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THURSDAY, MAY 31, 1973

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OFFICE OF THE COMMISSIONER,

AMERICAN FOOTBALL LEAGUE/NATIONAL FOOTBALL LEAGUE,
New York, N.Y., August 1, 1973.

Hon. JOHN L. MCCLELLAN,

Chairman, Subcommittee on Patents, Trademarks, and Copyrights,
U.S. Senate, Washington, D.C.

DEAR CHAIRMAN MCCLELLAN: In response to your announcement of further hearings on S. 1361, I am pleased to submit my statement on the treatment in that bill of the carriage of sports telecasts on cable television. Copies of my statement on behalf of professional football are enclosed herewith.

Let me express the hope that the way can now be cleared for legislative action on this pressing matter in view of the recent new spurt of cable growth and the inaction of the Federal Communications Commission on the matter. In my opinion it would be unfortunate if enactment of Section 111 (c) (4) (C) and other relevant provisions were delayed further while large numbers of American families became cable subscribers, and cable owners made substantial capital investments, on the expectation that cable systems would be able to continue pirating NFL game telecasts in derogation of the rights of our member teams. As in the past, I would be glad to make myself available for further discussion and to supply further information as the Subcommittee may require.

Respectfully,

[Enclosure.]

PETE ROZELLE, Commissioner.

STATEMENT OF PETE ROZELLE, COMMISSIONER, NATIONAL FOOTBALL LEAGUE, BEFORE THE SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS OF THE SENATE COMMITTEE ON THE JUDICIARY ON S. 1361

Professional football maintains a strong interest in those portions of S. 1361 which would affect, from the copyright point of view, the carriage of sports telecasts on cable television. My statement is on behalf of the 26 member clubs of the National Football League who represent many cities and metropolitan areas across the country.

Our interest dates back to the days when cable systems began moving NFL game telecasts around the country without seeking any permission (or offering any compensation), and my statement to this Subcommittee dated August 3, 1966, commenting on S. 1006, expresses that interest. On March 14, and October 31, 1968, I made further statements commenting on S. 597 and H.R. 2512, and we have expressed our views several times since then.

In December 1969, the Subcommittee unanimously reported out a bill, S. 543, which recognized the rights of those who spend considerable sums to stage professional sports contests for the entertainment of many millions of fans at the ball parks and at their television sets. The Subcommittee (1) expressly gave full statutory copyright protection to live game telecasts and (2) applied that protection to cases where cable systems would import game telecasts into areas where television stations had exclusive rights to receive other games instead or where teams were playing home games. Thus the Subcommittee put cable and broadcast television on an equal footing vis-a-vis the telecasting of NFL and other professional sports contests.

The Federal Communications Commission has not yet acted on its expressed intent to deal with this problem. After the Subcommittee reported S. 543, the Commission announced that it would address itself to various cable television matters, including the carriage of distant stations televising professional games. The Commission has adopted rules that govern general distant-station carriage, and these rules fortuitously resolve many of the NFL's concerns by generally forbidding carriage of distant network-affiliated stations in most television markets; most professional football telecasts are on these network stations. But these rules contain provisions that would permit cable systems to carry single programs from these distant stations at various times. It is likely that cable owners, who often advertise outside sports programming a a prime attraction to gain new subscribers, will take full advantage of these provisions. The Commission said in July 1970 (Docket No. 18397-A), and again in February 1972 (Docket No. 19417) that it would deal specifically with the unique problem of cable carriage of sports telecasts, and we have on many occasions expressed our views to the Commission in writing and orally. No action, however, has

yet been taken. Nor is it entirely clear that the Commission has accepted our position that it has the statutory authority to deal comprehensively with the problem.

Meanwhile matters grow more pressing. After an earlier FCC action slowed much of cable's previously rapid growth, the current rules have once again permitted the industry to expand. In just over one year the Commission has issued over 1,000 certificates authorizing establishment of new cable systems or addition of new distant stations on existing systems; many of these systems are or will be located in the heart of the nation's larger metropolitan areas. Systems are now authorized or operating in substantial segments of the Atlanta, Boston, Buffalo, Cincinnati, Cleveland, Los Angeles, New York, Philadelphia, Pittsburgh, San Diego, San Francisco and St. Louis markets, to name only areas where NFL teams are located, and in many other cities and towns as well. There are something like 3,000 cable systems serving about 7 million homes in 6,000 communities across the nation, and one estimate is that 25 million homes will be connected to the cable by 1975.

