with the station, this will go out and be broadcast nationwide, you're saying that the marketplace does not allow that negotiation, that price, to reflect the fact that it is being carried in so many different markets? Commissioner KUHN. That's correct. Mr. DEWINE. Explain to me briefly why that is. What's the mechanics of that? Commissioner KUHN. I think the mechanics are that a WOR simply is not going to be able to put on the kind of advertising which will develop that kind of national market and develop the kind of revenues that a major and highly-flexible network, such as NBC, ABC, and CBS develop by buying rights and selling them nationally, providing the multiple network hookups, carrying many games at one time, doing blackouts and the other things that are necessary to make a network work effectively, and also to have the prestige and reaching power of an NBC or an ABC. WOR simply wouldn't have that reaching power. Therefore, the return is a modest one at the WOR level compared with national network television. Mr. DEWINE. One last question, Mr. Chairman. Could you tell me who the sponsors are of the Braves on TV? Are these national sponsors, or would you classify them as regional? I don't know the answer because I don't watch the Braves. Commissioner KUHN. I believe the answer is that they are increasingly national sponsors. They are not exclusively that, as I recall, but increasingly you will find national beers on there. Mr. DEWINE. Doesn't that seem to indicate that there is a return and that they're appealing to a national market and, thereforeCommissioner KUHN. Yes, in the case of WTBS, I think they are generating more of a national market, and generating more of a national return. Of course, in the case of WTBS, it doesn't work out because the payment goes to the Braves alone and the Braves are owned by WTBS. So that's a negotiated thing, one hand with the other, the left hand with the right hand, and it does not reflect a national market. Mr. DEWINE. Thank you, Mr. Chairman. Mr. KASTENMEIER. The gentleman from Ohio, Mr. Kindness. Mr. KINDNESS. Thank you, Mr. Chairman. I apologize for having been delayed in joining this hearing. I will be reviewing more closely the written testimony and appreciate your appearing before us today, Mr. Kuhn. I have no questions, Mr. Chairman, and would yield back. Mr. KASTENMEIER. You do have a point there. I must say, I was looking at the special report on baseball in Broadcasting magazine. WTBS pays the Atlanta Braves $2.1 million, which I note is the smallest amount, if only by a narrow margin, paid by any television broadcaster in the National League. The Cincinnati Reds receive $2.3 million, and $2.4 million goes to the San Diego Padres. So I don't think one hand is paying the other hand quite enough in compensation. Commissioner KUHN. I think that's correct, Mr. Chairman. Mr. KASTENMEIER. The gentleman from Kansas, Mr. Glickman. Mr. GLICKMAN. I told you I would be back. Commissioner KUHN. I knew you would. [Laughter.] Mr. GLICKMAN. First of all, I want to welcome you here. We have a joint interest, Mr. Chairman. My family owns a Triple A baseball franchise, and unfortunately during the term of Mr. Kuhn we were not able to get him out to Kansas as there has been now another switch in the affiliation just this past year. But maybe in your new capacity, whatever it is, you might be able to- Čommissioner KUHN. I am still open to invitations, Mr. Glick man. Mr. GLICKMAN. It's a Triple A franchise. Now it's the Cincinnati Reds franchise. It was Montreal for 2 years and Chicago for several years. Commissioner KUHN. Wichita. Mr. GLICKMAN. Yes, the Wichita Arrows. I just would ask you a couple of questions. I'm sure you have covered most of this territory before. If you had your druthers, what would you do with the CRT? Commissioner KUHN. Well, we salute them for their 3.75 rate. [Laughter.] As I said at the outset of my remarks, we do feel that the elimination of the compulsory license would be the best for us. We would warmly support that, as do members of this committee, I know. Mr. GLICKMAN. One final question. On page 24 of your statement you observe that "We do not quarrel with the principle that cable subscribers in the smaller markets should have the same viewing options as those in the larger markets." I think that's an exact quote from your statement. Now, assuming that we maintain the compulsory license, how do we achieve that goal of ensuring access into the smaller markets? Commissioner KUHN. That is a harder question to answer. I don't think the bills before the committee are going to achieve it, with all due respect to the proponents of those bills. I don't have a ready answer as to how that is going to be achieved. I am not so certain that it doesn't take more study, and as I said to the chairman earlier, we would be more than happy to sit down with the chairman, the Congressmen or whoever, and see if we can make any suggestions that would be useful on that. I don't have one at this point. Mr. GLICKMAN. OK. One final question, Mr. Chairman. I don't know if you have answered this before, but I think your testimony indicated your opposition to H.R. 2902, Mr. Synar's bill. Would you support that if it were amended to give two rather than three distant signals at statutory rates? Commissioner KUHN. No, I would not, because I still don't think that gets at the basic problem that we perceive from a sports point of view. I still think it presents the difficulty of not providing a fair return to the sports entrepreneurs for their copyrighted property. Mr. GLICKMAN. Thank