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January 8, 2007

The Ledger Domain

The Monopolizing of MLB's Extra Innings Package

by Maury Brown

Last summer, I wrote in Blackout Blues how MLB’s arcane territorial television broadcast system restricts consumer options for those that wish to see MLB games out-of-market through MLB.com or MLB Extra Innings. Now, MLB may be creating even more restraints on consumers.

John Orerand and Eric Fisher of the Sports Business Journal have reported that MLB is in advanced talks with DirecTV to make the satellite television company the exclusive provider of MLB Extra Innings. While Extra Innings was initially only offered on DirecTV in 1996, the package has been available on cable since 2001, and on Dish Network since 2004.

If the deal is approved, it is sure to raise the ire of cable interests like Comcast. In fact, the move would seem to be a game of high-stakes poker for MLB, considering that members of Congress and the NFL have been sparring over the latter's decision to use DirecTV as the exclusive provider of the Sunday Ticket package.

In early December, Senator Arlen Specter (R-Pa.) introduced a bill that would repeal the NFL's antitrust exemption under the Sports Broadcasting Act of 1961. Currently, the NFL negotiates the broadcast rights for all of its 32 teams. Specter’s bill would repeal that ability and set up a scenario in which teams would negotiate television deals separately. "As I look at what the NFL is doing today with the NFL channel with the DirecTV ... a lot of people, including myself, would like to be able to have that ticket," Specter said. How Specter factors into the MLB deal with DirecTV has more to do with just his interest in protecting consumers. As noted, Specter is a senator from Pennsylvania. Comcast is headquartered in Philadelphia, and owns In Demand, the company that provides MLB Extra Innings on cable.

Specter's ability to strike fear in the NFL or MLB has lessened since November. Specter was the Senate Judiciary Chairman, but with control of Congress shifting to the Democrats this month, Senator Patrick Leahy (D-Vt.) takes control as chairman of the committee. While Specter is no longer chair, however, he still wields considerable power in Congress, and Leahy hasn't exactly been in MLB’s corner in the past. Leahy helped narrow the scope of baseball's antitrust exemption during the 2002 Congressional hearings on the exemption, saying in his opening statement at the time,

Between the narrowness of the way the Supreme Court had perpetuated baseball’s antitrust exemption-- only as it applied to labor-management relations-- and our work in the Congress, in which we struck the last remaining remnant of the judicially-created exception to the applicability of the antitrust laws, it seems that there is no longer any basis to contend that a general, free-floating baseball antitrust exemption somehow continues to exist.

As for DirecTV itself, the company has other ties to MLB than just a possible exclusive agreement for Extra Innings.