to reap a financial reward.

The process, however, becomes even more troublesome when cable systems import into a club's home territory literally hundreds of distant signal telecasts of other league members.

Such

oversaturation is no longer a mere possibility, but a concrete and troubling reality.

For example, the cable operator that recently was awarded the Boston franchise has promised to import some 600 distant signal baseball telecasts each season; this amounts to more than 3 telecasts each and every day that the Red Sox attempt to attract fans to one

of their home games or viewers to one of their telecasts. Consider also the Los Angeles cable operator who attempts to sell subscriptions to his system, claiming:

"For the first time you'll have a chance
to see 400 major league games from
everywhere! Both leagues, all 26 teams.
And all the action, complete and live,
as it happens.

"It's Theta's biggest baseball season!
And you can reserve your box seat now
by installing Theta Cable TV. "16

16 The above is taken from an advertisement which Theta Cable placed in the April 5, 1981 Los Angeles Times, a copy of which is attached as Exhibit 3. Theta Cable serves some 100,000 subscribers in Los Angeles and is wholly-owned by Westinghouse, the nation's second largest multiple system operator.

situations such as those in Boston and Los Angeles.

For example

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-

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Historically, cable systems served only
those rural and mountainous areas which
lacked adequate television reception.
Recently, however, cable has become
convinced that there is a pot of gold
in every major urban market
the very
areas upon which the clubs depend for
gate and broadcast revenues. Indeed,
each of the markets with a Major League
Baseball franchise is now in one stage
or another of the cable franchising process.

As explained below, over the last five
years the FCC has all but completely
deregulated the cable industry. Most
significantly, it has within the last
year removed all restrictions on the number
of distant signals that cable systems
may import. The result is that there
is no significant regulatory limit on
the vast amounts of distant signal sports
programming available for importation.

Perhaps the most important development, however,

has been the creation and growth of satellite-delivered superstations with their significant amounts of professional sports programming.

In late 1976, after passage of the Copyright

Act, Station WTBS-TV in Atlanta was placed on satellite.

Today, WTBS reaches a phenomenal 20,375,000 subscribers 67.7 percent of the nation's cable households and some 25 percent of the nation's television households." Two other stations, WGN-TV (Chicago, Illinois) and WOR

TV (New York, New York), have also been placed on

satellite.

These signals reach some 8.2 million and

4.9 millon homes respectively."

A prime characteristic

of each of these stations is that it is a flagship not only of a Major League Baseball club, but of other

professional sports clubs as well:

17 Multichannel News, March 29, 1982, at 4.

18 Cablevision Magazine, April 26, 1982, at 248.

convinces us of the harm posed by the uncontrolled importation of such large numbers of competing telecasts. If we could successfully function with the clubs invading each others' home markets with their telecasts, we would have long since changed our telecasting patterns to take advantage of the additional revenues which this extraterritorial telecasting would provide. However, as we have understood for years, the introduction of substantial amounts of competing telecasts over either conventional television or cable television poses a serious threat to the very determinants of a club's to the following of its hometown fans as that is reflected in the size of its gate and the value of its broadcast rights.

succesS -

The weaker teams in particular are susceptible to the potentially devastating effect of having their home territories saturated by a glut of sports telecasts from distant markets. And, as Congress concluded when it passed the Sports Broadcast Act of 1961, 15 U.S.C. § 1291 et seq., "Should these weaker teams be allowed to flounder, there is danger that the structure of the

98-703 0-82--10

3.

Compulsory Licensing Un-
fairly Deprives the Sports
Clubs of the Right To Re-
ceive Adequate Market-

place Compensation for the
Use of Their Telecasts by
Cable

There is no question that the cable industry

derives a substantial economic benefit from distant

signal sports telecasts. In the Spring of 1980 Arbitron, one of the nation's leading market research firms in the communications industry, conducted a survey to determine, among other things, the reasons why people subscribe to cable. Arbitron found that somewhere between 30 to 50 percent of the responding households listed distant signal sports as a principal reason for subscribing to cable.

The cable industry itself recognizes the immense value of distant signal sports programming in attracting and maintaining subscribers. This is perhaps best illustrated in the promotional material which is used to market superstations. Typical of the statements

19 H. R. Rep. No. 87-1178, 87th Cong., 1st Sess. 3 (1961); S. Rep. No. 87-1087, 87th Cong., 1st Sess. 2 (1961).