Before the COPYRIGHT ROYALTY JUDGES Washington, DC

Home , 2010 NHL Winter Classic, 2012 NBA Finals, CTV (pay television)

Electronically Filed Docket: 14-CRB-0011-SD (2010-2013) Filing Date: 03/22/2019 09:49:52 PM EDT

Before the COPYRIGHT ROYALTY JUDGES Washington, D.C. ______) In re ) ) NO. 14-CRB-0011-SD (2010-13) DISTRIBUTION OF SATELLITE ) ROYALTY FUNDS ) ______)

WRITTEN DIRECT STATEMENT OF THE JOINT SPORTS CLAIMANTS

Volume I of III

Daniel Cantor Michael Kientzle Bryan L. Adkins ARNOLD & PORTER KAYE SCHOLER LLP 601 Massachusetts Ave., NW Washington, D.C. 20001-3743 Counsel for the Office of the Commissioner of Baseball

Philip R. Hochberg LAW OFFICES OF PHILIP R. HOCHBERG 12505 Park Potomac Avenue Potomac, MD 20854 Counsel for the National Basketball Association, National Football League , National Hockey League , And Women’s National Basketball Association

Ritchie T. Thomas SQUIRE PATTON BOGGS (US) LLP 2550 M. St., N.W. Washington, D.C. 20037 Counsel for the National Collegiate Athletic Association

Of Counsel:

Michael J. Mellis Executive Vice President and General Counsel OFFICE OF THE COMMISSIONER OF BASEBALL 245 Park Avenue New York, NY 10167 TABLE OF CONTENTS

VOLUME I: Written Direct Testimony of the Joint Sports Claimants TAB

Written Direct Statement ...... MEMORANDUM James M. Trautman ...... 1 Daniel Hartman ...... 2 David Shull ...... 3 Andrew Dick, Ph.D...... 4 William Wecker, Ph.D. and R. Garrison Harvey ...... 5

VOLUME II: Exhibits of the Joint Sports Claimants TAB Testimony of Gregory S. Crawford, Ph.D. Docket No. 14-CRB-0010-CD (2010-13) (corrected April 11, 2017) ...... 1

Testimony of Daniel Hartman Docket No. 14-CRB-0010-CD (2010-13) (December 22, 2016) ...... 2

Testimony of Daniel Hartman Docket No. 14-CRB-0010-CD (2010-13) (September 15, 2017) ...... 3

Testimony of Mark Israel, Ph.D. Docket No. 14-CRB-0010-CD (2010-13) (December 22, 2016) ...... 4

Testimony of Allan Singer Docket No. 14-CRB-0010-CD (2010-13) (December 22, 2016) ...... 5

Testimony of Allan Singer Docket No. 14-CRB-0010-CD (2010-13) (September 15, 2017) ...... 6

Testimony of James Trautman Docket No. 14-CRB-0010-CD (2010-13) (December 22, 2016) ...... 7

VOLUME III: Transcripts of Oral Testimony TAB Testimony of Gregory S. Crawford, Ph.D. Docket No. 14-CRB-0010-CD (2010-13) (February 28 and March 1, 2018) ...... 1

Testimony of Daniel Hartman Docket No. 14-CRB-0010-CD (2010-13) (March 12-13, 2018) ...... 2

Testimony of Mark Israel, Ph.D. Docket No. 14-CRB-0010-CD (2010-13) (March 12, 2018) ...... 3

i Testimony of Allan Singer Docket No. 14-CRB-0010-CD (2010-13) (February 22, 2018) ...... 4

Testimony of James Trautman Docket No. 14-CRB-0010-CD (2010-13) (February 15, 2018 and February 20, 2018) ...... 5

ii Before the COPYRIGHT ROYALTY JUDGES Washington, D.C.

) In re ) ) DISTRIBUTION OF SATELLITE ) NO. 14-CRB-0011-SD (2010-13) ROYALTY FUNDS ) )

WRITTEN DIRECT STATEMENT OF THE JOINT SPORTS CLAIMANTS

Pursuant to Section 351.4 of the rules of the Copyright Royalty Judges (“Judges”), 37

C.F.R. § 351.4, and the Judges’ order in this proceeding dated November 2, 2018, the Joint

Sports Claimants 1 (“JSC”) submit the following written direct statement:

• Volume I contains the written direct testimony of JSC’s six witnesses.

• Volume II contains the written testimony from the 2010-13 cable royalty distribution proceeding that the JSC witnesses discuss in their written direct testimony and cite as JSC Exhibit Nos. 1-7,

• Volume III contains the transcripts of the oral direct, cross and redirect examination pertaining to the written testimony in Volume II.

JSC hereby designate the testimony in Volumes II-III for inclusion in their written direct statement pursuant to 37 C.F.R. § 351.4(b)(2). This memorandum sets forth JSC’s royalty claim as required by 37 C.F.R. § 351.4(b)(3), and summarizes the written direct testimony in Volume I.

1 The Joint Sports Claimants are the Office of the Commissioner of Baseball, National Football League, National Hockey League, National Basketball Association, Women’s National Basketball Association, and the National Collegiate Athletic Association.

OVERVIEW OF JSC’S WRITTEN DIRECT STATEMENT

The purpose of this proceeding is to determine the shares of the 2010-13 satellite royalty funds that should be allocated to the program categories represented by:

• Broadcaster Claimants Group (“BCG”); • Settling Devotional Claimants (“SDC”); • Joint Sports Claimants (“JSC”); • Music Claimants (“Music”); and • Program Suppliers

See, e.g. , Notice of Participant Groups, Commencement of Voluntary Negotiation Period

(Allocation), and Scheduling Order , No. 14-CRB-0011-SD (2010-13) (Nov. 25, 2015) (setting forth program category definitions.) Music has settled its claims to the 2010-13 Section 119 royalties. 2 JSC, Program Suppliers, BCG and SDC (the “Allocation Phase Parties”) dispute the appropriate allocation of the remaining funds among themselves.

There is no express statutory standard for the allocation of Section 119 royalties, just as there is no statutory standard for the allocation of Section 111 royalties. The Judges and their predecessors have never previously determined the allocation of Section 119 royalties among the

Allocation Phase Parties. The Section 119 license was created in 1988, and since that time the copyright owners entitled to Section 119 royalties have successfully settled all prior Allocation

Phase disputes.

The Judges have applied a “relative marketplace value” standard in previous Allocation

Phase (“Phase I”) and Distribution Phase (“Phase II”) cable allocation proceedings, as well as in

Phase II satellite proceedings. E.g. , Distribution of Cable Royalty Funds , 84 Fed. Reg. 3552

(Feb. 12, 2019) (“2010-13 Cable Final Determination”); Final Determination of Royalty

Distribution , No. 2012-6 CRB CD 2004-09 (Phase II) and No. 2012-7 CRB SD 1999-2009

2 See Amended Order Granting Renewed Joint Motion for Final Distribution of 2010-13 Satellite Royalty Funds to Music Claimants , 14-CRB-0011-SD (2010-13) (Sept. 12, 2017).

Written Direct Statement of the Joint Sports Claimants | 2 (Phase II), at 5 (Feb. 13, 2019). The D.C. Circuit has noted its approval of the use of “relative market value” as the “key criterion for allocating awards” in the Section 111 context. Program

Suppliers v. Librarian of Congress , 409 F.3d 395, 401-02 (D.C. Cir. 2005).

The Judges recently assessed the relative fair market value of programming carried pursuant to the Section 111 license. 2010-13 Cable Final Determination, 84 Fed. Reg. at 3552.

The Judges’ allocations in that proceeding are set forth below:

Id.

As the JSC witnesses will testify, the 2010-13 Cable Final Determination is the most appropriate benchmark for allocating the 2010-13 satellite royalties among the Agreed

Categories. The Judges regularly rely upon benchmark evidence in rate proceedings, and in the

2010-13 Cable Final Determination the Judges explained that they evaluate benchmark evidence in the following manner:

In choosing a benchmark and determining how it should be adjusted, a rate court must determine [1] the degree of comparability of the negotiating parties to the parties contending in the rate proceeding, [2] the comparability of the rights in question, and [3] the similarity of the economic circumstances affecting the earlier negotiators and the current litigants, as well as [4] the degree to which the assertedly analogous market under examination reflects an adequate degree of competition to justify reliance on agreements that it has spawned.

Id. at 3602.

Written Direct Statement of the Joint Sports Claimants | 3 As the JSC witnesses will testify, a comparison of the parties at issue, the rights at issue, the economic circumstances, and the degree of competition establishes that the allocation set forth in the 2010-13 Cable Final Determination is the most appropriate benchmark for purposes of allocating 2010-13 Section 119 satellite royalties:

• The sellers—the broadcast stations that assemble programming on signals—are

the same in both the cable and satellite hypothetical free market used to assess

relative marketplace value. The buyers in the hypothetical free markets—cable

systems and satellite carriers—are direct competitors and thus very similar.

Cable and satellite companies directly compete for the same customers using

very similar programming and very similar business models where revenue is

derived primarily from subscriber fees. Both cable systems and satellite carriers

make their decisions about which distantly retransmitted programming to carry

based on the programming’s ability to attract and retain subscribers.

• The rights conferred by Section 111 and 119 are very similar and in many

aspects the same, as each gives cable systems and satellite carriers respectively

the right to retransmit commercial broadcast signals. Neither Section 111 nor

Section 119 permits the cable system or satellite carrier to insert advertising into

the signal. 17 U.S.C. §§ 119(a)(5) (satellite); 111(c)(3) (cable); see also 2010-13

Cable Final Determination at 3599 (“The value of distant signals to CSOs is in

attracting and retaining subscribers, and not contributing to supplemental

advertising revenue”). Both licenses require the payment of statutorily-

prescribed royalties and compliance with applicable Federal Communications

Commission regulations.

Written Direct Statement of the Joint Sports Claimants | 4 • Cable systems and satellite carriers faced the same economic circumstances

during 2010-13, including a maturing market with fewer new customers

available and increasing programming costs.

• The 2010-13 Cable Final Determination assessed relative value in a hypothetical

free market, which by definition had an adequate degree of competition.

JSC WITNESSES

1. James M. Trautman.

Mr. Trautman is Managing Director of Bortz Media & Sports Group, Inc. (“Bortz”), a market research firm that has advised various clients in the broadcast and cable industries concerning, among other things, the value of television programming. Mr. Trautman’s testimony will explain the operation of the Section 119 and Section 111 licenses and their many similarities. As Mr. Trautman will testify, the signals and programming carried by satellite carriers and cable systems pursuant to the Section 119 and Section 111 licenses, respectively, during this period were highly comparable.

Mr. Trautman also testifies to the relative importance of WGNA to both cable and satellite subscribers. WGNA constituted approximately 73% of all subscriber instances for signals distantly retransmitted by both cable and satellite subscribers during 2010-13. Likewise,

WGNA accounted for the substantial majority of all royalties paid by cable and satellite carriers during 2010-13. In other words, WGNA was the predominant distant signal retransmitted by cable systems and satellite carriers during 2010-13.

Given the similarities in the operation of the Section 119 and 111 licenses, the similarities in the programming carried pursuant to each license, the similarities in parties involved, and the similarities in economic circumstances, Mr. Trautman testifies that the 2010-13 Cable Final

Written Direct Statement of the Joint Sports Claimants | 5 Determination is the most appropriate benchmark for allocating the 2010-13 satellite royalty funds.

2. Daniel Hartman

Mr. Hartman spent fifteen years (including during 2010-13) as a programming executive with DirecTV, one of the two major U.S. satellite television providers. His responsibilities included negotiating for carriage rights, including the rights to carry WGNA and other signals pursuant to the Section 119 license. In that capacity, Mr. Hartman developed significant expertise in the valuation of television programming.

