Mar 23, 2017 - Economy

The TV war messing with March Madness

This year will have the most TV blackouts ever. There have already been more this year (125), than all of 2016 combined (104) and more than 1462% more than 2010 (8), per the American Television Alliance.

Data: S&P Global Market Intelligence; Chart: Andrew Witherspoon / Axios

Why this matters: The year's biggest college basketball games are being used as leverage in a fight between pay-TV providers (satellite and cable companies), and broadcast channels. The fight is over retransmission fees -- the money pay-TV providers have to pay broadcast and cable companies to distribute their content and the dispute could spread to other popular sporting events. Since 2010, broadcast and cable companies have raised retransmission rates more than 3700%, in an effort to make up for lost revenue from rising programming costs and declining ad revenues.

Dennis Wharton, EVP of the National Association of Broadcasters, says the retransmission rates have risen to cover rising programming costs, and to account for the value of the programming they license to pay-TV companies. "Every week, 90-95 of the 100 most popular programs are on broadcast television," Wharton says.

Basketball fans are losing... Currently, several markets with big basketball fan bases are being blacked out. CBS signals were blocked in Louisville last weekend, due to retransmission disagreements with Hearst, even though they were the network airing the Louisville vs. Michigan game. Raycom pulled its signal from AT&T-owned U-verse in 23 markets, six of which affect markets with teams in the NCAA tournament. Most notably, UNC and Duke fans had their CBS affiliate signals blacked out in Charlotte.

Because sports are being used as leverage... The FCC leans on parties to resolve retransmission disputes when they arise so viewers are not left in the dark, but it does not have legal authority to intervene unless a formal complaint is filed alleging bad faith negotiations. Sports content is so popular with viewers that it is often used as leverage in those negotiations. Congress asked the FCC to look into whether retransmission consent negotiations are being handled properly, but no decisions have been made on next steps.

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