There was a moment before the USA’s first World Cup match on Friday when Thierry Henry noted that his booth partner Alexi Lalas had shed a tear as the national anthem played. After starting his story, Henry caught himself, looked at Lalas, and asked, “Can I share?” The moderately awkward moment demonstrated that Fox’s studio show is very much a work in progress.

By next week, I’m sure, Henry won’t be following any sort of on-air broadcaster permission structure—instead, he’ll realize that the first rule of sports media is to say whatever is on your mind and apologize (or don’t) later. I expect this grade to improve as the tournament progresses, provided the chemistry continues to develop. It’s already been laugh-out-loud funny to watch Henry and Zlatan Ibrahimović, a true talent, tease Lalas on set.

And now, here’s Eriq…

Perhaps it’s no surprise that the two largest institutions in American life, the U.S. government and the NFL, would eventually meet at the crossroads of media disruption. Indeed, amid the NFL’s attempt to bid up its existing media partners in exchange for extending their distribution contracts by a few years, Rupert Murdoch allegedly met with President Trump to raise his concerns over the flight of NFL games away from traditional broadcasters, like his Fox, to streamers—a sentiment echoed in the mogul’s own paper, The Wall Street Journal. Soon enough, members of Congress were kicking up a fuss over whether the Sports Broadcasting Act of 1961, an antitrust exemption that allows NFL teams to collectively pool and market their games, needed to be revisited.

But watching last week’s House Judiciary Committee hearing on the S.B.A. was, frankly, a little painful. As someone who closely follows the NFL’s legal battles—and who has spent plenty of money trying to watch my beloved Rams from the D.C. area—I found myself increasingly frustrated. Republicans played populist chords; Democrats used the occasion to take shots at Murdoch and the Paramount–Warner Bros. Discovery merger. But almost no one appeared to have a firm grasp on the actual law. The closest anyone came to an uncomfortable truth was Rep. Darrell Issa, who acknowledged that Congress has remarkably little leverage over the NFL through the S.B.A. itself.

The hearing left me thinking this story needs a bit of a rewrite. So I put together a list of five hard truths about what the S.B.A.’s exemption actually means for the NFL, broadcasters, and fans. These aren’t the points that politicians or witnesses spent much time discussing. But they’re the ones that belong at the center of the conversation.

A surprising number of people talk as though the S.B.A. requires NFL games to remain on broadcast television. It doesn’t. The S.B.A.’s core function is to provide antitrust protection for the NFL’s collective sale of television rights. But granting immunity from certain antitrust challenges is not the same as dictating where those rights can be sold. There is nothing in the statute that requires the league to do business with broadcasters rather than streamers.

Sure, defenders of the traditional model have a point. Before Congress enacted the S.B.A., the Justice Department had begun making headway against the NFL’s practice of pooling television rights. Congress responded by creating a safe harbor, in part because lawmakers believed broad public access to games through free, over-the-air television—what the statute calls sponsored telecasting—served an important public interest. That’s the historical justification, and the reason the exemption is limited to broadcasting. But it doesn’t actually address the ultimate legality of the NFL’s partnerships with Amazon, Netflix, YouTube, or whoever comes next. At its core, the S.B.A. merely invites a review of whether pooling rights for nonbroadcast dealmaking is somehow anticompetitive.

Obviously, the legal landscape has changed dramatically since Congress enacted the S.B.A. Conduct that drew intense antitrust scrutiny in the mid-20th century, when the Justice Department aggressively pursued cartels in entertainment markets, isn’t necessarily viewed the same way today. The NFL has long argued—and would surely continue to argue without the S.B.A.—that some degree of collective action is necessary to produce the product itself. After all, professional football works only because 32 independently owned teams agree on schedules, rules, revenue sharing, competitive balance, and a host of other coordinated activities. Courts have increasingly recognized that reality—which may be one big reason we haven’t seen a wave of lawsuits directly challenging the NFL’s streaming deals as unlawful under the antitrust laws.

The closest thing is the long-running Sunday Ticket litigation. In that case, plaintiffs persuaded a jury that the NFL’s out-of-market package inflated prices and restricted competition, producing a blockbuster verdict worth billions of dollars. Then the trial judge threw it out. Now the plaintiffs’ lawyers are trying to revive the case on appeal and salvage years of litigation and tens of millions in upfront costs.

As I’ve written before, the Ninth Circuit could bring the case back to life. If that happens, the NFL may have a genuine problem. The Justice Department could also enter the picture, though there is little evidence that this administration is eager to bring such a case—despite a Wall Street Journal article a few months back about a federal investigation. Even then, the league would hardly be out of options. A revived Sunday Ticket case could ultimately reach the Supreme Court; if so, Justice Brett Kavanaugh has already suggested sympathy for the view that sports leagues are unique joint ventures that require coordination among competitors to function.