Mr. Hartman will testify that satellite carriers and cable systems competed directly with one another for the same customers; they simply used different technologies to transmit television programming. Therefore, satellite carriers and cable systems valued television programming in the same manner and paid highly similar prices for it. He will explain that, given the direct competition between cable and satellite companies and their similar valuation of television programming, the 2010-13 Cable Final Determination provides the most appropriate benchmark for distributing the Section 119 royalties collected during the 2010-13 period.

Mr. Hartman will further testify to the important role that sports programming played at

DirecTV. DirecTV paid nearly two-thirds of the Section 119 royalties during the 2010-13 period, and focused primarily on the acquisition of JSC programming—including the JSC programming on WGNA.

3. David Shull

David Shull spent approximately 11 years in programming roles with Dish Network LLC

(“Dish”), the second-largest payer of Section 119 royalties during the 2010-13 period. From

2008 to 2013, Mr. Shull served in the role of Senior Vice President, Programming, at Dish. In

Written Direct Statement of the Joint Sports Claimants | 6 that role, he was primarily responsible for the acquisition of content, negotiation of the pricing of content, and determination of the line-up or packaging of channels provided to Dish subscribers.

His team was responsible for reviewing content-related contracts and payments, including the copyright payments paid by Dish for signals carried pursuant to Section 119 of the Copyright

Act.

Mr. Shull will testify that during 2010-13, cable systems and satellite carriers competed directly for subscribers. They employed very similar approaches to attracting and retaining customers, placed similar valuations on different types of programming, and insisted on most favored nations clauses requiring price protections relative to each other in their carriage agreements with station owners. Mr. Shull will explain that JSC programming was the most important type of programming for purposes of subscriber acquisition and retention during the

2010-13 period, and thus the most valuable. WGNA was the predominant distant signal carried by Dish during 2010-13, and Dish elected to carry WGNA because of its more than 100 live team sports games each year. Mr. Shull will explain that Dish placed far less value on the infomercials (which Dish would have dropped if it were permitted to), general entertainment programming (which was similar to other available programming), and devotional programming

(which was limited in volume and not something for which satellite carriers would typically pay) carried on WGNA. In addition, Mr. Shull will testify that the network-originated programming on ABC, CBS, and NBC contained some of the most valuable JSC programming during this period, including major sports events such as the Super Bowl, Sunday Night Football, and the

NBA playoffs.

Written Direct Statement of the Joint Sports Claimants | 7 4. Andrew Dick, Ph.D.

Dr. Andrew Dick is an economist at Charles River Associates (“CRA”), an economics consulting firm, where he holds the position of Vice President in the Competition Practice. He received a Ph.D. and M.A. in Economics from the University of Chicago and a B.A. in economics and political science from the University of Toronto. Prior to joining CRA, he was employed by the Antitrust Division of the U.S. Department of Justice. Dr. Dick has substantial experience evaluating competition regarding cable and satellite carriers, various forms of media, and with regard to professional and collegiate sports.

Dr. Dick has reviewed the testimony of Messrs. Trautman, Hartman, and Shull, as well as various data and other information concerning the retransmission of distant signals by satellite carriers and cable systems. Dr. Dick has considered each of the factors in the Judges’ benchmarking standard and will testify that as an economic matter, the allocation in the 2010-13

Cable Final Determination is the most appropriate benchmark for the allocation of the 2010-13 satellite royalties. Dr. Dick will testify that the structure of the hypothetical market is the same for purposes of determining relative marketplace value for royalties paid by both satellite carriers and cable systems. In each hypothetical free market, the broadcaster that has assembled the programming at issue onto a signal is the seller, and satellite carriers and cable systems, respectively, are the buyers. Dr. Dick will explain that cable systems and satellite carriers are direct competitors, competing for the same customers using very similar programming and very similar business models. The value of programming to both satellite carriers and cable systems is the acquisition and retention of customers (neither can sell advertising on distant signals and thus advertising revenue is not available).

Written Direct Statement of the Joint Sports Claimants | 8 Dr. Dick also will testify that the rights conveyed pursuant to Section 111 and 119 are very similar, namely the ability to retransmit broadcast signals. Cable systems and satellite carriers exercised these rights in very similar manners, with WGNA playing a predominant role in terms of subscriber instances and royalty payments. In addition, Dr. Dick will explain that cable systems and satellite carriers faced the same economic circumstances in 2010-13. Among other things, during 2010-13, the cable and satellite markets had matured, making it difficult to obtain new subscribers and putting a premium on retaining existing subscribers. Team sports programming, with its passionate fans and live nature, was key to customer retention. Dr. Dick will also explain that the hypothetical market evaluated by the Judges in the 2010-13 Cable Final

Determination was a free market and thus by definition had adequate competition, satisfying the fourth prong of the Judges’ benchmark criteria. Dr. Dick has reviewed the benchmark calculation performed by Dr. Wecker and Mr. Harvey, see infra , and will testify that the methodology applied is economically sound.

5. William Wecker, Ph.D. and R. Garrison Harvey

Dr. Wecker and Mr. Harvey are both statisticians and applied mathematicians. Dr.

Wecker is the President of William E. Wecker Associates, Inc. (“Wecker”), an applied mathematics consulting firm, and Mr. Harvey is Vice President and Principal Consultant at

Wecker. Dr. Wecker holds a Ph.D. in statistics and management consulting from the University of Michigan, and has previously served on the faculties of the University of Chicago, the

University of California, Davis, and Stanford University. Mr. Harvey holds an M.S. in operations research from the Air Force Institute of Technology. He has served as an expert in a wide-array of litigation, arbitration and regulatory proceedings.

Written Direct Statement of the Joint Sports Claimants | 9 Dr. Wecker and Mr. Harvey’s testimony implements the 2010-13 Cable Final

Determination as the benchmark for the allocation of the 2010-13 satellite royalties by applying the relative allocations in that decision to the relative volumes of programming attributable to each Allocation Phase Party carried by satellite carriers during the 2010-13 period. To apply the benchmark, they first derive the relationship between the Judges’ allocations in the 2010-13

Cable Final Determination and the relative volume of programming attributable to each participant in that proceeding. They then apply the resulting ratios to the relative volumes of each Allocation Phase Party’s programming carried pursuant to Section 119 during the 2010-13 period. The results of this calculation are as follows:

2010-13 Satellite Royalty Allocations Based Upon the Judges’ 2010-13 Cable Royalty Allocations

Claimant Category 2010 2011 2012 2013 2010-13 BCG 22.18% 20.80% 21.70% 20.03% 21.20% Devotional 1.81% 3.25% 3.45% 2.89% 2.84% PS 39.08% 37.60% 28.81% 27.24% 33.40% JSC 36.93% 38.35% 46.04% 49.85% 42.57% Total 100.00% 100.00% 100.00% 100.00% 100.00%

CLAIM OF JSC

JSC respectfully request that the Judges award the JSC category no less than the following shares of the 2010-13 satellite royalty funds:

YEAR SHARE 2010 36.93% 2011 38.35% 2012 46.04% 2013 49.85%

Written Direct Statement of the Joint Sports Claimants | 10 JSC reserve the right, under 37 C.F.R. § 351.4(b)(3), to request, prior to or in the submission of their proposed findings, an award greater than the above amounts based upon the record evidence.

Respectfully submitted,

JOINT SPORTS CLAIMANTS

By: /s/ Michael Kientzle Daniel Cantor (D.C. Bar No. 451115) Michael Kientzle (D.C. Bar No. 1008361) Bryan L. Adkins (D.C. Bar No. 988408) ARNOLD & PORTER KAYE SCHOLER LLP 601 Massachusetts Ave., NW Washington, D.C. 20001-3743 202.942.5000 (voice) [email protected] [email protected] [email protected] Counsel for the Office of the Commissioner of Baseball

Philip R. Hochberg (D.C. Bar No. 5942) LAW OFFICES OF PHILIP R. HOCHBERG 12505 Park Potomac Avenue, Sixth Floor Potomac, MD 20854 301.230.6572 (voice) [email protected] Counsel for the National Basketball Association, National Football League , National Hockey League , And Women’s National Basketball Association

Ritchie T. Thomas (D.C. Bar No. 28936) SQUIRE PATTON BOGGS (US) LLP 2550 M. St., N.W. Washington, D.C. 20037 202.626.6600 (voice) 202.626.6780 (facsimile) Counsel for the National Collegiate Athletic Association

Of Counsel:

Michael J. Mellis Executive Vice President and General Counsel OFFICE OF THE COMMISSIONER OF BASEBALL 245 Park Avenue New York, NY 10167

Written Direct Statement of the Joint Sports Claimants | 11 CERTIFICATE OF SERVICE

I hereby certify that on this 22nd day of March, 2019, a copy of the foregoing Written

Direct Statement of the Joint Sports Claimants was filed electronically using eCRB, which will automatically provide electronic service copies to all counsel of record who are registered to use eCRB. See 37 C.F.R. § 350.6(h)(1).

/s/ Michael Kientzle Michael Kientzle

Before the COPYRIGHT ROYALTY JUDGES Washington, D.C.

) In re ) ) DISTRIBUTION OF ) NO. 14-CRB-0011-SD (2010-13) SATELLITE ROYALTY FUNDS ) )

Written Direct Testimony of

JAMES M. TRAUTMAN

March 22, 2019

Written Direct Testimony of JAMES M. TRAUTMAN

I. Qualifications

I am Managing Director of Bortz Media & Sports Group, Inc. (Bortz Media). I prepared this testimony at the request of Major League Baseball, the National Football League, National

Basketball Association, Women’s National Basketball Association, National Hockey League and the National Collegiate Athletic Association (collectively, the Joint Sports Claimants or JSC).

For more than thirty years, I have supervised market research assignments addressing a wide range of issues affecting the satellite and cable television industries, including issues related to the valuation of television programming. I have also provided support to program network clients in conjunction with (and/or participated on their behalf in) distribution negotiations with multichannel video programming distributors (“MVPDs”) including both DirecTV and DISH

Network, as well as major cable system operators (CSOs). My clients have included NCTA –

The Internet & Television Association, Disney/ABC, the Public Broadcasting Service (PBS),

CBS, A&E Television Networks, ESPN Networks, Discovery Networks, MTV Networks,

Scripps Networks, Time Warner Cable, Comcast/NBC Universal, Cox Communications, the

Cable & Telecommunications Association for Marketing (CTAM) and many other cable and satellite industry clients.

I submitted written direct and rebuttal testimony in the 2010-13 Phase I cable proceeding and was qualified in that proceeding as an expert in market research, including valuation in the cable, broadcast and television programming industries. I have also submitted testimony in several prior copyright proceedings. Appendix A to my written direct testimony sets forth my qualifications.

Written Direct Testimony of James M. Trautman | 1

II. Introduction and Summary

I understand that the purpose of this proceeding is to allocate the 2010-13 satellite royalty funds among four categories of broadcast television programming that satellite carriers retransmitted pursuant to the Section 119 compulsory license. The four program categories 1 (and the claimants associated with those categories) are:

• Joint Sports Claimants (“JSC”) - Live professional and college team sports

programming.

• Program Suppliers (“PS”) - Syndicated series, specials and movies.

• Commercial Television Claimants (“CTV”) 2 - News and other

programming produced by or for a commercial station, and broadcast only

by that station in the year in question.

• Devotional Claimants (“SDC”) - Syndicated programs of a primarily

religious theme.

The Section 119 compulsory license has been in effect since 1988. However, my understanding is that there have been no prior satellite Phase I/Allocation decisions. Rather, satellite royalty fund allocations have heretofore been resolved via settlements.

There is no statutory standard for the allocation of Section 119 royalties, just as there is no statutory standard for the allocation of Section 111 royalties. However, the Copyright

Royalty Judges (“the Judges”) have applied a “relative marketplace value” standard in previous

1 Appendix B lists the full program category descriptions as agreed upon by the parties and adopted in the Judges’ November 25, 2015 Notice of Participant Groups, Commencement of Voluntary Negotiation Period (Allocation), and Scheduling Order (14-CRB-0011-SD) (2010-13). 2 For sake of clarity, I note that “Broadcaster Claimants Group” is the name of the party in this proceeding that claims the programming in the “Commercial Television Claimants” category. In the 2010-13 cable proceeding, “Commercial Television Claimants” was both the name of the claimant category and the name of the party claiming the programming in that category.