you. Thank you, Mr. Chairman. Mr. KASTENMEIER. I have one last question. This may be outside the scope of this inquiry, although there are several members of this committee who also are members of the Commerce Committee, which deals with communications policy. I am wondering whether in the future, Congress may be confronted with appeals from broadcasters alleging that these pay TV/ pay cable packages are shutting out regular television broadcasting in some of those markets, because they, of necessity, will be competing with one another. I say that in the context of serving people who are not going to the ball park, but who by one means or another will be seeing baseball. Another aspect of this is whether your successor will be defending league owners in their own pay TV/cable operations against old line TV broadcast operations in terms of contracts in the future. That is to say, some of these people won't have 40 dates or 18 dates a year; they'll get down to 12 and fewer because the owners will want to emphasize that as the attraction. Commissioner KUHN. I would like to give you my opinion on that. It's an opinion because, in terms of facts, I can only tell you that up to now it hasn't happened. In theory, maybe it could have started happening, but it hasn't really happened. As I said, in baseball we're as high or higher in over-the-air television than we have ever been. I don't think the danger is as great as you might think, and I say that for this reason. There are wonderful, rectifying forces out in the marketplace, one of which is public relations, to which we are enormously sensitive. I think if we were so minded at a particular club level to greatly reduce over-the-air television, it would to a considerable extent be offset by the public relations problems that would be induced by that. Furthermore, I think you have got to say this: If I were a club operator and I were faced with a set of books that were just horrendous, with no prospect of getting better, I might want to take a chance on going a little more to the pay route as opposed to the over-the-air route in order to try to balance my books, if I thought I could do it that way. But I really think the rectifying effect of public relations is going to be a powerful one, and it has been a powerful one, so much so that in the long history of baseball on television, we have had that over-the-air there, and even as the cable and pay has emerged, it stayed there. Mr. KASTENMEIER. I hope you or your successor will be enormously sensitive to that question. Commissioner KUHN. I think you can count on the fact that we will be. I can tell you, from my own point of view, that I frequently talk to clubs about their over-the-air exposure and the importance of trying to maintain it, because I think it helps the overall good of the game. So I may say to Club X "I know you're thinking about cutting back, but would you think about tailoring that somewhat." You would be surprised how responsive they might be to suggestions like that. Mr. KASTENMEIER. If there are no further question, on behalf of the committee I want to again thank you, not only for your appearance today and your many appearances before this and other committees of the Congress, but also to thank you for your service to baseball and to the American people. Commissioner KUHN. Thank you, Mr. Chairman. Mr. KASTENMEIER. That concludes today's hearing. [Whereupon, at 2:50 p.m., the subcommittee was adjourned.] APPENDIX 1 BILLS, CURRENT LAW AND BACKGROUND INFORMATION 98TH CONGRESS 2D SESSION H.R.5878 To amend title 17, United States Code, with respect to the Copyright Royalty IN THE HOUSE OF REPRESENTATIVES JUNE 15, 1984 Mr. KASTENMEIER (for himself, Mr. SYNAR, and Mr. KINDNESS) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend title 17, United States Code, with respect to the 1 Be it enacted by the Senate and House of Representa 2 tives of the United States of America in Congress assembled, 3 4 SHORT TITLE SECTION 1. This Act may be cited as the "Copyright 5 Royalty Tribunal and Cable Television Reform Act of 6 1984”. 7 8 9 TITLE I-COPYRIGHT ROYALTY TRIBUNAL MEMBERSHIP OF THE TRIBUNAL SEC. 101. (a) The first sentence of section 802(a) of title 10 17, United States Code, is amended to read as follows: "The 2 1 Tribunal shall be composed of three commissioners appointed 2 by the President, by and with the advice and consent of the 3 Senate, for a term of seven years each.". 4 (b) Section 802(b) of title 17, United States Code, is 5 amended by striking out "Upon" and all that follows through 6 "Thereafter, the" and inserting in lieu thereof "The". 7 (c) The amendment made by subsection (a) of this sec8 tion shall take effect on September 28, 1984, but shall not 9 affect the terms of office of the three offices of commissioners 10 of the Copyright Royalty Tribunal remaining on such effec11 tive date. 12 13 STAFF OF THE TRIBUNAL SEC. 102. (a) Section 805 of title 17, United States 14 Code, is amended by adding at the end thereof the following 15 new subsection: 16 "(c) The Tribunal shall appoint and fix appropriate com 17 pensation for a general counsel and a chief economist to carry 18 out the functions customarily performed by persons in such 19 positions.". 20 (b) The appointments required by section 805(c) of title 21 17, United States Code, as added by subsection (a) of this 22 section, shall first be effective no earlier than September 28, 23 1984. 24 25 JUDICIAL REVIEW OF TRIBUNAL DECISIONS SEC. 103. (a) Section 810 of title 17, United States 26 Code, is amended by inserting after the second sentence the HR 5878 IH |