Thus, the need for an effective solution increases. And that solution simply is to implement either in the copyright law or in FCC regulations the national policy as it affects televising of professional sports contests. As the Subcommittee's earlier action on S. 543 recognizes, that policy is most forcefully expressed in Public Law 87-331 (the Sports Broadcasting Act of 1961), as amended, 15 U.S.C. §§ 1291-95. There are three principal points:

(1) It has always been the right and the practice of NFL teams not to televise a game in the very area in which it is being played. No television station in that area is authorized to carry that game (except by delayed bradcast), and no cable system should have any greater privilege. (The recent action of the Commerce Committee regarding telecasts of sold-out games, even if enacted into law, will have no bearing on this issue, because our concern in the copyright area is simply to see that cable stands on no different footing from broadcasting.) (2) The 1961 Act gave sports leagues like the NFL the right to sell television privileges on a package basis and thereby to control the patterns of game telecasts. This has enabled the NFL to require networks to bring every team's away games back to its home city, which as a practical matter has resulted in games being carried on regional networks. And with one of these games also carried nationally under our relatively new "double header" program, we have been able to give most football fans two or three live telecasts of NFL games each Sunday afternoon during the season while also giving each team roughly equal television exposure. (Of course, Monday night games are also televised as are Saturday games late in the season.)

(3) As reflected in Section 3 of the 1961 Act, protecting attendance at college and high school games is an important feature of national policy. We impose restrictions upon the television networks and upon the teams to carry out this policy.

As we have shown many times, unrestricted cable television would undermine, perhaps seriously, these aspects of national policy and wou'd upset the League's television patterns; it would also erode the value of the television rights we sell to the national networks. To prevent these unwanted and unfair results, we reaffirm our support for Section 111 (c) (4) (C) of the pending bill. S. 1361, and for the other provisions entitling live sports telecasts to full copyright protection. We also urge vigorous action looking toward final enactment of these provisions into law.

STATEMENT OF J. WALTER KENNEDY, COMMISSIONER OF THE NATIONAL BASKETBALL ASSOCIATION, BEFORE THE SUBCOMMITTEE OF PATENTS, TRADEMARKS AND COPYRIGHTS. COMMITTEE OF THE JUDICIARY, U.S. SENATE ON S. 1361

This statement is submitted in connection with the proposed Omnibus Copyright Bill, S. 1361, and specifically to support the retention in its present form of Section 111 (c) (4) (C) of that Bill relating to the carriage of sports programs on cable television systems.

The proposed draft of the Copyright Bill contains provisions which would give to sports events the long overdue copyright-type protection which traditionally has been available to other forms of privately produced entertainment. In addition, the Bill would give to sports the vital blackout protection with respect to cable television systems like that which they presently receive with respect to over-the-air television.

Section 111 (c) (4) (C) of the proposed Copyright Bill deals with the importation of distant sports signals. It provides that cable systems would be able to carry a sporting event only under circumstances when free television could carry it-that is, with proper authorization from the home team within the particular television market.

The National Basketball Association believes that it is vital that Section 111 (c) (4) (C) of the Omnibus Copyright Bill S. 1361 be retained in its present form. Professional sports desperately needs this protection. Without it, cable systems can do without authorization what local stations are properly limited to doing only with permission. Cable should not be able to import distant signals of sporting events unless a local station or cable system is authorized to carry such programs by the appropriate team or league.

The need for the enactment of Section 111 in its present form is illustrated by the nature of the business of professional basketball and by its economic situation.

Professional basketball games are not produced primarily for television viewing and do not have the potential for resale and reuse that a non-sports entertainment program might have. Therefore, importation of distant signals of live basketball games would have harmful results in two important areas: (1) the destructive impact on team attendance at home; and (2) destruction of the team's natural markets for future sales of authorized telecasts and cable transmission.

Sports telecasting is a unique form of entertainment with limited marketability, both in terms of time and regional scope. Therefore, cable importation of distant live sports programs creates problems of a far greater magnitude than such cable distribution of other types of entertainment. Unlike "Lassie" or "Gone With The Wind", very few backetball games (other than the "Game of the Week") have a sufficient national impact to be sold for television on more than regional basis, and none commands the requisite viewer interest to be sold on a repeat basis.

The economics of professional basketball requires that teams and leagues protect and expand existing sources and find new sources of revenues. Costs are such even today that teams cannot exist if they depend solely on the income generated from ticket sales. Television on an authorized, compensated basis has been the answer for sports-but not if cable systems are allowed to destroy these sources of revenues by picking up and distributing programs without compensating either the teams or leagues.