Written Direct Testimony of James M. Trautman | 2

Phase II satellite proceedings, and have also used this standard in both Phase I and Phase II cable proceedings. In their Section 111 allocation for 2010-13, the Judges defined their task as “to construct a ‘hypothetical market’ that generates the relative values that would arise in an unregulated market.” 3

In the Section 111 cable proceeding for 2010-13, the Judges applied the above marketplace standard to allocate cable royalties among six eligible program categories (including the four categories at issue in this proceeding). Table 1 below shows the Judges’ relative allocations for each category within each of three Funds that exist under Section 111. 4

3 Final Allocation Determination, 14-CRB-0010-CD (2010-13), 84 Fed. Reg. 3552, 3555. As the D.C. Circuit has observed, “it makes perfect sense to compensate copyright owners by awarding them what they would have gotten relative to other owners absent a compulsory licensing scheme.” Program Suppliers v. Librarian of Congress , 409 F.3d 395, 401-02 (D.C. Cir. 2005). 4 The Judges’ allocations in the cable proceeding did not include shares for Music Claimants and National Public Radio (“NPR”), because the parties had agreed to settlements regarding those shares. The Judges’ allocations in this proceeding will also not include shares for Music Claimants and NPR, as Music Claimants settled their claims and NPR is not a party to this proceeding.

Written Direct Testimony of James M. Trautman | 3

Table 1. Section 111 Royalty Allocations by Program Category, 2010-13

Year Average: Fund/Program Category 2010 2011 2012 2013 2010-13 Basic Fund: Canadian Claimants 5.0% 5.0% 5.0% 5.5% 5.1% Commercial TV 16.8% 16.8% 16.2% 15.3% 16.3% Devotional Programs 4.0% 5.5% 5.5% 4.3% 4.8% Program Suppliers 26.5% 23.9% 21.5% 19.3% 22.8% Public TV 14.8% 18.6% 17.9% 19.5% 17.7% Sports 32.9% 30.2% 33.9% 36.1% 33.3% Total 100.0% 100.0% 100.0% 100.0% 100.0% 3.75 Fund: Canadian Claimants 5.9% 6.1% 6.1% 6.8% 6.2% Commercial TV 19.7% 20.6% 19.7% 19.0% 19.8% Devotional Programs 4.7% 6.8% 6.7% 5.3% 5.9% Program Suppliers 31.1% 29.4% 26.2% 24.0% 27.7% Public TV 0.0% 0.0% 0.0% 0.0% 0.0% Sports 38.6% 37.1% 41.3% 44.9% 40.5% Total 100.0% 100.0% 100.0% 100.0% 100.0% Syndex Fund: Program Suppliers 100.0% 100.0% 100.0% 100.0% 100.0%

Source: 84 Fed. Reg. 3552.

I believe that the Judges’ 2010-13 Section 111 cable royalty allocations provide the most appropriate benchmark 5 for allocating the 2010-13 satellite royalties. This is because satellite

5 The Judges regularly rely upon benchmark evidence in rate proceedings, and in the 2010-13 Cable Final Determination, the Judges explained the following regarding their assessment of such evidence: “When Judges decide whether and how to weigh such benchmark evidence, they begin with the following foundational analysis that is equally applicable here: In choosing a benchmark and determining how it should be adjusted, a rate court must determine [1] the degree of comparability of the negotiating parties to the parties contending in the rate proceeding, [2] the comparability of the rights in question, and [3] the similarity of the economic circumstances affecting the earlier negotiators and the current litigants, as well as [4] the degree to which the assertedly analogous market under examination reflects an adequate degree of competition to justify reliance on agreements that it has spawned.” Footnote continued on next page Written Direct Testimony of James M. Trautman | 4

carriers and cable system operators compete directly for subscribers utilizing similar programming and packaging strategies. As such, they value particular types of programming similarly. Moreover, as I discuss in greater detail below, the programming carried on broadcast signals subject to Section 119 and Section 111 royalties was similar. Indeed, a very large proportion of both royalty pools are attributable to the programming on a single station—WGN

America (“WGNA”).

While the Section 111 determination represents an important benchmark, an adjustment is necessary to account for differences between Section 119 and Section 111. Programming covered under the Section 119 license does not include programming on PTV or Canadian signals. This can be addressed by adjusting the allocation in the 2010-2013 Cable Final

Determination to account for the presence of only four program categories—JSC, CTV, SDC, and Program Suppliers—in this satellite allocation proceeding.

Footnote continued from previous page Final Allocation Determination, 14-CRB-0010-CD (2010-13), 84 Fed. Reg. 3552, 3602.

Written Direct Testimony of James M. Trautman | 5

Table 2. Adjusted Section 111 Royalty Allocations by Program Category, 2010-13*

Year Average: Fund/Program Category 2010 2011 2012 2013 2010-13 Basic Fund: Commercial TV 20.9% 22.0% 21.0% 20.4% 21.1% Devotional Programs 5.0% 7.2% 7.1% 5.7% 6.3% Program Suppliers 33.0% 31.3% 27.9% 25.7% 29.5% Sports 41.0% 39.5% 44.0% 48.1% 43.2% Total 100.0% 100.0% 100.0% 100.0% 100.0% 3.75 Fund: Commercial TV 20.9% 21.9% 21.0% 20.4% 21.1% Devotional Programs 5.0% 7.2% 7.1% 5.7% 6.3% Program Suppliers 33.0% 31.3% 27.9% 25.8% 29.5% Sports 41.0% 39.5% 44.0% 48.2% 43.2% Total 100.0% 100.0% 100.0% 100.0% 100.0% Syndex Fund: Program Suppliers 100.0% 100.0% 100.0% 100.0% 100.0%

*Category allocations adjusted by proportionately allocating PTV and Canadian royalties to Section 119 claimants. Note: Columns may not add to total due to rounding. Source: 84 Fed. Reg. 3552.

III. Similarity of the Section 111 and 119 Compulsory Licenses

While Section 111 and 119 apply to different distribution technologies, they both license the same basic right to retransmit distant broadcast signals. Sections 111 and 119 of the

Copyright Act of 1976 provide MVPDs with a statutory license to retransmit broadcast signals as specified in each Section. Section 111 addresses retransmission by “cable systems,” which are defined in the Section as facilities that make secondary transmissions of broadcast signals “by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service.” 6 Section 119 addresses “satellite carriers,” which it defines as

6 Section 111, subsection f(3).

Written Direct Testimony of James M. Trautman | 6

“an entity that uses the facilities of a satellite or satellite service … to establish and operate a channel of communications for point-to-multipoint distribution of television station signals.” 7

Sections 111 and 119 each further state that the term “subscribers” refers to “a person or entity that receives a secondary transmission service” (from a “cable system” or “satellite carrier,” respectively) and that “pays a fee for the service.” 8

There are additional similarities between the Section 119 license granted to satellite carriers and the Section 111 license granted to cable systems. These include:

• Covered stations. Both Section 119 and Section 111 grant MVPDs the right to

retransmit “distant” or “out of market” U.S. commercial broadcast television

stations. As discussed in more detail below, satellite carriers and cable systems

are not required to pay royalties for signals retransmitted within a station’s local

market area. However, both licenses require royalty payments associated with the

delivery of and/or the right to deliver broadcast signals outside of the signal’s

local market area.

• Retransmission requirements . Both licenses require retransmissions of broadcast

signals/streams to be delivered without alteration. In other words, satellite

carriers and cable systems that elect to retransmit broadcast signals must

retransmit them to their subscribers in their entirety, and cannot substitute either

programming or advertising contained on those signals. As a result, neither cable

nor satellite MVPDs can earn revenue from the sale of advertising on distantly

7 Section 119, subsection (d)(6). 8 Section 111, subsection (f)(13); Section 119, subsection (d)(8).

Written Direct Testimony of James M. Trautman | 7

retransmitted signals. Rather, cable and satellite MVPDs retransmit distant

signals as part of their effort to acquire and retain customers. 9

• Multicast streams. Both licenses have been adapted to address the conversion of

television broadcast stations to digital transmission facilities, which culminated in

2009. Specifically, the Satellite Television Extension and Localism Act of 2010

(STELA) amended both licenses to include digital “multicasting.” Multicasting

refers to the transmission of multiple streams of digital television programming

by a single broadcast station. Multicast digital streams typically include the

station’s primary (previously analog) signal, along with additional programming

streams that often emphasize specific content genres and/or focus more narrowly

on appealing to certain demographic segments. In some cases (usually in small

markets), stations use multicasting to deliver programming streams from more

than one major network. With limited exceptions (primarily affecting non-

commercial multicast streams), retransmission of non-simulcast multicast streams

under Sections 119 and 111 is treated similarly to primary signals/streams –

including for the purpose of calculating the copyright royalty obligations of both

cable systems and satellite carriers.

9 As noted above, “relative marketplace value” has formed the basis for royalty allocations in Phase I and Phase II cable proceedings and Phase II satellite proceedings. Moreover, the fact that neither satellite carriers nor cable systems can sell advertising in retransmitted signals has proven significant in terms of evaluating the characteristics of the hypothetical market in which relative value is assessed. Specifically, in their 2010-13 cable determination, the Judges cited the lack of an advertising opportunity in rejecting viewing studies as a measure of value – and instead focusing on analyses that undertook to measure value in attracting and retaining subscribers. Final Allocation Determination, 14-CRB-0010-CD (2010-13), 84 Fed. Reg. 3552, 3599, 3610.

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• FCC Requirements . Under both licenses, MVPDs must retransmit signals subject

to compliance with FCC rules and requirements.

One difference between Sections 119 and 111 is that network programming on ABC,

CBS, and NBC is compensable under Section 119 but not under Section 111. 10 I address network programming in further detail in Section IX below. Additionally, whereas royalty fees under Section 111 are calculated based on gross receipts and include a minimum fee, Section 119 requires satellite carriers to pay only for the out-of-market signals they actually carry, with the amount calculated based on a uniform per subscriber fee. The difference in methodologies for calculating royalties does not lessen the value of the 2010-13 Cable Final Determination as a benchmark for allocating 2010-13 satellite royalties.

In summary, the licenses granted by Section 111 and Section 119 are very similar in relevant respects for the purpose of considering the Judges’ determination in the 2010-13 cable proceeding as a benchmark for the 2010-13 satellite allocation.

IV. Similarities of Satellite Carriers and Cable Systems

The relevant satellite carriers in this proceeding are DirecTV and DISH Network. While a few other satellite MVPDs also retransmitted distant signals in certain years, only DirecTV and

DISH Network paid Section 119 royalties in all four years (see Table 3 below), and DirecTV and

10 Because of this distinction, I use the term “network” throughout this testimony to refer only to the cable definition of network, i.e. only ABC, CBS, and NBC. I recognize that there are additional stations that counted as “network” under section 119 (e.g., FOX), but they did not count as “network” under 111 and therefore all the programming on those stations would have been included in the Judges’ 2010-13 cable valuation. In addition, under Section 119, network stations can only be re-transmitted on a distant basis to “unserved households.” Section 119, subsections a(2)(B), d(10). These are households that cannot receive an adequate (based on certain technical determinations) over-the-air signal of a station affiliated with a network (as defined for purposes of Section 119).

