NFL’s antitrust exemption vulnerable if league puts more games on streaming, FCC chair says

Federal pressure continues to mount against the NFL as the league places more games on paid streaming services.

On Thursday, FCC chairman Brendan Carr issued his strongest statement yet regarding the status of the NFL’s federal antitrust exemption. As it stands, the NFL and other professional sports leagues in the United States are granted antitrust exemptions that allow the leagues to centralize the sale of their broadcast rights, selling league-wide packages to national broadcast partners rather than having individual teams sell their own game inventory.

Out of the four major pro sports leagues in the U.S., the NFL is most dependent on this exemption as 100% of its game inventory is sold in national packages.

But as the league continues to fragment its inventory, awarding exclusive games and packages to streamers like Netflix and Prime Video, the federal government has began to evaluate whether the NFL is holding up its end of the bargain by keeping game broadcasts accessible for consumers.

“Does the NFL still benefit from the antitrust exemption when they’re negotiating for carriage of games not on a sponsored telecast, but on a streaming service?” Carr asked at an event in Washington, DC, on Thursday, per Rohan Goswami of Semafor. “That’s a very live, very ripe question.”

The NFL’s exemption is a product of the Sports Broadcasting Act of 1961. Of course, in 1961, free-to-air broadcast networks were the only form of television. Cable channels and streaming services were far off inventions. Federal regulators could conceivably interpret the law as only applying to broadcast networks, thus jeopardizing the NFL’s exemption if it sells games to streaming services.

There is “a point at which you sort of tip the scale, and they’ve just put too many games behind a paywall, and then that whole exemption collapses,” Carr said.

It is true that, at its core, antitrust exemptions are granted on the basis that the entity being given the exemption acts in the best interest of consumers. If federal regulators and lawmakers deem the NFL’s business practices to be sufficiently anti-consumer, they can credibly threaten the league’s exemption.

Carr’s FCC is already seeking public comment on the matter. Sen. Mike Lee (R-UT), who heads the Senate’s antitrust committee, is urging the DOJ and FTC to reexamine the exemption.

As the NFL enters renewed negotiations with its broadcast partners, the number of games it moves from over-the-air broadcast networks to streaming services will be of close interest to the federal government.