Kerry, Specter weigh in on EI move

The rumblings of discontent are getting louder, and are being made by more notable persons, but it may not make much of a difference after all …

NY Times article by Richard Sandomir on latest EI move news

(excerpts from Kerry)

“Here’s what bothers me,” Kerry said yesterday in a telephone
interview. “You get M.L.B. and DirecTV marshaling their forces to go
out and make money while cutting out fans. In my judgment, more fans
watching games strengthens baseball.”

He added, “There’s a whole movement toward fans being screwed by consolidation which raises prices and reduces options.”

Kerry isn’t sure the deal can be scotched, but last week he wrote to Kevin Martin, the chairman of the Federal Communications Commission, asking him to investigate it.

“The
F.C.C. doesn’t have the right to say, ‘You can’t do this,’ but they
have levers that affect this business,” said Kerry, who sits on the
Senate Commerce Committee, which oversees
communications.

=========

(and then this from Specter)

Last year, when he was still the chairman of the Senate
Judiciary Committee, Specter, a Pennsylvania Republican, fulminated
about the antitrust implications of some of the National Football
League’s TV practices, such as its exclusive deals since 1994 to sell
its Sunday Ticket package of out-of-market games to DirecTV.

Now,
Specter said by telephone: “Since I found out about the baseball deal,
I’ve asked my antitrust people to do research to confirm my preliminary
judgment that it’s an antitrust violation. But I don’t think I’ll be
able to stop it.”

Baseball has a longstanding, Supreme
Court-blessed exemption from antitrust laws, except for its labor
dealings, which were removed in 1998.

“You can’t charge baseball
with an antitrust violation,” Specter said, but Congress could continue
the exemption on the condition that baseball avoids exclusive deals
like the one it will soon announce with DirecTV.

Still, even that
exemption, which some say is not fully defined in its scope, may not
protect baseball from a serious antitrust challenge to the DirecTV
deal. Gabe Feldman, an associate professor at Tulane Law School, said,
“A few courts have said the exemption does not apply when baseball
makes agreements with third parties.”

Unlike baseball, the N.F.L.
lacks a broad, if ambiguous, exemption. But it has had a narrow one (as
other leagues do) to collectively sell its teams’ broadcast rights as
permitted by the Sports Broadcasting Act of 1961, an exemption that
Specter would like to get rid of. He joked that he was selling rights
to his regular squash games to DirecTV.

In 1997, a group of
DirecTV subscribers filed a class-action suit against the N.F.L. in
Federal District Court in Philadelphia saying that the Sunday Ticket
package violated antitrust laws partly because it was sold exclusively.
The plaintiffs settled for an undisclosed sum before a definitive
judgment. But the United States Court of Appeals for the Third Circuit
upheld the lower court’s ruling that the 1961 law applied to broadcast
deals, not those made with a satellite service.

Disgruntled
former cable (or Dish Network) subscribers of Extra Innings may take a
similar route to court. But their success is far from guaranteed.

In
its defense, baseball may argue that it has not restricted the output
of games by selling Extra Innings to DirecTV because the games will
also be on mlb.tv (and, besides, there is so much local and national
baseball on TV).

“Baseball might say there is a process under
way that is merging Internet streaming with TV, and anyone who wants
the package can go to mlb.com,” said Andrew Zimbalist, an economics
professor at Smith College.

But baseball may open itself to a
counterargument that because it controls mlb.com, it is offering an
option to its DirecTV deal — a type of eyebrow-arching vertical
integration — that is not purely competitive, with a price that it sets
on its own.

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… and all of this over MLB’s desire to have its "Baseball Channel" on a standard tier on cable systems  ….

(sigh)