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DISH Network accounted for over 99% of the total 2010-13 Section 119 royalties (see Figure 1 below). 11

Table 3. Section 119 Royalties by Satellite Carrier, 2010-13

2010 2011 2012 2013 2010-13 Total DirecTV $57,794,250 $55,602,080 $55,428,200 $54,022,614 $222,847,143 DISH Network $36,657,663 $37,644,811 $31,962,427 $31,262,742 $137,527,643 National Programming Service$1,258,420 NA NA NA $1,258,420 Satellite Receivers $24,860 NA NA NA $24,860 Distant Networks NA $781,537 $638,013 $550,974 $1,970,525

Total $95,735,192 $94,028,428 $88,028,640 $85,836,330 $363,628,589

Source: CDC

Figure 1. Annual Satellite Royalties and Percent of Total by Distributor, 2010-13

$70,000,000 60% 63% $60,000,000 59%I 63% $50,000,000 40% $40,000,000 38% 36% $30,000,000 1116% $20,000,000

$10,000,000 1%0%0%0% 0%0%0%0% 0%1%1%1% $0 DirecTV DISH Network National Satellite Distant Networks Programming Receivers Service

•2010 •2011 •2012 •2013

Similarly, the bulk of Section 111 royalties in 2010-13 were attributable to cable systems owned by large cable multiple systems operators (MSOs) such as Comcast, Time Warner Cable,

11 I understand that CDC revised its satellite carriage data the day prior to the filing of this testimony. I intend to review CDC’s revisions to its data and will update my testimony if I believe it is necessary to do so.

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Charter Communications and Cox Communications, as well as telecommunications giants

Verizon Communications (FiOS TV) and AT&T (U-verse TV). 12 From 2010-13, these six companies accounted for 80-85% of the total royalties attributable to cable systems that carried any distant signals. 13

While satellite companies use different distribution technology than cable carriers, they have similar business models, compete for the same customers using similar programming, and ultimately value particular types of programming similarly. Cable systems and satellite carriers are both subscription-based services that seek to attract and retain subscribers to the programming services (including the broadcast television stations) that they offer. Because the major satellite carriers offer service on a nationwide basis and overlap with the coverage areas of individual cable systems, these two types of entities compete directly against each other in their efforts to attract and retain subscribers.

Cable and satellite MVPDs both occupy the same role in the hypothetical marketplace used to determine relative market value. Both are the buyers in the hypothetical marketplace, purchasing the right to retransmit signals from the same sellers, the broadcast stations that obtain and assemble the programming at issue.14

12 AT&T acquired DirecTV in 2015. The combined entity has continued to offer both U-verse and DirecTV services, but has begun migrating customers from the U-verse platform to DirecTV. Charter Communications acquired Time Warner Cable in 2016, forming Spectrum. 13 Bortz Media analysis of 2010-13 CDC data. 14 See Final Allocation Determination, 14-CRB-0010-CD (2010-13), 84 Fed. Reg. 3552, 3555.

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V. Similarity of Signals Retransmitted Pursuant to the Section 111 and 119 Licenses

The following discussion identifies the signals carried pursuant to the Section 119 and

111 licenses and reviews the similarity of that carriage across several key metrics. 15 Notably,

WGNA was the dominant signal under both licenses and accounted for the vast majority of subscriber instances and royalties.

Subscriber instances . In cable proceedings, the Judges and their predecessors have considered the aggregate number of subscribers that received each signal type as an indicator of the relative reach of the programming on those signals. 16 Table 4 and Figure 2 below compare

Section 119 and Section 111 subscriber instances from 2010-13:

Table 4. Out-of-Market/Distant Signal Subscriber Instances by Signal Type. 2010-13

2010-13 Percent 2010 2011 2012 2013 Total of Total Satellite: WGNA 261,557,589 261,303,323 258,026,539 244,838,164 1,025,725,615 73.2% Other U.S. Signals 77,749,785 76,823,293 45,232,255 41,137,791 240,943,124 17.2% Network Affiliates (ABC, CBS, NBC) 40,696,444 34,685,718 31,505,996 28,322,692 135,210,850 9.6% Subtotal 380,003,818 372,812,334 334,764,790 314,298,647 1,401,879,589

Cable: WGNA 41,449,963 43,211,151 42,478,438 42,531,593 169,671,145 73.4% Oilier U.S. Signals 9,121,535 8,599,545 7,818,713 6,606,341 32,146,135 13.9% Network Affiliates (ABC, CBS, NBC) 8,150,072 7,784,337 7,832,723 5,488,008 29,255,141 12.7% Subtotal* 58,721,571 59,595,033 58,129,874 54,625,943 231,072,421

*Excludes PTV and Canadian Signals

15 Appendix C contains a table identifying all Section 119 signals carried, as well as the subscribers reached by and royalties attributable to each signal. 16 See, e.g. , Final Allocation Determination, 14-CRB-0010-CD (2010-13), 84 Fed. Reg. 3552, 3602.

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Figure 2. Distribution of Out-of-Market/Distant Signal Subscriber Instances, 2010-13

Cable Satellite

9.6%

12.7% •13.9% e17.2% 73.4% 73.2%

WGNA WGNA Other U.S. Signals Other U.S. Signals Network Affiliates (ABC, CBS, NBC) Network Affiliates (ABC, CBS, NBC)

As reflected in these figures, WGNA was the dominant signal from 2010-13 among both satellite carriers and cable systems, and the overall distribution of signals carried under the two licenses was very similar in terms of subscriber instances. Satellite carriers provided proportionately more non-network stations and somewhat fewer network signals.

Fees generated . Another metric that the Judges have considered in cable distribution proceedings is the amount of fees generated by different signal types. 17 Because Section 111 includes a minimum fee 18 and has a fee structure that varies based on the type and number of distant signals carried, the fees generated by each particular signal must be estimated. 19 Under

17 See Final Allocation Determination, 14-CRB-0010-CD (2010-13), 84 Fed. Reg. 3557, 3558, 3602. 18 It should be noted that, notwithstanding the Section 111 minimum fee issue, the Judges determined that CSOs’ decisions about which distant signals to re-transmit under Section 111 are relevant. Final Allocation Determination, 14-CRB-0010-CD (2010-13), 84 Fed. Reg. 3552, 3569. 19 Cable Data Corporation (CDC) develops estimates of fees generated under Section 111 by each distant signal on each cable system. That is, the total royalty fees paid by each cable system are proportionately allocated to each distant signal carried by that cable system, based on the distant subscribers reached by that signal and its Section 111-assigned DSE value.

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Section 119, however, MVPDs pay royalties only for signals actually carried, and MVPDs pay the same per subscriber fee regardless of the nature of the signal carried. The precise amount of fees paid for each signal under Section 119 can therefore be directly calculated.

WGNA was responsible for generating the substantial majority of royalties paid pursuant to both Section 119 and Section 111 during 2010-13. WGNA accounted for nearly three- quarters of the total royalties paid by satellite carriers from 2010-13—i.e., satellite carriers paid more than $267 million, or more than 73% of their total Section 119 royalties, for the right to retransmit WGNA. Table 5 below shows Section 119 royalties by station type from 2010-13:

Table 5. Section 119 Royalties by Station Type, 2010-13

2010-13 2010 2011 2012 2013 Total Royalties: WGNA $66,048,228 $66,059,442 $68,041,818 $67,050,270 $267,199,758 Other U.S. Signals $19,499,041 $19,297,556 $11,795,263 $11,138,934 $61,730,794 Network Affiliates (ABC, CBS, NBC) $10,174,111 $8,671,430 $8,191,559 $7,647,127 $34,684,226 PBS $13,811 NA NA NA $13,811 Total $95,735,192 $94,028,428 $88,028,640 $85,836,330 $363,628,589

Percent of Royalties: WGNA 69.0% 70.3% 77.3% 78.1% 73.5% Other U.S. Signals 20.4% 20.5% 13.4% 13.0% 17.0% Network Affiliates (ABC, CBS, NBC) 10.6% 9.2% 9.3% 8.9% 9.5% PBS 0.0% NA NA NA NA Total 100.0% 100.0% 100.0% 100.0% 100.0% Source: CDC

As shown in Figure 3 below, WGNA played a similarly significant role in generating royalties paid pursuant to Section 111 during 2010-13. Specifically, WGNA was responsible for approximately 81% of fees generated pursuant to Section 111 during 2010-13 (excluding PTV,

Canadian, and Mexican signals). For both Section 119 and Section 111, WGNA was the predominant driver of royalties.

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Figure 3. Distribution of Section 111 and Section 119 Royalties, 2010-13 20

Section 111 (Cable) SectionSection 119119 (Satellite)(Satellite)

4.6% WGNA

Other U.S. Signals9.5% 14.0% Network Affiliates (ABC, CBS, NBC) 4) 17.0% e9.5% 73.5% 81.4%

17.0%

73.5% WGNA WGNA Other U.S. Signals Other U.S. Signals Network Affiliates (ABC, CBS, NBC) Network Affiliates (ABC, CBS, NBC)

As discussed above, the overall distribution of signals carried under the two licenses was very similar in terms of subscriber instances, suggesting that the differences in the relative amount of royalties attributable to the particular signal types are a function of the difference in the Section 111 and 119 royalty rate structures.

Unique signals . During 2010-13, the majority of the unique signals retransmitted under

Section 119 were also retransmitted under Section 111. Each year, signals that were retransmitted under both Section 119 and Section 111 accounted for 95%-98% of annual Section

119 royalties. Although cable systems retransmitted a larger total number of unique signals, many of those signals were PTV 21 , Canadian, and Mexican signals that were not covered under

20 WGNA’s 73.5% share of Section 119 royalties (Figure 2) is slightly higher than its 73.2% share of Section 119 DSI (Figure 3) because commercial subscribers pay at a higher rate and WGNA accounts for nearly all of the commercial subscribers and royalties. 21 In lieu of offering the signals of out-of-market PTV stations under Section 119, satellite carriers DirecTV and DISH Network negotiated agreements with PBS and the Association of Public TV Stations (APTS) through which they provide a PBS national service (PBSNET) that is available only to satellite subscribers in unserved areas. “Public Television Announces Agreement with DIRECTV, Inc. for Expansion and Continuation of Service on DIRECTV,” PBS press release, December 19, 2001. Prior to STELA’s enactment and the resulting agreement between PTV and the satellite carriers that implemented nationwide local-into-local PTV station carriage, there was very limited Section 119 carriage of PTV out-of-market signals in the early part of 2010 by satellite carriers other than DirecTV and DISH. DISH Network also Footnote continued on next page Written Direct Testimony of James M. Trautman | 15

Section 119. Each year, signals retransmitted under Section 119 also accounted for 84-88% of the royalty fees generated under Section 111 (excluding PTV, Canadian, and Mexican signals).

Similarly, signals retransmitted under both Sections 119 and 111 accounted for 95-98% of the

Section 119 distant subscriber instances and 79-83% of the Section 111 distant subscriber instances.

Summary and Key Conclusions . The signals carried pursuant to Section 119 and Section

111 are very similar. WGNA is the dominant signal carried under both Section 119 and 111, reflecting its value to both satellite carriers and their cable competitors. As indicated above, the

Section 119 royalty structure requires satellite carriers to pay only for the out-of-market signals they actually carry, with the amount calculated based on a uniform per subscriber fee. As such,

Section 119 permits a more precise measure of the fees generated from specific signals.

VI. WGNA Programming

In light of WGNA’s dominance in the distant signal marketplace, it is particularly important to consider the compensable programming on WGNA when evaluating how Section

119 royalties should be allocated among the four programming categories at issue.

The programming provided on WGNA is unique among Section 119 out-of-market signals. As I explained in a report submitted in the 2010-13 cable proceeding, during 2010-13

WGN was delivered as both a local over-the-air broadcast signal serving the Chicago television market (WGN Chicago) and as the “superstation” signal WGN America (WGNA). 22 All satellite

Footnote continued from previous page carried XETV for four accounting periods. This signal is licensed to Tijuana, Mexico but broadcasted primarily in English from 2010-13, carrying U.S. programming from the CW network. 22 See JSC Ex. 7, Bortz Report at p. 27.

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carriers providing WGN as an out-of-market signal in 2010-13 provided WGNA to their subscribers. However, only the WGNA programming that aired simultaneously on both WGNA and WGN Chicago is compensable for copyright purposes.

