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TheStreet Open House

NFL Blackouts Wane, but Still Worrisome

Stocks in this article: BUD CBS CMCSA NWS DIS DTV

The pessimist reminds fans that even if they're not blacking out games, teams are still struggling to fill seats. The NFL has a loophole in its blackout policy that allows teams and their official sponsors to keep games on television by buying back unsold tickets at a third of their price. The Miami Dolphins had to buy back 10,000 tickets last weekend and donated them to military personnel and veterans after teaming with sponsor Anheuser-Busch InBev (BUD) earlier this year.

The Dolphins aren't the only ones who've needed an assist from Anheuser-Busch to keep commercials ... er ... games on the air this season. Back in Week 3, Anheuser-Busch bought 1,200 tickets at Bank of America (BAC - Get Report) Stadium to keep the Carolina Panthers' matchup with the Jacksonville Jaguars on the air. Exactly two weeks later, A-B intervened again and bought 3,300 tickets to the Jaguars' home game against the Bengals at EverBank Field. All of that "help" is on top of the $1 billion A-B paid to wrest the NFL's official beer sponsorship away from MillerCoors (TAP) last year.

In Florida, where unemployment in NFL cities hovers between 10% and 11%, the NFL blackout issue is so sensitive that Florida state Sen. Mike Fasano, a Republican from New Port Richey, has proposed a bill in the Florida Legislature to reverse $60 million in tax breaks each of the Florida teams got in the past 30 years in the event of a home-game blackout. Another Republican in the Florida Senate, Michael Bennett, discovered a little-known Florida law that requires NFL stadiums to function as homeless shelters when they're not being used by the franchises. Bennett asserts that failure to live up to that agreement should require teams to forfeit state funding.

With national unemployment holding at around 9% and unemployment in NFL blackout cities such as Cincinnati (8.7%), San Diego (9.7%) and Oakland (9.2%) at that level or worse, asking fans to shell out more money to the 31 of the NFL's 32 teams that already accepted public funding for stadiums isn't as easy as it was. That hasn't prevented the NFL and its teams from trying, though, as Team Marketing Report notes that the $77 average ticket price has increased by $15 in five years and that the average cost of tickets, concessions, parking and other stadium amenities costs a family of four an average of $400 per game.

Oddly, that money at the gate accounts for less than 22% of total NFL revenue. Meanwhile, the NFL's television take from its agreements with CBS (CBS), NBC (CMCSA), Fox (NWS), ABC/ESPN (DIS), DirecTV (DTV) and its own network accounts for half of its $8 billion total revenue. That imbalance has prompted fan and consumer groups, including the Sports Fan Coalition, National Consumers League, Public Knowledge, Media Access Project and Ralph Nader's League of Fans, to file a petition with the Federal Communications Commission last week asking it to repeal the blackout rule that it hasn't addressed since 2005. The petition asserts, among other things, that "when professional and collegiate sports enjoy vast public subsidies in the form of taxpayer-funded stadiums; federal antitrust exemptions; roads, highways and public transit serving sports arenas; tax-exempt status for professional sports leagues; state and federal grants to public universities; and other support, the public -- sports fans -- should be able to watch the games that they helped to finance."

"This is the biggest organized effort in decades to put an end to the federal government's support for anti-consumer blackouts," Frederick says. "It is ridiculous that the leagues continue to black out games from their own fans after taking in massive public subsidies, during such difficult economic times, and even more ridiculous that the federal government props up this practice through the sports blackout rule."

-- Written by Jason Notte in Boston.



>To contact the writer of this article, click here: Jason Notte.

>To follow the writer on Twitter, go to http://twitter.com/notteham.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.
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