None of this means the NFL would want to repeal the S.B.A. But there’s a credible argument that it could survive just fine without it.

The public case for the S.B.A. is usually framed as protecting access to games. But how many consumers are actually watching games through antennas? Research I’ve seen suggests it’s about 15 percent of households. Most viewers instead access CBS, Fox, NBC, and other broadcast networks through a paid service—whether that’s cable, satellite, YouTube TV, Fubo, Hulu+Live TV, or something similar—raising the question of the increasingly negligible difference between streaming and cable.

There may be sound policy reasons to favor broadcasters. Local stations are more likely to invest in local news and community programming, and Congress may reasonably decide that preserving over-the-air television serves a broader public interest. But those are arguments for supporting local broadcasting, not necessarily arguments for protecting sports fans. If the goal is maximizing consumer choice, innovation, and access, the answer is far less obvious.

Many younger viewers have already voted with their wallets. They prefer streaming and expect content to be available on demand and across devices, and accessible without a traditional cable package. From their perspective, a policy that advantages broadcasters may look less like consumer protection than incumbent protection—and, simply, a pain in the ass. I’m surprised that streamers haven’t articulated this point more forcefully. It highlights one of the real oddities of this whole S.B.A. dynamic: At a moment when Congress is openly questioning whether streamers should have access to the NFL’s most valuable rights, Netflix, Amazon, YouTube, and others have largely stayed on the sidelines.

If you listened closely to last week’s hearing, you may have noticed National Association of Broadcasters president Curtis LeGeyt explicitly disclaim the need for repeal of the S.B.A. He instead asked Congress to “reaffirm” that the statute’s antitrust protection applies only to traditional broadcasting. Whatever one thinks of that argument, it reveals something important: Broadcasters understand that eliminating the S.B.A. altogether could create problems for them, too.

If Congress repealed the statute, one of two things would happen: Either NFL teams would begin negotiating television deals independently, or the league would continue largely with business as usual and dare plaintiffs to challenge its collective rights model in court. If it’s the latter, why wouldn’t broadcasters find themselves in the crosshairs alongside the NFL? Without an antitrust exemption, broadcasters wouldn’t merely be passive observers. They would be counterparties to the very arrangements being challenged. Plaintiffs could argue that the networks participated in a structure that suppressed competition for rights, foreclosed rival bidders, and prevented the sort of innovation that might emerge in a more open marketplace. At that point, the broadcasters could find themselves in a position not unlike the one occupied by DirecTV during portions of the Sunday Ticket litigation: defending their role in an allegedly anticompetitive system. (Remember, broadcasters are currently supporting the NFL in the ongoing appeal at the Ninth Circuit. So keep that in mind when you hear talk of the need to enforce the S.B.A.)

Alas, Democrats may have spent too much time talking about Rupert Murdoch pulling strings and not enough time calling the bluff. If Murdoch is indeed behind this effort, he’s playing a far riskier game than many seem to appreciate. And not merely because, as John Ourand noted the other day, NFL officials aren’t exactly thrilled by the discussion.

Everyone agrees that fans are frustrated—but not on what the problem actually is. Is it rising subscription costs? Fragmentation across platforms? The decline of free over-the-air television? Broadband access? Blackouts? Different critics offer different diagnoses, yet often speak as though they’re discussing the same problem. I’m not convinced they are. That’s one huge reason I’m skeptical that Congress is anywhere close to a solution.

In conversations I’ve had, some broadcasters appear hopeful that lawmakers might pursue a more aggressive version of what’s contemplated in the Cruz–Cantwell college sports bill: If a game is carried by a streamer, the rights-holder would have to make it available on free TV in the local market. That’s certainly one approach. But even if that were politically viable, it would address only a narrow slice of consumer frustration. It doesn’t solve the fans’ complaint that following the NFL increasingly requires a stack of subscriptions, only to discover that the Christmas game—or the playoff game, or the international game—requires yet another service.

There’s also a deeper philosophical question lurking beneath the debate. Are lawmakers really prepared to dictate how sports rights must be distributed, complete with ongoing government oversight of who can show what and where? Many of the same people celebrating competition when it lowers prices or expands choice seem remarkably comfortable with rules that would limit how buyers and sellers can structure deals.

And that brings me to perhaps the strangest thing about last week’s hearing: For a discussion ostensibly focused on an antitrust exemption, there was remarkably little discussion of the world without one. What would happen if the exemption disappeared? What would a genuinely competitive market for NFL rights look like? Would teams strike their own deals? Would new entrants emerge? Would consumers be better off—or worse? Those are the questions that should have dominated the hearing. Instead, much of the conversation revolved around preserving or reallocating the current system. For a debate about competition, there was surprisingly little interest in imagining what actual competition might look like.

Thanks, Eriq. See you all tomorrow.

John

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