As shown below on Table 6, only about 15% of WGNA’s programming from 2010-13 is compensable. In large measure, this is because between 92 and 98% of the Program Suppliers’ programming on WGNA in 2010-13 is non-compensable. In addition, roughly 90% of the

Devotional content on the signal is not compensable. By contrast, all of the JSC and CTV programming on WGNA aired on WGN Chicago as well and is therefore compensable.

Table 6. Proportion and Distribution of Compensable Programming on WGNA, 2010-13 2010-13 Category 2010 2011 2012 2013 Total Compensable Proportion of Total WGNA Programming Hours 18.1% 14.8% 13.3% 14.4% 15.1%

Distribution of Compensable Programming Hours by Claimant: CTV 38.9% 48.3% 54.0% 48.2% 47.4% JSC 21.9% 26.4% 32.4% 29.8% 27.6% Program Suppliers 35.1% 21.3% 10.9% 19.1% 21.6% Devotionals 4.1% 4.1% 2.7% 2.8% 3.4%

Total 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Bortz Media analysis of TMS/Gracenote and Nielsen programming data for WGN Chicago and WGNA.

In short, Table 6 above and Figure 4 below show that JSC accounted for over a quarter of the compensable programming hours on WGNA from 2010-13.

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Figure 4. Average Distribution of WGNA Compensable Programming by Claimant, 2010-13

3.4%

21.6%

47.4%

27.6%

2010-13

CTV JSC PS Devo. Source: Bortz Media analysis of TMS/Gracenote and Nielsen data.

However, this simple “volume” metric does not provide a complete understanding of the nature of the compensable programming on WGNA in these years or its relative value. Also important is the value of the content in each program category. Table 7 below shows the nature of the compensable programming on WGNA during 2010-13 for each claimant group.

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Table 7. WGN America Programming Volume Summary, 2010-13 Number of Programming Hours by Year Total: Category/Program 2010 2011 2012 2013 2010-13 News and Other Station-Produced Programs WGN PRIME NEWS/NEWS AT NINE 291 306 309 284 1,190 WGN MIDDAY NEWS 252 255 250 252 1,008 CUBS, WHITE SOX AND BULLS PRE- AND POST-GAME SHOWS AND SPECIALS 27 14 20 28 90 INSTANT REPLAY 13 15 16 15 59 PEOPLE TO PEOPLE 13 14 13 13 51 ADELANTE 11 13 12 12 48 ONE-TIME ONLY SPECIALS AND SPECIAL REPORTS 10 10 9 6 35 SUBTOTAL 615 627 629 610 2,480 Live Professional Team Sports CUBS BASEBALL 210 215 231 244 899 WHITE SOX BASEBALL 96 96 100 96 389 BULLS BASKETBALL 41 31 45 38 155 SUBTOTAL 347 342 376 377 1,443 Movies, Syndicated Shows, Series and Specials PAID PROGRAMMING 326 184 40 110 658 30 ROCK NA 31 74 124 229 MOVIES 117 49 10 8 183 LEGEND OF THE SEEKER 85 NA NA NA 85 JERRY LEWIS MDA TELETHON 18 7 3 NA 28 ONE-TIME ONLY SPECIALS AND OTHER SYNDICATED PROGRAMS 10 6 NA NA 16 - SUBTOTAL 555 276 126 242 1,199 Devotional Programs TOMORROW'S WORLD 26 26 26 26 103 DR. JAMES SCUDDER 15 27 6 NA 48 PASTOR BILL WINSTON 13 NA NA NA 13 INSPIRATION TODAY CAMP MEETING 12 NA NA NA 12 DISCOVER THE TRUTH NA NA NA 11 11 SUBTOTAL 65 53 32 36 186

TOTAL 1,582 1,298 1,163 1,265 5,307 Source: Bortz Media analysis of TMS/Gracenote and Nielsen programming data for WGNA and WGN Chicago.

The nature of the compensable content on WGNA during 2010-13 is highly relevant to determining relative market value for the following reasons:

• First, the JSC programming on WGNA consisted entirely of live and exclusive

telecasts of Major League Baseball and National Basketball Association games

shown in prime time and/or valuable weekend time slots. Table 8 shows the JSC

telecasts by year on WGNA. This JSC programming was highly valuable to both

satellite and cable carriers. JSC programming attracts passionate fans, is live and

thus less susceptible to time shifting, and is typically not available elsewhere. All

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of these factors are important to MVPDs in their efforts to attract and retain

subscribers. 23

Table 8. JSC Telecasts on WGNA, 2010-2013 2010 2011 2012 2013 Cubs 68 66 71 72 White Sox 33 31 32 29 Bulls 16 12 18 15 TOTAL 117 109 121 116

Source: Bortz Media & Sports Group, Inc. analysis of TMS/Gracenote and Nielsen data.

• Second, over half of the compensable PS content on WGNA consisted of paid

programming (i.e., infomercials). Infomercials have no value to MVPDs, which

would eliminate infomercials from the signal if they were permitted to do so.24

Moreover, the sitcom reruns on WGNA were generally available on a number of

other stations, as well as from other sources such as Netflix and Hulu. For

example, during the time period at issue, WGNA carried reruns of 30 Rock . New

episodes of 30 Rock also were available on NBC, and reruns were available on

Comedy Central, Netflix and broadcast stations around the country. For example,

in 2013 11 of the Section 119 signals exhibited reruns of the series in addition to

WGNA. 25 This general entertainment programming thus was not central to

acquiring and retaining subscribers and of much less value to satellite MVPDs. 26

23 See Hartman WDT at ¶¶ 8, 13; Shull WDT at ¶¶ 9, 22. 24 See Hartman WDT at ¶ 17; Shull WDT at ¶ 28. 25 Gracenote categorized sample. 26 See Hartman WDT at ¶ 17; Shull WDT at ¶ 29.

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In addition, the compensable movies carried by WGNA were overwhelmingly

shown between the hours of 1:00AM and 5:00AM, suggesting that they too were

of very limited value.

• Third, compensable Devotional content on WGNA consisted almost entirely of

programs shown between 5:00AM and 6:00AM on Sundays, and also represented

paid programming (i.e., WGNA was paid to carry the programs). Finally,

Tomorrow’s World was available on other broadcast stations throughout the U.S.,

and the remaining compensable Devotional programs on WGNA were also shown

on other broadcast stations and/or devotional-centered cable networks.

Based on these factors, it is reasonable to conclude that the majority of royalties attributable to WGNA should be awarded to JSC. The JSC programming comprised a large percentage of the volume of compensable programming on WGNA, and there is strong evidence that its value represents a multiple of that volume due to both its characteristics and actual marketplace results.

VII. Relative Volumes of Program Categories

The relative volumes of the various programming categories carried under Section 111

and Section 119 was also similar. In order to make that assessment, I have reviewed an analysis

of programming volumes prepared by William E. Wecker Associates, Inc. (Wecker). 27 The

Wecker analysis examined the amounts of compensable programming by category on each out- of-market station distributed by satellite carriers from 2010-13, and considered those amounts in the context of the number of subscribers that received each signal. In my opinion, this approach

27 Wecker and Harvey WDT.

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is the most accurate way to measure volume since the result is an estimate of the relative

proportion of “subscriber minutes” of programming actually received by subscribers in the

Section 119 marketplace. Specifically, it appropriately reflects that compensable programming

on WGNA (for example) should receive added weight, since this programming is received by a

far greater number of Section 119 subscribers than programming on any other out-of-market

signal.

In addition to determining the relative proportion of subscriber minutes by programming type in the Section 119 marketplace, Wecker also reviewed the programming volumes used in the regression studies presented in the Section 111 proceedings. Table 9 below provides a comparison of programming volumes by type in the Section 111 and Section 119 marketplace.

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Table 9. Comparison of Relative Programming Volume by Claimant Category, 2010-13

Year/Category Satellite Cable 2010 Commercial Television 23.27% 23.86% Devotionals 1.74% 5.19% Program Suppliers 67.72% 62.18% JSC 7.27% 8.77% 2011 Commercial Television 24.18% 27.59% Devotionals 1.69% 4.04% Program Suppliers 65.92% 59.23% JSC 8.21% 9.14% 2012 Commercial Television 29.71% 29.26% Devotionals 1.52% 3.19% Program Suppliers 57.46% 56.56% JSC 11.32% 10.99% 2013 Commercial Television 28.66% 29.66% Devotionals 1.51% 3.04% Program Suppliers 56.85% 54.56% JSC 12.99% 12.74% 2010-13 Commercial Television 25.93% 27.32% Devotionals 1.63% 4.03% Program Suppliers 62.92% 58.32% JSC 9.52% 10.33%

Source: Wecker and Harvey WDT at 10.

Subscriber minutes of the programming types at issue in the Section 119 marketplace are proportionately very similar to those evident in the Section 111 marketplace. This is not surprising given the substantial role played by WGNA in both markets. Moreover, it provides further support for the use of the Judges’ Section 111 determination as a benchmark for the

Section 119 awards.

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Subscriber minutes data can also be combined with the Section 111 determination to assess the relative values assigned to each programming type on a per minute basis. Table 10 below shows these per minute ratios using the Section 111 distant subscriber minutes as estimated by Dr. Crawford (on behalf of CTV).

Table 10. Ratio of Judges’ 2010-13 Cable Allocations to Volume

Agreed Category 2010 2011 2012 2013 Canadian Claimants 0.83 0.81 0.71 0.72 Commercial Television 1.14 1.07 0.98 0.98 Devotionals 1.25 2.39 3.06 2.69 Program Suppliers 0.69 0.71 0.67 0.67 Public Television 0.46 0.5 0.49 0.49 JSC 6.09 5.81 5.47 5.39

Source: Wecker and Harvey WDT at 6.

These data show that the Judges’ Section 111 determination attributed a far higher per minute value to JSC programming than to any other category.

The differences in per minute value evident in the Judges’ determination are also

supported by actual marketplace data submitted in the Section 111 proceedings – which illustrate

the high relative value placed on JSC programming by cable networks. As shown in Table 11

below, basic cable networks spent 27 to 40 times more per hour (and ten to 14 times more per

viewing hour) on JSC programming in 2010-13 than they did on non-JSC programming.

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Table 11. Cable Content Analysis, 2010-13

Total Total Programming Expenditures Expenditures Programming HHVH Expenditures Per Hour Per Viewing Hour Category Hours [A] (000s)[B] (Millions)[C] [D]=[C]/[A] [E]=[C]/[B] Top 25 Networks: JSC 9,274 15,164,369 $12,525 $1,350,518 $0.826 Non-JSC 866,726 496,492,970 $42,702 $49,268 $0.086 JSC/Non-JSC 0.01 0.03 0.29 27.41 9.60 JSC % of Total 1.06% 2.96% 22.68%

TBS: JSC 684 1,220,723 1,031 $1,507,310 $0.845 Non-JSC 34,356 20,880,757 1,291 $37,583 $0.062 JSC/Non-JSC 0.02 0.06 0.80 40.11 13.66 JSC % of Total 1.95% 5.52% 44.40%

TNT: JSC 977 2,513,282 2,042 $2,090,072 $0.812 Non-JSC 34,063 29,162,878 2,450 $71,931 $0.084 JSC/Non-JSC 0.03 0.09 0.83 29.06 9.67 JSC % of Total 2.79% 7.93% 45.46%

Source: WDT of Dr. Mark A. Israel at 26, 28.

VIII. Programming on Non-Network Stations other than WGNA

As shown above on Tables 4 and 5, WGNA was the predominant signal retransmitted pursuant to Section 119 during 2010-2013. It accounted for both 73% of subscriber instances and 73% of fees generated. Non-network stations other than WGNA accounted for an additional

17% (or approximately $62 million) of total Section 119 royalties from 2010-13. These types of other non-network stations were valued by the Judges in the 2010-13 Final Determination as they are compensable under Section 111 as well as under Section 119.

