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Source link: http://archive.mises.org/14200/blacking-out-economic-reality/

Blacking Out Economic Reality

October 11, 2010 by

The Oakland Raiders beat the San Diego Chargers yesterday. Unfortunately, few folks in the Oakland area actually witnessed this, noted the Oakland Tribune:

The announced crowd was only 48,279 in a stadium that holds 63,132. A week earlier, the Raiders attracted only 32,218 fans for a game against the Houston Texans, their smallest crowd since 1967.

All three of Oakland’s home games this season have been blacked out on local TV, stretching the current streak to the past 10 homes games dating back to 2009. In all, 79 of 143 home games have been blacked out since the Raiders moved back to Oakland from Los Angeles in 1995.

The NFL’s television policy — which dates back to 1951, when “Arthur Godfrey’s Talent Scouts” was the number-one show in the land — currently prohibits the networks from broadcasting a team’s home games in its home market unless the game is sold out at least 72 hours prior to kickoff. (Actually, a team need not sell every seat — a 1987 amendment excludes certain “premium” seats from blackout calculations.) So Raiders fans who actually live in the Bay Area are not allowed to see their team’s games on television unless the NFL is satisfied that enough seats were sold at the stadium.

The blackout policy is a charming, if annoying, throwback to the pre-Internet era when conventional business wisdom held that withholding a product from the public somehow made it more attractive to potential customers. But this isn’t the 1970s, and football fans are increasingly turning to technology to circumvent the NFL’s blackout edicts. The San Diego Union-Tribune recently reported:

[San Diego] Chargers fans … used atdhe.net, a no-frills website that offers dozens of live TV and sports events. The site provides no information about the origin of the telecasts, or the location of its operational headquarters. One Internet search indicated atdhe.net is based in Sweden.

There are others, such as justin.tv, channelsurfing.net and my2p2.eu. Some are more reliable than others, depending on bandwidth and demand for a particular game. Some disappear from cyberspace, only for others to magically appear — making policing them akin to the whack-a-mole carnival game.

But they work, as about 200 customers at O’Brien’s Irish Pub & Grill learned Sunday in Carrollwood, Fla. The CBS telecast from the blacked-out Tampa Bay-Pittsburgh game was routed through a computer to bar TVs; the images were grainy, but it beat waiting for the free replay on nfl.com at midnight.

Roger Goodell, the NFL’s chief executive officer, told reporters yesterday at the blacked-out Raiders game that he is “studying” the blackout policy but added, “We want to make sure our stadiums are full.” Amy Trask, the Raiders CEO, blamed the stadium itself and said the team needed a new one:

“We’re having ongoing discussions about the stadium opportunities,” Trask said. “We’re working very, very cooperatively with the city and with the local officials. We’ve been extolling the virtues of this site for a quite a while now.”

Trask is pushing for a project that includes more than a new stadium. She said she envisions a facility that serves as “a catalyst for an urban renovation in the manner in which to bring economic stimulus for the whole region. We have been working very cooperatively with the city. (We) understand this region. Right now, fans come to this facility and there’s nowhere for them to spend their money in the area.”

Trask used the S-word — “stimulus” — which should tell you how economically sensible a new stadium would be. Keep in mind, the Raiders moved back to Oakland in 1995 after spending a decade-plus in Los Angeles. Raiders owner Al Davis has never been satisfied with any of the leases he’s signed with government-run stadium authorities, and he lacks the private capital necessary to build his own facility. Any new stadium means hundreds of millions of dollars in government-backed bonds, if not outright taxation.

Of course, the Raiders’ problems drawing fans couldn’t possibly stem from 20 years of mismanagement by Davis and Trask. NFL policy holds that owners are never responsible for their team’s misfortunes. If an owner makes poor financial decisions, the solution is a government bailout — i.e., a new taxpayer-financed stadium — or to punish customers by blacking games out. Anything to avoid dealing with the actual consequences of the owners’ decisions.

{ 5 comments }

Michael A. Clem October 11, 2010 at 2:24 pm

They want a new stadium, eh? If they can’t fill the old one, why should they get a new one??

Franklin October 11, 2010 at 6:50 pm

Good commentary, and so much food for thought — Pandora’s box loaded with streaming game data as controllable as water in a strainer; more well connected CEOs finagling taxpayers subsidies, even if it swipes money from granny who wouldn’t know a gridiron from a facemask; team owners as accountable as Fed chairmen; and the son of a career pol as commissioner, following in Dad’s footsteps as another statist lifer.
The league is metaphor for entrenched bureaucracies who have no compunction in using the stiff-arm of government like a running back tearing down the sideline.
I’ll be rooting for the Vikings tonight while trying to ignore the closed and subsidized club called the NFL.

Anonymous October 11, 2010 at 10:25 pm

I don’t have any problems with the NFL’s blackout policy. If the fans of an NFL team don’t care enough to actually buy tickets to see that team play, then the NFL should black them out in that market. The NFL made the right decision in the 1970s when they decided to stop blacking out sold-out games. Obviously, the Oakland Raiders are a team that has been incompetently run for the last decade or so, but the Jacksonville Jaguars are a regular contender. Last year, the Jaguars had 7 games blacked out despite being a competitive team and that 8th game (against the Colts in December) was only “sold out” because they threw a party and gave out a bunch of free tickets. If a game is blacked out and you want to see it, you can go to the stadium and buy a ticket.

The Raiders do not need a new stadium. They need a new owner (Al Davis is 81, so they should get one before too long). The Raiders moved out of Los Angeles because they couldn’t sell out the LA Coliseum (which seats 90,000 and sometimes even more than 100,000). I don’t think anybody who looks at the evidence could possibly defend tax-funded sports stadiums. Even many leftists recognize that this particular government program doesn’t “stimulate” the economy.

My main complaint is that my local TV station, which is a “secondary market” for my favorite team and therefore required by the NFL to show all of their roads games decides to show their main divisional rival’s games when they are both playing at the same time and the NFL permits them to do so. I don’t see why the NFL allows a network which is considered to be in the territory of a team to show another game instead when that team is at home. I have used streaming web sites to be able to see the game that I should be able to see on my local TV network. I think the NFL allows TV networks to get away with this because they want people to subscribe to DirecTV and purchase their NFL Sunday Ticket pay-per-view package, although to the NFL’s credit, they don’t blackout games on their PPV package like Major League Baseball does.

JR October 11, 2010 at 10:25 pm

Team owners could fill stadium seats the way Japanese baseball teams do: just lie about attendance figures, adding as many fans as they think necessary.

And anyone who has watched a few sumo tournaments in Japan has seen the ceremonious lowering of the “Thanks for the Full House” banner while a large percentage of the seats are obviously empty. What you won’t see is sumo blackouts, as every two months each entire 15 day tournament is broadcast live by NHK, the state’s television network.

Wait, I take that back! Recently sumo WAS blacked out in order to punish wrestlers who had been caught gambling. Try to follow the logic there!

Pat October 16, 2011 at 5:56 pm

The NFL is no different than wall street. No respect for the fans. I will not buy another ticket until they change the blackout crap. Maybe I like watching from home. And maybe I will stop buying NFL gear too. Since the only thing that matters to the NFL is ticket sales. How dare you punish the fans that pay their taxes for the stadiums usually. If you think that you can force fans to fill your stadiums. You’ve sadly mistaken your popularity.

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