Forget ‘Redskin’ decision, here’s what scares NFL
The NFL took a hit on Wednesday from the cancellation of the trademark registration for the team name of the Washington Redskins.
But what may really be more upsetting to the NFL is a lawsuit before the U.S. Supreme Court that some say could change the TV broadcast business, cloud computing and cost the pro football league billions of dollars. A decision could come as early as Thursday.
John McDonnell | The Washington Post | Getty Images
“It might change the NFL, but my guess is the decision will be narrow,” said Mark Conrad, professor of sports law at Fordham University. “The court has a tendency to feel uncomfortable about technology and this suit has a lot of that.”
Billions at jeopardy for NFL
Aereo. which is backed by media mogul Barry Diller, charges around $8 to $12 a month—a fraction of the cost of a typical monthly cable subscription. The service is available in about 11 cities, including New York, Miami, Boston, Atlanta and Houston, with more on the way.
Speaking to CNBC this earlier this month, Aereo founder and CEO Chet Kanoji said his company charges for technology, not TV content, and therefore is not infringing on copyrights.
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But Aereo does not pay the broadcasters retransmission fees, and that has the NFL and other major sports leagues, along with TV broadcasters, including CNBC’s parent network NBC Universal, crying foul.
Those fees are hugely important for broadcasters. According to research firm SNL Kagan, retransmission fees paid by cable and other pay-TV services to broadcasters totaled $2.36 billion in 2012. That number is expected to nearly triple by 2018, accounting for 23 percent of total TV station revenue.
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At jeopardy for the NFL are the billions it’s paid for broadcasting rights. If Aereo wins before the court, the thought is that this would help fans bypass the broadcasters and devalue those expensive contracts with the NFL.
Fordham’s Conrad said any victory by Aereo would be surprising. Kanoji refused to say what would happen if Aereo lost the case.
‘Like throwing spitballs …’
As for the trademark decision against the Washington Redskins by the U.S. Patent and Trademark Office, little will come of it for now, said professor George Belch of the sports business program at San Diego State University.
“It’s like throwing spitballs against a battleship,” said Belch about the 2-1 vote that said the name was “disparaging to Native Americans.”
“Not much is going to happen,” Belch said.
The team issued a statement saying it planned to appeal Tuesday’s action: “This ruling—which of course we will appeal—simply addresses the team’s federal trademark registrations, and the team will continue to own and be able to protect its marks without the registrations. The registrations will remain effective while the case is on appeal.”
The NFL had no comment after the ruling.
Belch agreed that the appeal’s process basically lets the team keep the trademark’s exclusivity and marketing value, which is worth a lot of money from the sales of items like jerseys and T-shirts. He also agreed with the team’s lawyer that Wednesday’s ruling will be overruled on appeal.
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As for the name ever being changed by team owner Dan Snyder, Belch said don’t hold your breath.
“Not even congressional pressure to change it has worked, and the NFL seems to accept it,” Belch said.
—By CNBC’s Mark Koba