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Mr. KASTENMEIER. Our last witness this morning is Mr. Paul A. Porter, representing organized baseball and appearing at the request of the commissioner of baseball, Ford Frick.
STATEMENT OF PAUL A. PORTER, REPRESENTING BASEBALL
Mr. PORTER, Thank you, Mr. Chairman.
Might I say that with some diffidence and trepidation I appear before a committee chaired by a distinguished Representative of the State of Wisconsin, in behalf of baseball. But I am appearing here with respect to a different subject.
I have a statement here, Mr. Chairman, that I would like to be incorporated in the record as though read.
Mr. KASTENMEIER. Without objection, your statement will be received and made part of the record.
(Mr. Porter's prepared statement follows:)
STATEMENT OF PAUL A. PORTER, COUNSEL TO BASEBALL My name is Paul A. Porter of the law firm of Arnold, Fortas & Porter, Washington, D.C. I am counsel to baseball and appear here today at the request of the commissioner of baseball, Ford Frick.
Baseball's interest in H.R. 4347 relates to a narrow and specific question: whether live, play-by-play broadcasts of sport events will be protected from unconsented retransmission by community antenna television systems.
We understand that the Copyright Office's position is that there is some question whether the bill, as now drafted, extends copyright protection to live broadcasts of sports events, even though the Copyright Office acknowledges that all prerecorded, taped, or otherwise copyrighted broadcasts will receive protection against CATV retransmission. Further, we understand that the doubt and ambiguity is founded essentially on conceptual grounds : whether there can be copyright infringement under section 102 of the bill in circumstances where CATV retransmits a live sports broadcast since there is no copying of a work which has been reduced, in the terms of section 102, to a “tangible medium of expression."
To distinguish between live and prescripted or prerecorded broadcasts would mean that a tape of the San Francisco Giants playing the Tokyo Giants which is replayed on a sports spectacular cannot be picked up by CATV without infringement. However, in contrast, a live, play-by-play transmission of a contest between the San Francisco Giants and the Los Angeles Dodgers is fair game for CATV.
For the reasons set forth below, we believe that any such artificial and economally meaningless distinction should be rejected and that this- subcommittee should explicitly extend the scope of copyright protection to corer CATV's retransmission of live sports broadcasts.
One of the commendable elements which runs generally throughout the draft of the copyright bill is the constant effort to deal with the commercial realities of the modern world of ideas and communications. It was the recog. nition of CATV's impact upon the producers of television shows, television broadcasters, and local stations which led the Copyright Office to propose that CATV transmission constitutes a copyright infringement. We endorse those findings and this proposal inasmuch as they are particularly applicable to organized baseball. This commitee is well aware that only through the invest. ment of great sums of money, time, and effort-extending over the course of decades—has baseball attained the status of the national pastime. In such circumstances, it is grossly unequitable to give CATV a free ride and to permit CATV to broadcast, without consent or compensation, any game which they please.
Thus, solely upon conceptual grounds, the entire area of live sports broadcasts—which involves millions of dollars of revenue annually-might have been
left unprotected by the bill from expropriation by CATV. Significantly, to date, there has been no justification whatever presented to this subcommittee which would supportmas a matter of policy-the failure to extend protection to live sports broadcasts.
This omission can cause serious and substantial problems for baseball. As this subcommittee is well aware, revenues from the sale of television rights are a major source of income for the teams in the American and National League. Of course, it is the ability to control live sports broadcasts which makes this such a valuable asset. This year's total TV revenues from all sources will exceed $15 million. On a league basis, ABC-TV is paying $5.4 million to 18 major league clubs to broadcast “The Game of the Week." CBS-TV is paying the Yankees $550,000 for its weekend national network broadcasts. Further, individual major league clubs have contracts to broadcast home games within their local area for substantial amounts, in some cases exceeding $1 million per season.
