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William Oscar Johnson
August 17, 1981
As more homes gain access to it and other forms of pay TV, more sports entrepreneurs devise ways to reap the rewards
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August 17, 1981

High On Cable

As more homes gain access to it and other forms of pay TV, more sports entrepreneurs devise ways to reap the rewards

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The suit began sending ripples of fear and loathing through the pro football Establishment as soon as the first litigious murmurs were heard three years ago. Even a man of such infinite calm as NFL Commissioner Pete Rozelle had dreams about it. Before the trial began on May 11, Rozelle said, "If Al Davis wins, we have chaos in the league. Each team can auction itself off to the highest TV bidder. The big cities get the big money. So long, Green Bay." He shook his head at the thought. "A team could sell its games to some superstation and encroach on other NFL territories all over the country," Rozelle continued. "Teams could do local pay TV deals on their own. They could kill the NFL."

Wait a minute. The suit that Al Davis, resident genius and managing general partner of the Oakland Raiders, and the Los Angeles Coliseum have brought against the' NFL is a fairly straightforward antitrust charge involving restraint of trade, isn't it? The crux of the Davis complaint is that the part of the NFL constitution known as Article IV, Section 4.3, which requires an affirmative vote from 21 of 28 team owners before a franchise can be shifted, represents an arbitrary and unfair restriction of free enterprise. Davis wants to move the Raiders into the Coliseum, which was vacated by the Rams in 1979, but the other owners vetoed his plan. Thus, he and the Coliseum sued the NFL not only for the right to shift the franchise but also for damages of $15 million. A verdict in Davis' favor would nullify what has come to be known as the 4.3 Rule. Right?

Basically, that's right—superficially right. That the league might lose control over who moves whose team to what town could be troublesome, possibly even chaotic, as Rozelle maintains. But on a more subtle level, many believe that Davis is really threatening something far more precious to the NFL than the 4.3 Rule. That would be its 20-year-old practice of giving every team an even share of all TV revenue.

Gene Klein, 60, is principal owner of the San Diego Chargers. He, Rozelle and Cleveland owner Art Modell make up the NFL's powerful television committee. Before he suffered a massive heart attack in late May this year, Klein testified passionately at the trial—against Davis. Then, outside the courtroom, he gave his version of the true size and shape of Davis' threat to pro football.

"The real success of the NFL is that strong teams in strong towns have no economic edge over weak teams in weak towns," said Klein. "The NFL sees San Diego as just as important as New York. In the Chargers' bad years we survived because of what we got out of our share of the league's TV revenue. Now that we've become a damned good draw, we can help others the same way those teams helped us six years ago.

"Obviously, the fact that the NFL shares television funding equally is what makes the league viable. But Davis sees a $10 million pot of gold at the end of the rainbow in Los Angeles. It is spelled g-r-e-e-d. He doesn't care about the other 27 teams in the league. If he gets away with breaking our constitution in this case, anything is possible. That is the crux of the entire thing, not merely forestalling a franchise shift. If Davis' ideas became reality—if he were allowed to keep all the L.A. pay TV money with no league share—it would ruin the league. I wonder whether Davis wants that."

Of course, Davis says no, he doesn't want that. "Pay TV revenue is not the reason I want to move to Los Angeles," he says. "The reason is that Oakland Coliseum officials and the city have ignored my requests for improvements. Meanwhile, I look around and see the Los Angeles Rams doing $5 million more at the gate than I am, and others keeping $2 million from special-box revenue that they don't share with the league. Of course, if we ever get to the point where larger revenue comes from pay TV than at present, I'm for taking it."

Does that mean Davis favors equal sharing of all such revenue? Davis says yes, but..."I don't believe pay TV is covered by the NFL rules, though the commissioner thinks it is. However, I do favor a continuation of sharing of TV revenue just as we do now."

Davis' lawyer for the NFL suit is Joseph Alioto, former mayor of San Francisco and an antitrust expert. Alioto, too, denies that Davis had any motives except to open a road for the Raiders to the L.A. Coliseum. Nevertheless, Alioto has an interesting thought about the allocation of pay TV money in the NFL's future. "This is my own notion, and you cannot attribute any of it to Al Davis," he says. "The NFL has a 75-mile TV blackout rule for non-sold-out home games. Someone is going to figure out that a team could open up that blacked-out zone to pay TV. If that 75-mile zone happens to be around New York or Los Angeles instead of Green Bay, that's a lot of money. The question is: Would the other NFL teams share that?" Alioto points out that the NFL already has set a precedent for not sharing revenue by allowing owners to keep what they take in from lucrative stadium executive boxes, parking and concessions.

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