NFL, MLB back broadcasters in fight vs Aereo

Source: Aereo

The National Football League and Major League Baseball have threatened to move all of their games to cable television if streaming startup Aereo is deemed legal, the professional sports leagues said in a new legal filing.

In a "friend of the court" filing with the U.S. Supreme Court dated Nov. 12, both leagues threw their support behind the broadcasters in a high-profile dispute with Aereo, which has drawn legal fire since it began in 2012.

Aereo is a New York-based startup backed by Barry Diller's Internet and media company IAC InterActivecorp that uses personal TV antennas to give subscribers access to free over-the-air broadcast channels for a small fee.

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NFL and MLB file brief against Aereo
NFL and MLB file brief against Aereo

The lawsuits involving Aereo were being closely watched because its product is seen as a threat to the TV industry's ability to control subscription fees and generate advertising revenue, their two main sources of revenue.

In October, broadcasters ABC, which is owned by Walt Disney, CBS, Comcast's NBC Universal and Fox Television Stations, asked the Supreme Court to hear their case claiming the online service steals copyrighted television content. CNBC is a unit of NBC Universal.

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The broadcasters are appealing an April decision by the 2nd U.S. Circuit Court of Appeals that denied their request to shut down Aereo while litigation moved forward. The sports leagues have urged the Supreme Court to take the case.

Weighing Netflix's leverage
Weighing Netflix's leverage

A key question in the lawsuits is whether Aereo's technology provides users with a "public performance" of the plaintiffs' content. Copyright owners have the exclusive right to public performance of their works.

Fox, CBS and NBC broadcast both NFL and MLB games. The sports leagues argued that Aereo is illegally rebroadcasting signals without licensing the content for which it charges other companies such as Verizon and DirecTV hundreds of millions.

"This judicially created loophole allows such services to avoid the force of the Leagues' copyrights in broadcasts of their games, eroding the value of one of the Leagues' most important assets," the leagues said about Aereo.

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The leagues said they will be left with no choice but to move their games to cable TV networks, which Aereo cannot carry for free.

"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 said.

A spokeswoman for Aereo declined to comment on the filing.

Some top-tier sporting events have already migrated to cable, such as some of the games in the NCAA Men's basketball tournament, which airs on some Turner-owned networks, and some baseball playoff games.

The leagues said about 90 percent of their regular-season games are on broadcast TV, which also feature all NFL playoff games and the heavily viewed Super Bowl.

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Major League Baseball allows broadcasters to air about 400 games per year, including the World Series on Fox.

The leagues said Aereo also threatened its sports packages that offer out-of-market games to fans—"an important source of income."

One of the NFL's concerns expressed in the filing was that Aereo could create a service similar to NFL Sunday Ticket, which is DirecTV's exclusive package of out-of-market football games on Sundays.

DirecTV pays the NFL an estimated $1 billion per year for the rights to offer the games to its subscribers and is currently in an exclusive negotiating window with the league to renew the deal.

Major League Baseball also has an "MLB Extra Innings" package that pay-TV subscribers can buy, as well as an Internet service.

—By Reuters