BILL ANALYSIS
AB 2522
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Date of Hearing: May 19, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2522 (Saldana) - As Amended: April 28, 2010
Policy Committee: Arts Vote:5-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill prohibits a professional sports team located in this
state, as specified, from being eligible to receive state
financial assistance, as defined, in the fiscal year following
any fiscal year in which a broadcast of any home sporting event
of that team is blacked out. This bill also:
1)Exempts the following from the above provision:
a) Financial assistance appropriated to a team or revenue
from taxes imposed to support the team and in effect, prior
to January 1, 2011.
b) Financial assistance appropriated or allocated pursuant
to a contract if failure to do so would constitute a breach
of the contract.
2)Defines "financial assistance" to be: (a) bonds or other forms
of indebtedness; (b) loans, grants, subsidies, guarantees or
payments; (c) below-market leasing or licensing or
below-market sale or conveyance of real property; (d)
acquisition of real property; (e) tax incentives, exemptions,
credits, rebates, reductions, or moratoria, reimbursement or
forgiveness of fees; and (f) tax exempt financing.
FISCAL EFFECT
The fiscal impact of this bill is speculative. Nevertheless, to
the extent enactment of this bill has no impact on the blackout
policies of professional sports leagues, the provisions of this
bill could potentially (1) hinder the ability of local
governments to attract or retain professional teams and/or (2)
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increase by some marginal amount any public financial assistance
provided to a team, as "insurance" against a loss of subsidy in
the year following a blackout. In the first case, the result
would be a loss of the economic benefits associated with a
sports franchise. In the second case, the result would be
additional local costs and/or state/local revenue losses,
depending on the type of subsidy provided. These costs are
unknown, but could exceed $150,000 in any fiscal year.
To the extent that this bill, with or without enactment of
similar legislation in other states (see below), leads a
professional league or leagues to relax or eliminate their
blackout policies, the result could be a marginal increase in
economic activity, and state/local revenues from the local
broadcasting of otherwise blacked-out sporting events.
COMMENTS
1)Background . A blackout is generally defined as a situation in
which certain programming, usually sports, cannot be televised
in a certain media market. While this legislation is broadly
targeted at any professional sports team or franchise, in all
materials and references to the bill the author addresses her
primary concerns to the National Football League (NFL).
Indeed, according to background material supplied by the
author, this bill is part of a nationwide effort to persuade
the NFL to alter its blackout policies, which includes elected
officials from California, Florida, Michigan, Missouri, New
York and Pennsylvania. Not coincidentally, each of these
states host an NFL team that has experienced, or is
anticipated to experience, television blackouts of their home
team games.
(The NFL's policy on blackouts, which has been in place for 36
years, states that any broadcaster that has a signal that hits
any area within a 75-mile (120 km) radius of an NFL stadium
may only broadcast a game if that game is a road game, or if
the game sells out 72 hours or more before the start time for
the game.)
Much of the concern about potential blackouts may be traced to
news reports of the NFL's forecast for the upcoming season. As
reported last fall in the Sports Business Journal, "Up to four
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times the number of NFL teams are at risk of having at least
one of their games blacked out locally when the season begins
next week compared with last year, the latest sign the down
economy is taking a toll on even America's most popular sport.
According to the NFL, in the seasons 2006-08, there only were
7, 10 and 9 local blackouts of game telecasts throughout the
league, respectively. In 2009, the number of local blackouts
increased to 22.
2)Purpose . According to supporters of this bill, "The blackout
rule is bad for already-struggling local economies. When games
are not televised, fans stay home and restaurants and bars
lose out on revenues from Sunday and Monday night crowds.
Local television affiliates lose out on advertising revenues,
as do advertisers whose commercials never air. Team
merchandise sales fall and that hurts local retailers as well
as the team franchise."
3)Opposition . The NFL argues that the bill could impact the
building or refurbishing of football stadiums in the state,
which would have negative economic impacts. The league
believes blackouts are necessary in order to have large
in-stadium crowds for their games.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081