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Judge Grim, sitting in the Eastern District Court of Pennsylvania, held that restrictions preventing telecasting of outside games into home territories of other teams on days when they were playing at home was not illegal under the Sherman Act. He stated :
"The purpose of the Sherman Act certainly will not be served by prohibiting the defendant clubs, particularly the weaker clubs, from protecting their home gate receipts from the disastrous financial effects of invading telecasts of outside games. The member clubs of the National Football League, like those of any professional athletic league, can exist only as long as the league exists. The league is truly a unique business enterprise, which is entitled to protect its very existence by agreeing to reasonable restrictions on its member clubs." (U.S. v. National Football League, 116 F. Supp. 319.)
Thus, as can be seen, by the Grim decision professional football was given the right to "black out" within a reasonable area surrounding the city in which a professional football team was playing at home.
In 1961, the Congress affirmed that professional team sports should have this *black out" protection when they passed Public Law 87-331 (15 U.S.C. 1291). This law provides that professional team sports may sell the television rights of the league's member clubs in one package without being held in violation of the antitrust laws. To protect home teams, the same act provided in section 1292:
“Section 1291 of this title shall not apply to any joint agreement described in such section which prohibits any person to whom such rights are sold or transferred from televising any games within any area, except within the home territory of a member club of the league on a day when such club is playing a game at home.” (Emphasis added.]
I have cited instances in which a Federal district court and the Congress of the United States have held that it would not violate the antitrust laws for a team to "black out" their home territory when the team is playing at home. Now, with that background in mind, I should like to discuss what this has to do with H.R. 4347 introduced by Congressman Celler for a general revision of the copyright law and why copyright protection is needed for live telecasts of professional sports contests.
This protection which has been afforded professional sports leagues by the courts and the Congress is now in jeopardy because of the growth and expansion of community antenna systems. I would like to give you an example of what can happen. We currently have a franchise in the city of Buffalo, N.Y. I have copies of advertisements which were carried in the Buffalo Courier-Express on August 1 and August 18, 1965, by the Courier Cable Co. of Buffalo which is in the process of promoting subscriptions for a community antenna system in Buffalo. I would like to quote from their advertisements :
"Although most people in the WNY area are able to receive only the signals from channels 2, 4, and 7 clearly, signals from Rochester, Hamilton, Toronto, and Erie are usually poorly received. Through the use of CATV-Courier Cable Co. you woll receive all 12 area stations with exceptional clarity, enormously increasing the entertainment value of your television set ***. Enjoy every major sporting event in the comfort of your living room. Whether it's hockey, football, baseball, horseracing, and basketball, let the Courier Cable Co. pick up that crisp clear picture you've always wanted and deliver it to your home, in black and white or color * * * the reception is exceptional.”
The advertisement of August 18 is even more direct in its approach. It states:
“Hockey from Canada, at home pro football, Buffalo * * * no more driving to Erie to watch blacked out Bills games played at home. Basketball, baseball, horseracing. You name it."
It then goes on to point out that the cheapest ticket for Buffalo professional football games it $3 for an end zone seat, whereas with the Courier Cable Co. service you can get a seat on the 50-yard line for only 16 cents a day which is their daily service charge.
This activity is directly contrary to the protections which have been afforded professional football leagues by court decisions and by Congress and it is the reason we are here today requesting legislation to provide for the copyrighting of live sports telecasts.
I would like to make it clear that we are not qualified to comment on such community antenna television stations relaying their signals to householders
in rural areas or areas where the reception may be inadequate. We are fearful only of those community antenna facilities which are located within range of cities of large size. In my opening paragraphs, I pointed out the cities in which the American Football League has franchises. I should now like to point out those cities which have American Football League franchises where CATV is in existence or at least in the planning stage: New York City, Houston, San Diego, Oakland, Denver, Boston, and Buffalo. As can be seen, seven of our eight teams have community antenna facilities within at least 50 miles.
I am not certain about Kansas City, but I have been told that a CATV proposal pending near Kansas City specifies it has a special channel for "blacked-out” sports telecasts. These stations, like what Buffalo is planning on doing, can pick up a signal from elsewhere and send it right into the homes in cities where the courts and Congress have said we could impose the "black out." Such stations operating in or near our franchised cities can cut into attendance, thus the individual teams and the leagues will suffer.
A second factor involved here is the attitude of the networks with whom we have signed contracts that they shall have the exclusive right to televise our games. With such community antenna facilities taking the game off the air for their own use, the networks can logically object. Since a good portion of the fabric of professional sports is woven around television income, it must logically follow that any diminution of television revenues would automatically result in extensive pay cuts of the participating players, coaches, and administrative personnel. After all, if rights to televise games are no longer of value because of community antenna television systems, it logically follows that the income will suffer to such an extent there would be no alternative except drastic pay cuts. This would be multiplied many times when one takes into consideration the permanent personnel such as ushers, ticket takers and concessionaire personnel.
We have searched for a method of protecting the integrity of our blacked out areas and have concluded that the best way to achieve this protection is through the copyright of such live telecasts. We feel that these protections are of small value unless we can find some effective method of enforcement against those who would violate those rights which have been given to us. Some who have anpeared before this subcommittee have contended that if copyright laws apply to televised works the royalty charged by the original transmitter might become exorbitant. We are not interested in royalties, but would like to have it made clear that such antenna facilities cannot be used to carry back into a "blacked-out" city any live professional sports telecast. We feel that one way to provide for this is through the copyright laws. We, therefore, would like to respectfully suggest that this subcommittee give serious consideration to providing in this legislation copyright protection. We feel that such action would serve to make the Grim decision and Public Law 87-331 more meaningful.