Of the non-WGNA non-network programming that comprised 17% of fees generated under Section 119, approximately 70% of these fees (approximately $44 million in royalties)

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were paid to retransmit stations affiliated with the CW network. 28 By far the largest of the CW

network affiliated stations under Section 119 (accounting for nearly $17 million in royalties) was

New York’s WPIX. WPIX carried telecasts of the MLB’s New York Mets throughout the 2010-

13 period (25 games annually over the four year period). Another widely carried CW station,

WDCW, carried 20 telecasts of the Washington Nationals MLB club each year from 2010-12.

Stations affiliated with the FOX network accounted for most of the remaining Section

119 “non-network” station royalties (more than $11 million). The FOX network carried over

340 JSC live telecasts from 2010-13 (or more than 1,000 hours of programming), including NFL

regular season and post-season telecasts including the 2011 Super Bowl, MLB regular season

and post-season telecasts including the World Series in each of 2010-13, and NCAA football

telecasts.29 Retransmitted FOX signals also included the FOX primetime network lineup. All

FOX affiliates carried pursuant to Section 119 also have local news operations.

In sum, after WGNA, other non-network programming was the largest generator of royalties paid pursuant to Section 119 during 2010-13. This programming was valued in the

2010-13 Final Determination. This programming served the same purposes and was of equivalent value to satellite MVPDs as it was to cable MVPDs.

IX. Programming on Network Stations

Stations affiliated with the ABC, CBS, and NBC networks make up the balance of the

Section 119 royalty pool, collectively accounting for nearly $35 million, or just under 10%, of

28 In 2010-13, the CW network was a partnership of Time Warner and CBS that developed and provided programming to local affiliate stations nationwide. Like other stations with network affiliations, CW affiliates carried a mix of programming provided by the network, along with local programming and programming acquired in the syndication market. 29 Bortz Media analysis of published media reports.

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2010-13 royalties. Approximately half of the volume of that programming consisted of network

programming. 30 Whereas the non-network programming carried by these network affiliates was

compensable under Section 111 as well as Section 119, the network programming was not

compensable under Section 111.

The network programming retransmitted pursuant to Section 119 is represented by only

two claimants, PS and JSC. JSC network content on ABC, CBS and NBC stations included

NBA regular season and postseason telecasts, regular season and postseason NFL Football,

regular season and postseason NHL hockey, and NCAA football and basketball. 31 For example,

during 2010-13, three of the four Super Bowl telecasts were on CBS or NBC. NBC carried

“Sunday Night Football,” and CBS carried regular season Sunday afternoon NFL football. CBS

also carried the NCAA basketball playoffs (“March Madness”), and ABC carried the NBA

finals.

Program Suppliers’ programming included the bulk of the primetime schedule, network

morning programming such as The Today Show , daytime programming such as the General

Hospital soap opera and certain game shows, national news telecasts, late night talk shows such

as The Tonight Show with Jimmy Fallon , and certain non-team sports programs such as PGA

Tour golf.

Marketplace data demonstrate that the JSC network programming pursuant to Section

119 is some of the most premium team sports programming available, and thus has even higher

30 Wecker and Harvey WDT at App. C. 31 Appendix D contains a table summarizing the JSC network programming retransmitted pursuant to Section 119. Appendix E provides a list of all JSC network programs retransmitted from 2010-13.

Written Direct Testimony of James M. Trautman | 27

value to MVPDs than the non-network JSC programming. Rights agreements in effect for this

programming from 2010-13 include the following:

• The NFL’s reported $9.8 billion programming rights agreements with CBS and

NBC, involving aggregate average annual rights fees of $1.22 billion over the

2006-13 period. 32

• Disney’s reported $3.9 billion agreement with the NBA to distribute telecasts on

ABC and ESPN, with annual fees averaging $485 million from the 2008-09

through 2015-16 seasons. 33

• CBS/Turner’s reported $10.8 billion NCAA Basketball Tournament contract

covering 2011-24 and including rights fees averaging $771 million per year. 34

• Multiple Disney agreements to distribute NCAA football telecasts on ABC and

ESPN beginning in 2012, with a reported aggregate value of at least $8 billion. 35

X. Similarity of Economic Circumstances

The economic circumstances that satellite carriers and CSOs faced in 2010-13 were very

similar. Both types of companies competed for the same customers in a mature market with a

32 “NFL Hammers Out Nine-Year Rights Renewals With NBC, CBS, FOX,” Adweek, December 14, 2011. 33 Bortz Media estimate based on “NBA’s $7.4 Billion TV Deals Boosted by New Media,” Reuters, June 28, 2007. Fees include rights to distribute games on both ABC and the ESPN cable networks. 34 “CBS, Turner to Share NCAA Basketball,” CNN Money, April 22, 2010 (https://money.cnn.com/2010/04/22/news/companies/ncaa_basketball_cbs_turner/index.htm?pos tversion=2010042216#). Fees include rights to distribute games on both CBS and cable networks owned by Turner Broadcasting. 35 “With New Swagger, ACC Moves Ahead on Network,” Sports Business Journal, May 6, 2013 (www.sportsbusinessdaily.com/Journal/Issues/2013/05/06/Media/ACC-network.aspx). Fees include rights to distribute games on both ABC and the ESPN cable networks.

Written Direct Testimony of James M. Trautman | 28

limited pool of potential new subscribers. CSOs and satellite carriers also both faced rising programming costs and had to balance carefully the costs and benefits of the programming they carried. Satellite carriers and CSOs also could not earn revenue from advertising on distant signals, and they valued the programming on those signals based on its ability to attract or retain subscribers.

XI. Conclusion

Satellite carriers and CSOs value television programming similarly because they share similar business models and compete head-to-head for subscribers using similar types of programming. Moreover, the programming retransmitted under Section 119 was highly comparable to the programming carried under Section 111. The Judges’ 2010-13 Section 111 cable royalty allocations therefore provide the most appropriate benchmark for allocating the

2010-13 satellite royalties, subject to an adjustment to account for the absence of Public

Television and Canadian signals under Section 119.

Written Direct Testimony of James M. Trautman | 29

I declare under penalty of perjury that the foregoing is true and correct.

ames M. Trautman Date

APPENDIX A.

JAMES M. TRAUTMAN Bortz Media & Sports Group, Inc. Managing Director and Principal 4600 S. Syracuse St., Suite 900 Denver, Colorado 80237 303-893-9903 (Direct) [email protected] ______

EXPERIENCE:

Managing Director and Principal, Bortz Media & Sports Group, Inc. (1988 to Present)

ß Leads media/entertainment practice for analytically-based consulting firm.

ß Expertise is concentrated in applied market, economic and competitive analysis – focusing on evaluation of trends in media/entertainment market evolution; analysis of the cable and satellite television industries; analysis and valuation of video programming and programming networks; analysis of consumer preferences and audience behavior; analysis of industry, company and product/service economics; market forecasting/demand assessment; and survey research.

ß Extensive consulting history for a wide range of major clients including A&E Television Networks, Blackstone Group, CBS, Comcast, Corporation for Public Broadcasting, Cox Communications, Discovery Communications, Disney/ABC, ESPN Networks, Gannett, Landmark Communications, MTV Networks, Ziff-Davis, Times Mirror, Time Warner, Tribune, The Washington Post Company, Major League Baseball, the National Basketball Association, NCTA -- The Internet & Television Association, the Big 12 Conference, Crown Media, Scripps Networks, National Public Radio, Public Broadcasting Service (PBS), Spanish Broadcasting System (SBS) and the United States Olympic Committee (USOC).

Additional details on primary areas of expertise include:

ß Created and directed Bortz Media’s subscription television industry competitive assessment practice for more than 15 years. Services provided to major cable companies included ongoing, comprehensive analysis of satellite and other competitors -- addressing business strategies, operating economics, technical capabilities/constraints and the overall threat profile presented by DIRECTV, DISH Network and other cable competitors. In connection with these engagements, monitored and assessed performance and growth trends, and developed market level strategic and tactical plans for cable operators to address satellite competition. These analytical and planning efforts emphasized competitor economics and consumer marketing strategies, as well as the development/deployment of new consumer

Written Direct Testimony of James M. Trautman | A-1

products and technologies including digital settop boxes, DVRs, video-on-demand, HDTV, interactive television, high-speed Internet and telephone service.

ß The economics and marketing of competitive services and new television products has been an ongoing focus. Examples of new product-related assignments include:

V For multiple clients, assessed the initial evolution of and long-term market prospects for Direct Broadcast Satellite services, including specific evaluation of various orbital licensees and early entrants.

V For Cox, provided a comprehensive assessment of current and likely future satellite competitor technology and marketing/promotional initiatives as a basis for devising Cox product, packaging and marketing strategies.

V For multiple clients, assessment of Internet-based video content distribution prospects, considering both economic opportunities and potential risks to existing distributors. Analyses have specifically addressed Internet-based delivery of movies and other television programming and its implications for cable networks and video-on-demand services.

V Designed and managed consumer research and provided recommendations to Comcast regarding the composition, packaging and pricing of the company’s initial digital service tiers in preparation for the deployment of digital settop boxes.

V For a major content owner, evaluates media market trends and implications on an ongoing basis. The implications of Internet video distribution, tiering, channel placement and ownership of the organization’s network distribution outlets has been a specific focus. Mobile distribution opportunities and economics, on-demand economics and interactive advertising prospects have also been assessed.

V Assessment of the relative merits of cable HFC distribution infrastructure and telephone company fiber optic network architecture from a consumer perspective, emphasizing the relative advantages and disadvantages of each technical approach in terms of services and features provided to subscribers. Based on this assessment, developed detailed recommendations regarding client positioning and communications strategies in response to telephone company marketing initiatives.

V For Cox, analyzed HDTV opportunities and timing considerations with respect to initial deployment of HDTV services.

V Assessment of home video rental market trends and prospects in the context of the evolution of cable-based video-on-demand services.

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V Assessment of the premium television market, including prospects for major premium TV providers and the impact of movie distribution alternatives (including video-on-demand, Netflix and Internet-based services) on premium television content strategies.

ß Provided business development support to and/or evaluated market/economic prospects and revenue models for more than 50 proposed subscription TV programming ventures and existing basic and premium television networks. Assignments have addressed both national networks and regional sports and news networks. Clients/properties have ranged from planning stage concepts (e.g., Outdoor Life – now NBC Sports Network, U.S. Olympic Network) to services in the early stages of development (e.g., ZDTV – now Esquire, Classic Sports Network – now ESPN Classic) to widely penetrated networks such as ESPN, Discovery and HGTV. Assignments have encompassed initial business model development, projections of viewing levels and advertising potential, marketing/sales planning, affiliate contract negotiations, programming strategy and programming acquisition, and service implementation.

ß Analyzed the fair market value of television, radio and Internet rights for numerous major programming rights holders, encompassing content with rights values totally more than $20 billion. Analyses have addressed both entertainment and sports content and consider the audience potential, advertising prospects and other economic drivers of the content, as well as cost factors. Analyses have also addressed the value of programming and footage libraries, syndication opportunities, and “ancillary” value components including sponsorship exposure value, live tours, DVD sales, etc.

ß Co-author of Digital Broadcasting: Where Do We Go From Here? This report, released in 2010, evaluated future business prospects and market opportunities for the broadcast television industry – focusing on multicasting, mobile video and other services enabled by digital transmission technology.

ß On behalf of NCTA, authored A Study of the Cable Industry’s Impact on the U.S. Economy. This comprehensive economic impact analysis, released in 2015, analyzed cable industry subscriber growth patterns and operating characteristics and utilized input-output modeling techniques to evaluate cable industry financial flows. These flows were than used to quantify the industry’s direct and indirect contributions to U.S. employment, personal income and gross economic output at the national level as well as by individual Congressional District. Earlier versions of this analysis were prepared in 2015, 2013, 2011, 2008, 2003, 1998, 1990 and 1986. A study addressing 2018 is currently underway.

ß Analyzed financial prospects and estimated the fair market value of over 100 cable television properties both domestically and internationally. Assessments of current and future cable television economics have also been developed on a recurring basis for a major financial institution, as well as an international consulting organization.