These figures demonstrate the value that sponsors attach to the rights to broadcast live sports contests. However, baseball will be able to realize these revenues only as long as the member teams or the league possess exclusive control over such broadcasts. Congress has recognized this fact of life in 1961 in the sports broadcast bill when it specifically exempted from the antitrust laws a league package TV contract which provided that the concerned net. work would not broadcast "The Game of the Week" into "the home territory of a member club of the league on a day when such club is playing a game at home."
This valuable right to control the broadcasting of sports performances may well be destroyed unless the copyright bill is expanded to protect live sports performances from expropriation by CATV. CATV will be able to wreak havoc in a home team's market. For example, many teams Washington is one-have decided against televising their home games so as to protect gate attendance. Assuming Washington is playing the Yankees here at the District of Columbia Stadium and that the game is being broadcast back to New York City, under the bill as now drafted, it is possible that CATV could—without any financial obligation-bring into Washington that very game, as well as any number of competing games, which all could substantially cut into the Senators' box office attendance.
Further, CATV will threaten the potential TV revenues in circumstances where a team decides to broadcast all its games. As an example, Atlantic Refining has contracted to pay the Philadelphia Phillies a very substantial sum-running into the millions—for the exclusive right to broadcast in the Philadelphia market. However, if CATV is permitted to bring into Philadelphia all Yankee and Mets games from New York City without regulation or control, necessarily the amount Atlantic Refining will be willing to pay in this diluted market for sponsorship of the Phillies will plummet. Further, neither the Mets nor the Yankees would be compensated for the unconsented use of their broadcasts.
These examples could be repeated in all the cities presently housing major league baseball teams for, as the subcommittee is well aware, CATV applications presently are blanketing all the major metropolitan markets.
Moreover, CATV poses a threat to the continued vitality of minor league clubs. These minor league clubs are, of course, the proving grounds for most major league players. However, unregulated expropriation of live major league games by CATV could decimate minor league gate attendance, and organized baseball would be powerless to respond in any fashion. Baseball must have the right to control in a proper fashion the broadcasts of its games in order to protect such minor league teams.
In sum, one of baseball's most valuable economic assets its revenue from the sale of TV rights can be substantially destroyed by unregulated expropriation by CATV. This very situation has prompted the Register of Copyrights to recommend broad CATV protection in H.R. 4347 which will extend to all taped or prerecorded programs. However, the Register's proposed bill apparently stops short of protecting live sport broadcasts.
This artificial concept of the Register could force equally artificial responses on the part of baseball, its individual teams, and the networks to protect their product. For example, conceivably, every live sports event could be placed on tape and rebroadcast few seconds later. The program would then unquestion
ably be protected against CATV expropriation. But, this procedure is extremely complicated and expensive.
Further, the language of the ball, as now proposed, produces this curious result: should CATV pick up “The Game of the Week,” those portions of the game which are broadcast live would fall without any copyright protection. However, under the interpretation suggested by the Copyright Office, if there would be a video tape replay immediately following any given play, CATV could not pick up that portion without infringement because the play has been reduced to a tangible medium of expression, which was rebroadcast by the station. We assert that this illogical, fragmented result does not comport with the regulatory purposes of this bill which attempt to protect broadly and generally, for good and sufficient reasons, against unconsented retransmission by CATV.
In order to remedy this serious defect in the bill now before the subcommittee, baseball supports the amendments proposed by Commissioner Rozelle here today. By redefining “motion pictures" in section 101, to provide that: “The term ‘motion pictures includes live telecasts of sports events which are recorded simultaneously with their original transmission," this critical defect in the bill can be cured. We urge adoption of these amendments.
Mr. PORTER. I will simply say that at a meeting at Dearborn, Mich., in June this entire problem was presented to the joint meeting of the American and National Leagues. I was instructed by the commissioner, whom my office represents, to appear before this committee and to endorse the position that has been taken by the commissioner of the National and American Football Leagues, that is, that the protection that has been described here and which is further set forth in my statement be included in this legislation, in order to protect the institutions of organized sports from the effects of unrestricted distribution of their exhibitions.
