his first year Chargers in the first year American Football League in 1960.
Carroll Rosenbloom took his LA Rams to Anaheim in 1980. His widow Georgia Frontiere moved her Rams to St. Louis in 1994 when she got a sweetheart deal from local elected officials. What was gold in 1994 is tarnish in 2013 and the 19 year old stadium no longer shines for the Rams franchise.
Al Davis moved hos Oakland Raiders to Los Angeles in 1982. Davis was planning to stay in Oakland and was negotiating with Oakland officials when NFL Commissioner Pete Rozelle thought Oakland has being too generous in giving away the store to Davis in the late 1970s/early 1980s lease renegotiations. Rozelle was convinced that Davis was stuck in Oakland and could not move his team with the permission of his fellow owners. Davis ignored Rozelle and moved. The NFL sued Davis and lost. Davis has always been portrayed as the bad guy in NFL mythology but it was Rozelle and the league that got involved and stymied the Davis-Oakland lease negotiations.
In 1994, Davis was hoping to get out of the Los Angeles Coliseum and get his own LA football facility and was talking to Hollywood Park racetrack officials about building a stadium in the racetrack’s parking lot in Inglewood right off the freeway near the Forum that housed the Los Angeles Lakers and Los Angeles Kings.
Again there was NFL interference, this time from Commissioner Paul Tagliabue.
According to a Raiders official, Tagliabue promised to award five Super Bowls to be played over 10 years to Al Davis once the Hollywood Park facility was built.
“Finally, having gotten us back to Oakland, they celebrated by suing us. The NFL then began the great taffy pull,” said a Raiders source close to the team’s negotiations with the league and LA. “It then became three then two. Finally, the second Super Bowl was conditional, and we had to agree to take a second team, through expansion or relocation.
“The Commissioner initially agreed to contribute $20 million towards construction, then reneged, and then agreed to make a $20 million loan. Of course, they scotched the loan,” the source said. “This meant the Raiders would sell Personal Seat Licenses to cover that amount.”
Davis took a deal in Oakland which has not worked out as intended.
Ironically enough, Hollywood Park might be back in the NFL picture. The Hollywood Park racetrack will be closing in December and the land could be available in a sale. Hollywood Park has enough room for a football stadium, an owner could swoop in and buy the land which has been a sports center for more than seven decades and not have to have Anschutz or Roski as a partner looking to take revenue to pay down the debt of a downtown LA facility or a City of Industry venue. It’s a clean deal for an owner but the land is going to cost a lot of money. Stockbridge Capital, the property owners, bought Hollywood Park and the parking lot for $250 million seven years ago.
There is no word whether the property is even available for an NFL owner as originally the racetrack was to be replaced by housing and retail development. A Hollywood Park stadium could cost as much as $2 billion to build.
Los Angeles has a long history of NFL failure in building new venues. In 1999, a toxic waste site in Carson, California was eyed by the league for a 2002 expansion team. That failed. Al Davis kicked the tires in Irwindale in 1987 to see if the city of less than 2,000 people and loaded with rock quarries would be a suitable home for the Raiders in a new stadium. The stadium was never built but Davis came away with $10 million signing bonus.
The NFL continues to monitor developments in Los Angeles but none of the teams that can cleanly move, San Diego, Oakland or St. Louis has jumped at the Anschutz and Roski offers.
The Monday Night Football game between the Colts and Chargers will be seen in San Diego. The NFL is a business that sells entertainment but the business of the NFL is business from TV blackouts to getting the right stadium as the city of San Diego can illustrate to any fan.
Evan Weiner can be reached at firstname.lastname@example.org . His e-book, “The Business and Politics of Sports, Second Edition” is available (https://www.smashwords.com/books/view/365489 ) and his e-books, America’s Passion: How a Coal Miner’s Game Became the NFL in the 20th Century, (https://itunes.apple.com/us/book/americas-passion-how-coal/id595575002?mt=11 ), From Peach Baskets to Dance Halls and the Not-so-Stern NBA (https://itunes.apple.com/us/book/from-peach-baskets-to-dance/id636914196?mt=11 ) and the reissue of the 2005 book, The Business and Politics of Sports (http://www.barnesandnoble.com/w/business-and-politics-of-sports-evan-weiner/1101715508?ean=2940044505094 ) are available.
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