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ß Analyzed financial prospects and estimated the fair market value of numerous commercial television and radio station properties, in markets ranging from the largest to the smallest. Analyses evaluate market trends and likely future market capture in terms of both advertising revenue and audience, resulting in the development of pro forma financial projections.

ß For a major broadcast network, assessed digital television opportunities, considered technological and market factors in defining a digital television strategic focus, and developed recommendations relating to cable distribution of digital signals and high definition programming.

ß Provided comprehensive digital transition business planning assistance to the Corporation for Public Broadcasting, the Association of Public Television Stations, the Ford Foundation, the James Irvine Foundation and selected individual public broadcasters. These assignments assessed new service opportunities and involved working with individual public television (PTV) stations to develop digital service/financial models. Elements of the projects included assessment of the overall media environment and its implications for PTV (focusing on the impact of emerging technologies), exploration of digital capacity utilization issues and alternatives (including data-driven, interactive and commerce-based applications), and evaluation of partnership opportunities with both for profit and non-profit entities.

ß Assisted various other public broadcasting organizations in numerous engagements over the past 20 years. In addition to the assignments noted above, these have included development of comprehensive market analyses, development of service and operating structure recommendations for stations, evaluation of advertising potential, assessment of merchandising and licensing practices, support in negotiations for programming distribution, and assessment of Internet business opportunities.

ß Provided strategic planning assistance to Landmark Communications on multiple occasions, supporting the company’s efforts to enhance its television station operations.

ß On behalf of the Corporation for Public Broadcasting, completed a comprehensive, multi-phase assessment of digital radio opportunities, addressing the market potential for both terrestrial and satellite-delivered digital radio in the context of current and projected future radio market trends.

ß On multiple occasions, provided strategic planning assistance to National Public Radio. Assignments encompassed in-depth interviews with NPR affiliate stations, assessment of audience trends and recommendations relating to program scheduling.

ß In the mid-1980s, developed and conducted an annual Cable Operating Performance Benchmarks study for participating cable companies on behalf of the National Cable & Telecommunications Association. This study focused on the interrelationships between operating characteristics and financial performance at the cable system level,

Written Direct Testimony of James M. Trautman | A-4

utilizing detailed operating, financial and market information from more than 150 separate cable systems. Separate industry level analyses have addressed the industry’s economics and financial characteristics on numerous subsequent occasions.

ß Designed, managed and executed a wide range of quantitative and qualitative research studies, including statistically representative national (as well as local and regional) telephone surveys, Internet-based surveys, focus groups, one-on-one interviews and new product trials. A study conducted annually addresses trends in local advertising sales and the factors influencing local ad sales performance.

ß Has provided comprehensive analysis and expert testimony for multiple law firm clients including Arnold & Porter LLP; Wachtell, Lipton, Rosen & Katz; Baker McKenzie; Coblentz, Patch, Duffy & Bass LLP; Davis Wright Tremaine; Kaye Scholer LLP; Lowenstein Sandler LLP; Patton Boggs LLP; Manatt, Phelps & Phillips; Snell & Wilmer; and Winston & Strawn. Support and testimony has encompassed assessment of programming and programming networks; analysis of television viewing data and viewing behavior; valuation of media assets and properties; analysis of digital music prospects; economic and market analysis of media industries, technologies and planned business ventures; analysis of industry and firm-level business practices and strategies; and design/execution of market research.

Senior Associate, BBC, Inc. (1983 to 1988)

Responsible for execution of multi-faceted research and analytical assignments addressing industries including media, entertainment and telecommunications, real estate, banking and public facilities/recreation.

EDUCATION:

M.B.A., Finance (1990), University of Colorado B.S., Economics (1982), Claremont McKenna College, Claremont, California

OTHER:

Author of A Study of the Cable Industry’s Impact on the U.S. Economy; and Public Television’s Transition to a Digital Future. Co-Author of Digital Broadcasting: Where Do We Go From Here?; Public Television in the Information Age; Great Expectations: A Television Manager’s Guide to the Future; and Sports on Television: A Whole New Ballgame.

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APPENDIX B. PROGRAM CATEGORY DEFINITIONS

"Commercial Television Claimants." Programs produced by or for a U.S. commercial television station and broadcast only by that station during the calendar year in question, except those listed in subpart 3) of the Program Suppliers category.

"Devotional Claimants." Syndicated programs of a primarily religious theme, but not limited to programs produced by or for religious institutions.

"Joint Sports Claimants." Live telecasts of professional and college team sports broadcast by U.S. television stations.

"Program Suppliers." Syndicated series, specials and movies, except those included in the Devotional Claimants category. Syndicated series and specials are defined as including (1) programs licensed to and broadcast by at least one U.S. commercial television station during the calendar year in question, (2) programs produced by or for a broadcast station that are broadcast by two or more U.S. television stations during the calendar year in question, and (3) programs produced by or for a U.S. commercial television station that are comprised predominantly of syndicated elements, such as music videos, cartoons, "PM Magazine," and locally-hosted movies.

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Appendix C. Section 119 Signals, Subscriber Instances and Fees Generated, 2010-13

2010 Total Total Signal Affiliation Subscriber Instances Fees Generated WGN-DT CW 261,557,589 66,048,228 WPIX-DT CW 20,329,582 5,112,418 WSFL-DT CW 10,424,714 2,620,097 WNYW-DT FOX 6,928,463 1,732,116 WDCW-DT CW 6,748,167 1,687,042 KTLA-DT CW 6,308,649 1,587,772 WABC-DT ABC 6,140,092 1,535,023 WCBS-DT CBS 5,957,876 1,489,469 WNBC-DT NBC 5,855,298 1,463,825 KTTV-DT FOX 5,058,808 1,264,702 KABC-DT ABC 4,521,703 1,130,426 KCBS-DT CBS 4,454,410 1,113,603 KNBC-DT NBC 4,408,996 1,102,249 KOFY-DT INDEPENDENT 3,447,075 861,769 XETV-DT CW 3,257,862 820,045 WWOR-DT MyNetwork 2,550,456 638,116 KWGN-DT CW 2,427,470 607,348 WSBK-DT MyNetwork 2,376,988 594,729 W21AU Azteca America 1,961,718 490,430 WRTV-DT ABC 1,890,882 472,721 WTHR-DT NBC 1,890,882 472,721 KGO-DT ABC 1,271,538 317,885 KTFF-DT Telefutura 824,704 206,176 WLBT-DT NBC 720,799 180,200 KTVU-DT FOX 623,476 155,869 WNUV-DT CW 572,506 143,127 KPIX-DT CBS 522,205 130,551 KMAX-DT CW 508,685 127,171 WPCW-DT CW 477,703 119,426 KNTV-DT NBC HD 470,406 117,602 KXVO-DT CW 436,720 109,180 KSKN-DT CW HD 409,749 102,437 KSWB-DT FOX 374,134 93,534 WTIC-DT FOX 368,461 92,115

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KRNS-CD CW 334,337 83,584 WMUR-DT ABC 171,608 42,902 WRC-DT NBC 139,169 34,792 WUSA-DT CBS 139,169 34,792 KSAT-DT ABC 120,528 30,132 KREN-DT Univision 114,819 28,705 WFFF-DT FOX 101,659 25,415 WCAX-DT CBS 101,561 25,390 WNNE-DT NBC 101,561 25,390 WVNY-DT ABC 101,561 25,390 WXIN-DT FOX 99,614 24,904 KODF-LD MEGA TV 92,884 23,221 WDSU-DT NBC 92,805 23,201 WWL-DT CBS 92,805 23,201 WICS-DT ABC 91,027 22,757 KARE-DT NBC 88,260 22,065 KSTP-DT ABC 88,260 22,065 WTTV-DT CW 80,916 20,229 KMSP-DT FOX 80,424 20,106 WBNS-DT CBS 76,371 19,093 WSYX-DT ABC 76,371 19,093 WTTE-DT FOX 76,371 19,093 KEYT-DT ABC 73,478 18,370 WGBC-DT FOX 71,031 17,758 WTOK-DT ABC 71,031 17,758 WNOL-DT CW 55,310 13,828 WAPT-DT ABC 54,546 13,637 WJTV-DT CBS 54,546 13,637 WHBQ-DT FOX 52,801 13,200 WMC-DT NBC 52,801 13,200 WREG-DT CBS 52,801 13,200 WTVY-DT CBS 49,207 12,302 KSHB-DT NBC 46,477 11,619 WJHG-DT NBC 38,732 9,683 KFVS-DT CBS 36,881 9,220 WPSD-DT NBC 36,881 9,220 WVLA-DT NBC 33,772 8,443 KFXF-DT FOX 30,568 7,642 KDVR-DT FOX 30,462 7,616 KBMT-DT ABC 30,106 7,527 KFDM-DT CBS 30,106 7,527

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KCNC-DT CBS 29,520 7,380 KMGH-DT ABC HD 29,251 7,313 WKTV-DT NBC 29,077 7,269 KUSA-DT NBC 29,000 7,250 KRMA-DT PBS 27,692 6,923 KTVD-DT MyNetwork 27,567 6,892 KBDI-DT PBS 27,552 6,888 WLBZ-DT NBC 22,883 5,721 WVII-DT ABC 22,883 5,721 WBOY-DT NBC 21,575 5,394 WDTV-DT CBS 21,575 5,394 WCAU-DT NBC 21,123 5,281 KCTV-DT CBS 20,373 5,093 WDAF-DT FOX 20,373 5,093 WCWJ-DT CW 19,049 4,762 WJXX-DT ABC 19,049 4,762 WDVM-DT NBC 18,728 4,682 WLS-DT ABC 18,450 4,613 WBDT-DT CW 18,293 4,573 WKEF-DT ABC 18,293 4,573 WWNY-DT CBS 15,553 3,888 KOLN-DT CBS 13,160 3,290 WFLD-DT FOX 12,721 3,180 WBBM-DT CBS 12,271 3,068 KARK-DT NBC 12,031 3,008 KHOU-DT CBS HD 11,641 2,910 WMAQ-DT NBC 11,137 2,784 KTBY-DT FOX 8,231 2,058 WEYI-DT NBC 7,263 1,816 WJRT-DT ABC 7,263 1,816 KOCO-DT ABC HD 5,982 1,496 WBNX-DT CW 5,025 1,256 WPLG-DT ABC 4,390 1,098 WSEE-DT CBS 4,390 1,098 WTVJ-DT NBC 4,390 1,098 WBNG-DT CBS 4,003 1,001 WXIA-DT NBC 3,767 942 WGCL-DT CBS 3,585 896 WSB-DT ABC 3,400 850 WPTZ-DT NBC 1,690 423 KEVN-DT FOX 1,240 310

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KOTA-DT ABC 1,240 310

Total 380,059,062 95,735,192

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2011 Total Total Signal Affiliation Subscriber Instances Fees Generated WGN-DT CW 261,303,323 66,059,442 WPIX-DT CW 18,469,610 4,650,103 WSFL-DT CW 18,447,594 4,644,588 KTLA-DT CW 6,201,995 1,563,084 XETV-DT CW 6,185,586 1,558,973 WNYW-DT FOX 5,865,705 1,466,426 WABC-DT ABC 5,271,385 1,317,846 WCBS-DT CBS 5,151,999 1,288,000 WDCW-DT CW 5,099,508 1,274,877 WNBC-DT NBC 4,928,200 1,232,050 KTTV-DT FOX 4,123,294 1,030,824 KABC-DT ABC 3,673,622 918,406 KCBS-DT CBS 3,597,977 899,494 KNBC-DT NBC 3,521,491 880,373 WSBK-DT MyNetwork 1,880,287 470,468 KWGN-DT CW 1,850,275 462,962 WWOR-DT MyNetwork 1,843,902 461,367 W21AU Azteca America 1,520,320 380,080 WNUV-DT CW 962,854 240,714 KGO-DT ABC 909,635 227,409 WLBT-DT NBC 751,218 187,805 WPCW-DT CW 534,421 133,605 KMAX-DT CW 431,134 107,784 KXVO-DT CW 420,665 105,166 KTVU-DT FOX 403,741 100,935 KRNS-CD CW 386,252 96,563 WTIC-DT FOX 366,401 91,600 WICS-DT ABC 357,767 89,442 KPIX-DT CBS 349,102 87,276 WTVY-DT CBS 319,857 79,964 KNTV-DT NBC HD 319,607 79,902 WRC-DT NBC 297,121 74,280 WUSA-DT CBS 297,121 74,280 WDSU-DT NBC 289,125 72,281 WWL-DT CBS 289,125 72,281 WNOL-DT CW 239,832 59,958 WLFL-DT CW 239,705 59,926 WJHG-DT NBC 233,818 58,455 Written Direct Testimony of James M. Trautman | C-5