In recent years, a major income factor for the members of the National Basketball Association has been the NBA's ability to sell television rights on a national network basis. Outside this weekly network showing, other existing television rights are sold on a team-by-team basis. The revenues received as a result of this sale of the right to broadcast certain games have kept many NBA teams alive. These revenues are undoubtedly based upon the broadcaster's exclusive right to the game in the relevant territory, his ability to sell commercial time on the broadcast, and the sponsor's willingness to buy the time because he is assured against dilution of the audience by unauthorized cable competition A recognition of the operation of professional basketball is needed to understand the impact of unauthorized cable transmission of distant signals. In contrast with football, professional basketball games are played somewhere in the United States-and perhaps close to a home city-on almost every day of the week. The home team may average two games a week at home, and unlimited cable distribution of distant signals could make available other games on those two days as well as on each of the remaining five days. Under these circumstances, the home team faces competition from within its own industry as well as competition from other forms of entertainment. In the case of a team which is not currently championship caliber, this increased competition can mean disaster.

Professional basketball's need for the protections contained in Section 111 is illustrated by the dilemma of new and less successful teams like the Cleveland Cavaliers. In order to survive, this team must build a local following, sell admissions and local television rights and establish its place in the community. If, on any evenings when the team is at home or not playing at home, Cleveland audiences had available to them on an unlimited basis games involving, for example, the Milwaukee Bucks, the Los Angeles Lakers and the New York Knickerbockers, the local team would have little chance of surviving. Within a short time, such saturation of local markets would result in a

substantial reduction in the number of teams in existence, a loss of player and other employment, the elimination of the opportunity of many persons to see live basketball games, and the disappearance of the other benefits of local involvement which the existence of a home team presently offers. Further down the road could very likely be the shrinkage of the league to a few teams playing against each other principally for television purposes.

The National Basketball Association believes that cable, like over-the-air television, should bargain economically for the right to transmit sporting events and that professional sports should have the right to adequate compensation. The cable industry has often referred to "the public's right to see sports' contests," without any mention of the sports producer's right to be paid for assuming the costs and risks of the business and for his creative efforts in presenting the sports event. We respectfully submit that the public's "right to see" sports contests is no greater than the public's "right to see" "Lassie" or "Gone With The Wind." We point out that no cable operator is so wedded to the public's "right to see" that he would permit anyone to use his cable to exercise that right without paying the cable operator for it.

By adopting Section 111 (c) (4) (C) of the proposed Copyright Bill, the Subcommittee has recognized that professional sports is entitled to traditional copyright protection for the sale and broadcast of sports events.

The protection which you have provided in the proposed Copyright Bill is required for professional basketball because of the regional rather than national interest in many of its programs, because of the perishable nature of its product, because of the need to recognize that the professional sports teams and leagues do have proprietary rights to the sports events in which they participate and because of the economic distress in which the industry finds itself.

The National Basketball Association therefore asks that the provisions of the Copyright Bill affecting professional sports be retained in their present form. Mr. BRENNAN. This concludes the hearings. We will leave the hearing record open until August 10th.

Senator MCCLELLAN. We announced in the beginning of these series of hearings that the interested parties would have until August the 10th

Mr. BRENNAN. August the 10th.

Senator MCCLELLAN [continuing]. to submit statements for the record. And as we conclude these hearings, the Chair would further announce that if we find some gaps in the testimony in the record we may hold another day of hearings or call on people to further respond to the Committee's request for information.

Thank you very much.

[Whereupon, at 4:10, the committee adjourned.]

APPENDIX

STATEMENT OF COPYRIGHT COMMITTEE, AMERICAN ASSOCIATION OF LAW LIBRARIES, SUBMITTED BY JULIUS J. MARKE, CHAIRMAN

Mr. Chairman and Members of the Subcommittee: I am Julius J. Marke, Law Librarian and Professor of Law, New York University. I am also past president and chairman of the Copyright Committee of the AALL, and submit this statement on behalf of the American Association of Law Libraries. The American Association of Law Libraries was established in 1906 for educational scientific purposes. It is conducted as a non-profit corporation to promote librarianship, to develop and increase the usefulness of law libraries, to cultivate the science of law librarianship and to foster a spirit of cooperation among the members of the profession.

Its headquarters is situated at 53 West Jackson Boulevard, Chicago, Illinois 60604, and it has approximately 1600 members located in every state of the union, Canada and Puerto Rico. All major legal publishers in the U.S. are associate members of the AALL. The AALL also has twelve Regional chapters known as Association of Law Libraries of Upstate New York, Chicago Association of Law Libraries, Greater Philadelphia Law Library Association, Law Libraries of New

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