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As broadcasting patterns shift, potential antitrust liability looms for the NFL

Mike Florio and Peter King examine the impact that flexing TNF games during Week 14 through Week 17 would have on the fans, as well as how this could negatively affect the best teams.

For the most part, the NFL sails through clear, open waters. But there’s an iceberg out there, whether the league is worried about it or not.

The shift from traditional, over-the-air TV to streaming could eventually land the league in an antitrust mess, for one very important reason. The antitrust exemption from the Sports Broadcasting Act of 1961 quite possibly, if not most likely, does not apply to NFL games sold through web-based services.

Here’s a fairly recent item from the University of Iowa’s Journal of Corporation Law regarding the league’s looming legal challenges, if/when (when) the bulk of the broadcasting cash comes from the likes of Amazon, YouTube, and other tech companies that don’t make games available through free channels beyond the markets in which the involved teams play.

In short, a strong argument can be made that the antitrust exemption doesn’t apply to streaming based on subscriptions, not advertisements. Regardless of how the issue would be resolved in court, the NFL becomes susceptible to an argument that this new age of non-TV television wipes out the ability to legally sell all games in one block.

Of course, there can’t be a legal entanglement without someone actively trying to change the status quo. To get things started, a plaintiff is needed. An entity to claim that the antitrust laws apply in the streaming world, and that a streaming service should be allowed to strike a deal with (for example) the Dallas Cowboys to make its games available to all customers -- without having to buy a broader, league-wide package that would, on an annual basis, become a box of Forrest Gump-ian chocolates.

It’s not necessarily a one-way street. The potential for an antitrust fight becomes far more compelling if/when a team like (for example) the Dallas Cowboys wants to break ranks from the model that has been in place for decades.

Really, what’s to stop Jerry Jones from standing up during the annual meetings in Arizona and going on and on (and on) about how this new world of streaming changes everything? That he’d like to be able to sell the streaming rights to his team’s home games to Amazon or whoever, and keep all the money?

At its core, the sports league that many regard as a shining example of American capitalistic exceptionalism shows strong elements of socialism, with 32 businesses working together to ensure that the rising tide lifts all boats equally.

What if Jones or one of the other owners of what would be one of the more desirable teams decides that it no longer makes sense to take less in the name of helping everyone else get more?

This isn’t a prediction that it will happen. It’s an acknowledgment that it could.

The fact that owners will be voting to adopt Thursday night flexing in order to boost the Jeff Bezos billion-dollar-per-year investment underscores the league’s appreciation and awareness of where the world is going. It’s just a matter of time before streaming takes over. When it does, the NFL may be dealing with a can of worms that has remained sealed shut since the early 1960s.

Whatever the league’s plan for dealing with this fundamental change to its potential portfolio of liability, it needs to have one. It may be just a matter of time before someone argues persuasively that, while the league has an antitrust exemption that allows all-or-nothing rights deals with the likes of CBS, NBC, Fox, and ABC, the league can’t control global streaming rights -- and each team must be able to strike its own deal for its own home games.

And, yes, when it happens the league will fight. It will resist. It will try to find a way to force the whole thing into arbitration resolved by the Commissioner.

Still, the iceberg is out there. And the NFL is moving closer and closer to it.