A few weeks back, the Obama administration declared that it “strongly supports House passage of H.R. 4626. The repeal of the antitrust exemption in the McCarran-Ferguson Act as it applies to the health insurance industry …” The House overwhelmingly passed the bill 406-19.
If only those votes came from a principle against crony-capitalism, in which the ability to navigate Washington DC’s halls of power is more important than delivering good customer service. If that were the case then these same pols would repeal the asinine Sports Broadcasting Act of 1961.
That law, according to an excellent commentary by Manhattan Institute’s Steven Malanga,
allowed the owners in each of the major pro sports leagues to band together and negotiate broadcasting rights as one body. In granting these rights Congress determined that “the public interest in viewing professional sports warrants an accommodation with minimal sacrifice of antitrust principles.”
Protecting the NFL through “minimal sacrifice of antitrust principles” provides owners with cushy “TV licensing deals, worth about $3.7 billion a year.” It also allows a “special arrangement in which the networks will pay the league even if a strike cancels games.” Imagine having to pay for that burger and fries even if the pimply-faced kid behind the counter walked out in a huff, or even “a minute and a huff,” and all you get are clothes that smell of frying grease.
Furthermore, as Malanga writes, “when Congress determines it is pursuing “the public interest” you should grab your wallet and hold tight.”
The federal government stands behind the battling behemoths of the major league sports, Cable and Network television providers while the public is stuck in the middle with nowhere to go. Government’s involvement in the sports entertainment markets, results in, Malanga notes, a
public policy to a certain extent that leaves the TV viewer stuck where he is because over time government has granted the major players in these battles certain rights and exemptions to laws that have given them leverage over the rest of us.
One can find a market that responds to what viewers want, rather than what the networks and cable outlets want, in one of the last places free market advocates would think of looking.
The situation is vastly different in Europe where there is no Sports Broadcasting Act to create anti-trust exemptions. As a result, the most watched sports events, especially weekly professional soccer matches, have migrated to pay-per-view and to premium networks in an ala carte menu where customers buy what they want to watch. Here in the U.S., the very mention of pay-per-view for sports evokes a phony populism in everyone from Congressmen to sports columnists, who abhor the notion that the entire country shouldn’t have access to a certain sports event.
When Europe is the model for a real market economy in sports entertainment, we know there is something very wrong in Washington DC, Hollywood and New York.