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Baseball also argues that its weak teams are hurt by cable's importation of games between stronger teams an assertion they are unable to prove yet the major league owners refuse to take steps which could restore a better competitive balance to the league. The National Football League teams, for instance, pool their broadcast revenues and divide them among the league teams. As a result, teams have the financial wherewithall to improve upon bad seasons. But baseball owners hoard every penny of their broadcast revenues for themselves so the rich get richer and the poor stay poor.

If they weren't so short sighted, the baseball team owners have it within their own ability to remedy or mitigate the problem (if any) which they claim occurs as a result of relative team weaknesses or strengths. Beyond this fact, however, I believe the actions of baseball owners have shown the "bringing in a game by cable hurts my gate and broadcast revenues" argument to be specious.

If showing a competing game on television is so damaging why is it done all the time in cities with two baseball teams? Recently. while in Los Angeles I happened to notice that LA baseball fans could watch both the Dodgers (who were away) and the Angels (who were home) on traditional broadcast television. The sports-supported amendment proposed to H.R. 5949 in the Judiciary Committee, as a matter of fact, contained specific language to ensure that it could not be interpreted as prohibiting the kind of two game broadcast situation I just described. Now what I cannot understand is why there is no harmful impact in broadcasting both the away Dodger game and the home Angels game but somehow it is disasterous if the Braves or the Padres game comes into the market on cable.

And while we're talking about incomprehensible inconsistencies why is it that major league baseball allows the television networks to bring a baseball game into a market where a live game is being played, but it is described as "disasterous" for a cable operator to do the same thing? Let me be specific. H.R. 5949 and the NBC Game of the Week contract are identical in effect: both prohibit the showing of the same game in the market in which it is being played while permitting another game to be shown. The existing network contract, as a matter of fact, requires the network to substitute another game when the primary game is blacked out. This isn't good enough where cable is concerned, however, the baseball owners want to black out all games. Just like in the previous example, I cannot understand why it isn't harmful to bring in the network's backup game but it is harmful to bring in a game via cable.

Private Gain Versus Public Interest

What the team owners are really arguing, of course, is that they are somehow harmed if they are prevented from extracting every dollar that could conceivably be extracted from the controlled distribution of their product. This is the classic position of the monopolist, and in some respects it isn't surprising that they should assert it.

As the attached article "Monopoly Pays Off in the Business of Sports" (Business Week, October 13, 1980) describes, over the years the owners of professional sports teams have sought and received federal dispensation to arrange their affairs in a manner that would be prosecuted under the Sherman Act if attempted by any other industry. In 1922. the Supreme Court construed the Sherman Act so as to allow professional baseball owners to establish

and enforce exclusive franchise areas.

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And, in 1961, the Congress amended

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the antitrust laws to allow professional sports leagues to collectively withhold, coordinate and control the sale of their respective teams' broadcast rights. Now the same owners are again before Congress asking that they be made the sole determiners of what games sports fans may watch on cable, where and how they must watch them and what the individual fan must pay. It is a classic squeeze play.

Now I don't suppose one should criticize the sports owners too sharply for aggressively pursuing what Tocqueville would have called "self interest properly understood." But what about the public interest? Let's consider the plight of the archetypical baseball fan. In 1922. his access to baseball was limited when the owners got the right to divide up the marketplace. Because the league could strictly control the number and location of its teams our fan's ability to watch professional baseball was curtailed. Next,

when broadcast television became widespread, and our fan had a technological method for balancing out of this contrived scarcity of pro games, the owners got the right to collectively determine broadcasting practices, again limiting the choices of our poor fan. Note that this is unparalleled outside of professional sports; if the movie producers, for example, tried to divide up markets geographically or agree to restrict the distribution of their product, they would be found guilty of antitrust violations, as indeed they were in the recent Premiere case. In any event, having already gone most of the way towards restricting the availability of baseball. the major leagues now want to apply the squeeze through a special dispensation which provides that if our fan wants to see a baseball game on cable he can see only what the owners' choose and at the price they name.

already being compensated several times over for display of their product: first, through ticket prices, which rose 31% from 1976 to 1980 notwithstanding the growth of cable; second, through increased attendance which rose 37% over the same period, notwithstanding the growth of cable; and third, through the sale of broadcast rights which have been dramatically rising notwithstanding the growth of cable; and fourth. through royalty payments from cable operators who retransmit broadcast signals on which sporting events are carried.

Why do the professional sports owners want this final public policy break? It's simple: PAY TELEVISION. The baseball owners want the right eventually to give the 90 million Americans in the 30 markets where there are professional sports franchises one and only one choice: PAY a fee to see the game in person or PAY a fee to see it either on cable or subscription television. They do not want even the minimal competition of other games which might be offered on a basic cable tier. I leave it to the committee to judge whether the public laws ought to be arranged to accommodate this end.

Let me close by saying that the professional sports owners, by seizing on the cable copyright issue, are hoping to muddy the waters sufficiently to achieve a status which is neither grounded in copyright nor capable of being passed in a free standing bill. Meanwhile, the fate of H. R. 5949, over which my association together with MPAA and NAB have labored so hard, hangs in the

balance.

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As I indicated earlier. support of H.R. 5949 has been a compromise for all of us. As a result of strong efforts by the leaders of the three groups our industries coalesced around something which was mutually disagreeable. That coalition has a lifespan limited to the 97th Congress. If H.R. 5949 is not passed in this Congress I believe the coalition will fall apart. Getting this far was so bloody and so difficult that I would be hard pressed to imagine the compromise being put together again next year.

Thus, the issue becomes a question of whether a major accord of the principal parties in interest can be undone by the demands of professional sports owners for one more special break -- a legislatively imposed advantage which bears no resemblance to existing copyright policy or to the agreement reached by the three main parties.

Mr. Chairman, I would suggest to you today that both the interests of sports fans and the interests of the major copyright owners and users are being held hostage to the unreasonable demands of the sports owners. I urge this committee not to pay the ransom, to legislate and, hopefully. to close the book on the ever recurring cable copyright debate once and for all.