I have only one thing to add, which I think makes baseball perhaps a little different from those other team sports appearing here and is an added reason for this protection. That relates to the minor league structure. The commissioner's office informs me they receive numerous complaints from the minor league operations that on the day and date that their exhibitions are being played, there is the infiltration of major league exhibitions through CATV, and sometimes through the normal telecast transmitters. This has been a long and vexatious problem with baseball-how to protect the minor league structure from major league competition.
The Congress has considered that matter over the years. The Department of Justice has caused us problems with respect to restrictive rules within baseball in order to achieve the objective of maintaining the identity of the minor league structure and the minor league teams.
Through the indiscriminate broadcast and telecast of major league games, when the Grim decision came down, or prior to that time, baseball had what was known as old rule 1 (d). That was in the days of radio, and subsequently television, which provided in essence that there could be no broadcasting on the day and date of a minor league game without the consent or the permission of the franchise holder in the minor league community.
This protection against oversaturation of baseball did preserve to some extent the minor league structure. When the Toolson case came down from the Supreme Court, I believe in 1955, upholding baseball's immunity from certain aspects of the antitrust laws, baseball undertook to reenact what was known as old rule 1(d) to permit major leagues to extend this protection into minor league territories.
The Department of Justice was unwilling to go along. They did not construe Toolson as giving us this kind of exemption. Thus, the executives of the Minor League Association, which is in the minor leagues, attributed a great deal of the distress in the minor league structure to this saturation. So, too, with CATV. The complaints are increasing, I am informed, that the sale of minor league rights, on radio particularly, are being impeded in value, if not eliminated, through the excess use of CATV. So, in short, we endorse the principle that has been stated by the two preceding witnesses.
We say, too, that broadcast revenues are an important source of income to both major and minor leagues. We believe that unless there is some protection of the sort that is requested there will be a serious threat to the continuance of these important revenues. In short, Mr. Chairman, we urge that the bill include the amendments suggested by Mr. Rozelle by redefining motion pictures to include these sports exhibitions. That concludes my statement.
Mr. KASTENMEIER. Thank you, Mr. Porter. I appreciate your reference to the situation in Milwaukee. In organized baseball.
Mr. PORTER. I probably anticipated it, Mr. Chairman.
Mr. KASTENMEIER. I think there really is some relevancy. There is a question of piracy, which we have heard before, the question of television. Here is the regular television contract which involves the future of baseball in Milwaukee, but I don't intend to go into that.
Mr. PORTER. That is a National League matter. I represent the commissioner's office, Mr. Chairman.
Mr. KASTENMEIER. There is a difference, is there not, really between professional football and professional baseball ? You have alluded to one or two differences; namely, that you have minor leagues and you have had attrition in terms of the minor leagues, not necessarily now due to CATV, but in the past due to television of major Jeague games.
This is a difference that professional football does not have. Furthermore, not all your contests are televised, and I think all professional football contests are now televised, and you have a longer history, so in some respects the history of it is for you different, .
Mr. PORTER. I would certainly agree to that; yes, sir.
Mr. KASTENMEIER. I note that you use the same language for the amendment as Commissioner Rozelle; namely, that you feel that motion pictures in section 101 should be defined by including live telecasts of sports events which are recorded simultaneously with their original transmissions. In this connection is the standard procedure technically simultaneously to record sports events—live telecasts—as they take place?
Mr. PORTER. My information, Mr. Chairman, is that on all of the exhibitions that are telecast-now, many of them are not within the championship schedule of the two major leagues--but as to those that are telecast, there are permanent tape recordings of such exhibitions. I would hope that with experience under this statute we might work out some waiver mechanism that would comply with its terms, whereby you would not have to burden the Copyright Office. They would have to get additional storage space, I would assume, if there was going to be filed with that office the tapes of every baseball exhibition that is telecast.