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NFL, MLB To Supremes: If Aereo Wins, Broadcasters Lose

Leagues Say They Would Need to Move Sports to Pay Platforms 11/17/2013 11:24 AM Eastern

Forget sports siphoning to pay TV. If Aereo wins its court case, the floodgates will open and the World Series, Super Bowl and probably the regular seasons of pro baseball and football will be moving to ESPN, TNT and other pay outlets.

That was the message from Major League Baseball and the NFL to the Supreme Court in an amicus supporting a broadcaster effort to block Aereo's online TV station delivery service.

Broadcasters have been arguing that Aereo threatens its business model, and the sports league's brief definitely puts some meat on that bone.

"If copyright holders lose their exclusive retransmission licensing rights and the substantial benefits derived from those rights when they place programming on broadcast stations, those stations will become less attractive mediums for distributing copyrighted content," they wrote to the court. "The option for copyright holders will be to move that content to paid cable networks (such as ESPN and TNT) where Aereo-like services cannot hijack and exploit their programming without authorization."

The leagues point out that they get a $100 million cut of the $300 million in compulsory copyright license fees cable ops pay for retransmitting TV station content, as well as indirectly benefitting from the billions in retrans fees broadcasters also collect. Both of those models are threatened by an Aereo win since cable could also use that model to avoid paying broadcasters they say.

The leagues say the Second Circuit court of Appeals conclusion that Aereo did not violate copyright laws by not paying for the TV station signals it collects in an on-air antenna farm and delivers to subs "judicially empowers Aereo and similar services to destroy marketplace-negotiated exclusivity." Broadcasters had sought an injunction from the appeals court, and when that was denied, appealed that decision to the Supreme Court.

The NFL pointed out that an Aereo could theoretically create a Sunday Ticket package for free by delivering a suite of TV stations airing different games in their home markets. Aereo currently confines its service to delivering the stations only to their markets, but the leagues say the court decision does not preclude extending their reach to other markets.

"The Court’s intervention is now necessary to restore clarity and certainty in this area and to prevent the unraveling of a marketplace built upon the licensing of rights rather than the expropriation of such rights through technological chicanery," the leagues said.
 

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