Again, I would like to thank the chairman and the members of this subcommittee for granting us this time to present our case. Thank you very much.
Mr. Foss. Mr. Chairman and members of the subcommittee, my name is Joe Foss and I am the commissioner of the American Football League. Our offices are in New York City and we currently have professional football teams in Boston, Buffalo, Houston, New York, Denver, Kansas City, San Diego, and Oakland. We have just recently granted a franchise to Miami.
I have a couple of advertisements here. This one is from the Buffalo Courier-Express, dated Sunday, August 1, 1965, and I will just read a little bit from that advertisement:
Although most people in the WNY area are able to receive only the signals from channels 2, 4, and 7 clearly, signals from Rochester, Hamilton, Toronto, and Erie are usually poorly received. Through the use of CATV-Courier Cable Co. you will receive all 12 area stations with exceptional clarity, enormously increasing the entertainment value of your television set.
Then they list all the various channels.
Enjoy every major sporting event in the comfort of your living room. Whether it is hockey, football, baseball, horseracing, and basketball, let the Courier Cable Co. pick up that crisp, clear picture you've always wanted and deliver it to your home, in black and white or color. The reception is exceptional.
On Wednesday, August 18, we have the following advertisement. It says:
: What does it give me? What does it cost? It costs $4.95 per month and if you subscribe before January 1, 1966, you only pay $15 installation charge. By doing so this will reduce your installation charge of $15 any time up until January 1, 1966. This $5 deposit will, of course, be applied to the installation charge. What this boils down to in value to you as a cable subscriber is the tripling of the entertainment value of your television set for less than 16 cents per day. It is the best entertainment buy available anywhere in western New York. For instance: One pack of cigarettes per day 30 cents. Cheapest ticket for Buffalo professional football game $3 in the end zone. The Courier Cable CATV per day 16 cents on the 50-yard line, so we cannot compete with them very well there.
Here are a few of the hundreds of feature programs you can receive by subscribing to Courier Cable TV. Sports: Hockey, from Canada, at home, pro football, Buffalo—no more driving to Erie to watch blacked out Bills games played at home. Basketball, baseball, horseracing, you name it.
As I have indicated in my statement, just putting it in blunt English, it would shoot us down to have a program coming back on top of us. It has been tried in the past, to see just how well you do to have television come in while you have a contest going on at the stadium. It just means that a lot of the fans prefer to stay at home, especially if the weather is not too good. It is a lot easier to sit and visit quietly and without the effort of getting involved in the traffic or the parking situation around a number of stadiums or pushing and shoving getting into a stadium.
Then, of course, on top of that, as has been brought out, it dilutes your television package, which is a big thing now to professional sports. There is no argument about it, whether baseball, football, or hockey, or basketball, all of the team sports enjoy a good price for their television package and anything that would result in decreasing that, of course, would cause us considerable trouble for the simple reason that our budget is drawn on the high income that we receive from television.
I come from an area that is sparsely settled and understand CATV very well. When you are way out in the country someplace and can get a picture piped in it is really a blessing, something that you can thoroughly enjoy, and everyone in the community looks forward to. That is not the thing that we object to. The thing that we object to is going into these various major markets of ours.
It includes all of those wherein we have teams located with the exception of, I believe, Kansas City. I am not certain whether or not it affects Kansas City at this time, although I think there is an application pending right now, so that it would affect all of our cities and it is something that really concerns us. In suggesting that our live presentation be copyrighted, you might ask, how can that be accomplished? The fact of the matter is that, just as the game is going on, it is taped, so you actually have a picture that you can turn right around in the "instant camera"-and the various names that they give it-over the networks that run these all of the time. Of course there are a number of other ways that we film it.
We not only have the television, but it is also filmed for the various clubs in the league. So it is instantaneous as far as being able to turn around and make a presentation again on the screen. That is all I have.
Mr. POFF. Mr. Chairman.
Mr. POFF. It occurred to me that the witness might like to introduce his distinguished colleague and give him an opportunity to supplement what is being said. Your partner at the table is, of course, a former distinguished Member of this body from the great State of Pennsylvania.
It occurred to me, Mr. Chairman, he might like to say something before we riddle him with questions.
Mr. KASTEN MEIER. I appreciate my colleague, Mr. Poff, bringing that to my attention.
Mr. LOVRE. Thank you very kindly, Mr. Chairman.
Just one correction. First of all, thanks a million for the nice introduction, Dick, but I am from the great State of South Dakota, not Pennsylvania.
Mr. Poff. That is all right. I am sure that I paid a tribute to Pennsylvania and did no damage to South Dakota.
Mr. LOVRE. Mr. Chairman, let me say this. I know that time is of the essence, and certainly we do not want to burden you with a lot of verbiage, but we do feel that the two advertisements that Governor Foss alluded to certainly set forth the picture in full. And for the record I would suggest and I hope that both advertisements will be made a part of the record, rather than filing them as an exhibit, so that we will have them for future reference if and when necessary.
Mr. KASTENMEIER. Without objection, the exhibits will be received, and certainly the pertinent parts of the exhibits will be made part of the record.
(The exhibits referred to follow :)