WVLA-DT NBC 210,637 52,659 WGBC-DT FOX 209,560 52,390 WTOK-DT ABC 209,560 52,390 KSAT-DT ABC 190,164 47,541 WCAU-DT NBC 180,186 45,047 WMUR-DT ABC 178,269 44,567 WRTV-DT ABC 157,816 39,454 WTHR-DT NBC 157,816 39,454 WXIN-DT FOX 157,816 39,454 WHBQ-DT FOX 156,737 39,184 WMC-DT NBC 156,737 39,184 WREG-DT CBS 156,737 39,184 KSHB-DT NBC 153,017 38,254 WBDT-DT CW 133,057 33,264 KFVS-DT CBS 117,236 29,309 WPSD-DT NBC 117,236 29,309 WCAX-DT CBS 112,753 28,188 WNNE-DT NBC 112,753 28,188 WVNY-DT ABC 112,753 28,188 WFFF-DT FOX 112,358 28,090 KEYT-DT ABC 109,864 27,466 KARE-DT NBC 108,416 27,104 KSTP-DT ABC 108,416 27,104 WBNX-DT CW 108,156 27,039 WBNS-DT CBS 105,661 26,415 WSYX-DT ABC 105,661 26,415 WTTV-DT CW 102,559 25,640 KBMT-DT ABC 91,679 22,920 KFDM-DT CBS 91,679 22,920 WTTE-DT FOX 89,907 22,477 WKTV-DT NBC 88,429 22,107 WKEF-DT ABC 76,445 19,111 KMSP-DT FOX 76,325 19,081 KCTV-DT CBS 73,958 18,490 WDAF-DT FOX 73,958 18,490 WLBZ-DT NBC 68,383 17,096 WVII-DT ABC 68,383 17,096 WBNG-DT CBS 67,196 16,799 WDVM-DT NBC 65,967 16,492 WDTV-DT CBS 60,810 15,203 WAPT-DT ABC 54,426 13,607

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WJTV-DT CBS 54,426 13,607 KFXF-DT FOX 53,878 13,470 WGNO-DT ABC 51,194 12,799 KOLN-DT CBS 38,737 9,684 WJXX-DT ABC 34,077 8,519 WBOY-DT2 ABC 32,477 8,119 KALB-DT NBC 31,516 7,879 KHOU-DT CBS HD 31,255 7,814 WBOY-DT NBC 28,333 7,083 WNAB-DT CW 24,266 6,067 WSMV-DT NBC 24,266 6,067 WTVF-DT CBS 24,266 6,067 WEYI-DT NBC 21,882 5,471 WJRT-DT ABC 21,882 5,471 WHEC-DT NBC 21,863 5,466 WLMT-DT CW 17,081 4,270 WWHO-DT CW 15,754 3,939 WTVH-DT CBS 12,860 3,215 WPTZ-DT NBC 12,373 3,093 KHGI-DT ABC 11,073 2,768 KBSI-DT FOX 9,298 2,325 WCWJ-DT CW 5,707 1,427 KEVN-DT FOX 3,795 949 KOTA-DT ABC 3,795 949 KEYC-DT CBS 2,230 558

Total 372,812,334 94,028,428

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2012 Total Total Signal Affiliation Subscriber Instances Fees Generated WGN-DT CW 258,026,539 68,041,818 WPIX-DT CW 13,627,450 3,564,883 WDCW-DT CW 6,299,365 1,637,835 WNYW-DT FOX 4,971,473 1,292,583 WCBS-DT CBS 4,693,671 1,220,354 WABC-DT ABC 4,461,734 1,160,051 WNBC-DT NBC 4,324,978 1,124,494 KTLA-DT CW 3,722,369 972,573 KTTV-DT FOX 3,691,155 959,700 WSFL-DT CW 3,388,373 887,844 KABC-DT ABC 3,198,321 831,563 KNBC-DT NBC 3,123,105 812,007 KCBS-DT CBS 3,072,771 798,920 WWOR-DT MyNetwork 1,697,711 441,687 KWGN-DT CW 1,619,056 421,238 WSBK-DT MyNetwork 1,543,030 401,469 WPCW-DT CW 579,215 150,596 WLBT-DT NBC 516,472 134,283 KXVO-DT CW 513,549 133,523 WVLA-DT NBC 492,110 127,949 WLFL-DT CW 391,767 101,859 KGO-DT ABC 357,762 93,018 KMAX-DT CW 349,578 90,890 XETV-DT CW 346,072 90,639 WRC-DT NBC 346,457 90,079 KSHB-DT NBC 335,603 87,257 WTVY-DT CBS 329,023 85,546 KTVU-DT FOX 327,498 85,149 KRNS-CD CW 312,173 81,165 WMC-DT NBC 297,766 77,419 WUSA-DT CBS 287,236 74,681 KPIX-DT CBS 284,579 73,991 WCAU-DT NBC 278,079 72,301 KNTV-DT NBC HD 261,873 68,087 WNOL-DT CW 240,523 62,536 WJHG-DT NBC 239,325 62,225 WMUR-DT ABC 221,327 57,545 WPSD-DT NBC 216,924 56,400 Written Direct Testimony of James M. Trautman | C-8

KSAT-DT ABC 203,529 52,918 WBDT-DT CW 199,107 51,768 WHBQ-DT FOX 195,892 50,932 WREG-DT CBS 195,892 50,932 WRTV-DT ABC 182,673 47,495 WXIN-DT FOX 181,434 47,173 WTHR-DT NBC 176,348 45,850 WLMT-DT CW 172,881 44,949 WDSU-DT NBC 171,599 44,616 WBNX-DT CW 165,585 43,052 WSYX-DT ABC 162,254 42,186 KALB-DT NBC 158,904 41,315 KLAX-DT ABC 158,904 41,315 KCTV-DT CBS 146,666 38,133 WBNS-DT CBS 137,672 35,795 WCAX-DT CBS 125,037 32,510 WNNE-DT NBC 125,037 32,510 WVNY-DT ABC 125,037 32,510 WFFF-DT FOX 124,905 32,475 WTOK-DT ABC 122,133 31,755 WHEC-DT NBC 121,060 31,476 KARE-DT NBC 119,348 31,030 KSTP-DT ABC 119,348 31,030 KFVS-DT CBS 115,557 30,045 WTVH-DT CBS 111,975 29,114 WWL-DT CBS 111,735 29,051 WTTV-DT CW 110,156 28,641 WKTV-DT NBC 109,552 28,484 WDVM-DT NBC 102,874 26,747 KATC-DT ABC 99,783 25,944 KLFY-DT CBS HD 99,783 25,944 WTTE-DT FOX 98,551 25,623 WGNO-DT ABC 90,463 23,520 WLBZ-DT NBC 87,925 22,861 WVII-DT ABC 87,925 22,861 WBNG-DT CBS 84,821 22,053 KBSI-DT FOX 84,018 21,845 WWHO-DT CW 63,703 16,563 WDAF-DT FOX 57,460 14,940 KFXF-DT FOX 56,697 14,741 WAPT-DT ABC 54,771 14,240

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WJTV-DT CBS 54,771 14,240 WDTV-DT CBS 47,476 12,344 KOLN-DT CBS 47,388 12,321 WNAB-DT CW 46,857 12,183 WSMV-DT NBC 46,857 12,183 KHGI-DT ABC 43,436 11,293 WGBC-DT FOX 39,860 10,364 WCHS-DT ABC 36,942 9,605 WBOY-DT NBC 35,463 9,220 WEYI-DT NBC 29,742 7,733 WJRT-DT ABC News 29,742 7,733 WPTZ-DT NBC 24,992 6,498 KTMF-DT ABC 21,870 5,686 WTIC-DT FOX 9,838 2,558 KBMT-DT ABC 8,684 2,258 KFDM-DT CBS 8,684 2,258 KEYC-DT CBS 7,965 2,071 WISE-DT NBC 6,325 1,645 KEVN-DT FOX 4,954 1,288 KOTA-DT ABC 4,954 1,288 WNKY-DT NBC 2,984 776

Total 334,764,790 88,028,640

Written Direct Testimony of James M. Trautman | C-10

2013 Total Total Signal Affiliation Subscriber Instances Fees Generated WGN-DT CW 244,838,164 67,050,270 WPIX-DT CW 13,131,290 3,569,531 WDCW-DT CW 7,646,822 2,064,642 WNYW-DT FOX 4,459,877 1,204,167 WCBS-DT CBS 4,294,382 1,159,483 WABC-DT ABC 4,167,367 1,125,189 WNBC-DT NBC 3,975,565 1,073,403 KTTV-DT FOX 3,185,446 860,070 KTLA-DT CW 2,969,070 805,476 KABC-DT ABC 2,863,709 773,201 KCBS-DT CBS 2,711,472 732,097 KNBC-DT NBC 2,645,276 714,225 WWOR-DT MyNetwork 1,451,651 392,127 KWGN-DT CW 1,405,134 379,567 WSFL-DT CW 1,387,655 377,948 WSBK-DT MyNetwork 1,335,749 360,829 WVLA-DT NBC 982,750 265,343 WPCW-DT CW 606,932 163,872 KXVO-DT CW 583,461 157,534 WMC-DT NBC 401,034 108,279 WRC-DT NBC 371,589 100,329 WCAU-DT NBC 328,624 88,728 WLFL-DT CW 312,895 84,482 WMUR-DT ABC 309,881 83,668 KGO-DT ABC 291,306 78,653 KMAX-DT CW 286,126 77,254 KSHB-DT NBC 283,977 76,674 WNOL-DT CW 278,694 75,247 KTVU-DT FOX 271,033 73,179 WLMT-DT CW 256,526 69,262 WPSD-DT NBC 250,395 67,607 KPIX-DT CBS 241,471 65,197 WBDT-DT CW 225,862 60,983 KNTV-DT NBC HD 222,640 60,113 KRNS-CD CW 207,983 56,155 KSAT-DT ABC 206,983 55,885 WHBQ-DT FOX 203,671 54,991 WREG-DT CBS 203,671 54,991 Written Direct Testimony of James M. Trautman | C-11

WBNX-DT CW 200,961 54,259 KALB-DT NBC 196,811 53,139 KLAX-DT ABC 196,811 53,139 WRTV-DT ABC 195,575 52,805 WTHR-DT NBC 195,575 52,805 WXIN-DT FOX 195,575 52,805 WSYX-DT ABC 177,525 47,932 WTVH-DT CBS 173,458 46,834 KCTV-DT CBS 167,680 45,274 WHEC-DT NBC 155,180 41,899 WCAX-DT CBS 125,918 33,998 WFFF-DT FOX 125,918 33,998 WNNE-DT NBC 125,918 33,998 WVNY-DT ABC 125,918 33,998 KARE-DT NBC 125,107 33,779 KSTP-DT ABC 125,107 33,779 WDVM-DT NBC 123,281 33,286 WKTV-DT NBC 116,530 31,463 WTTV-DT CW 114,784 30,992 KATC-DT ABC 110,823 29,922 KLFY-DT CBS HD 110,823 29,922 KBSI-DT FOX 108,276 29,235 KFVS-DT CBS 108,276 29,235 WBNS-DT CBS 104,921 28,329 WTTE-DT FOX 104,921 28,329 WJHG-DT NBC 100,559 27,151 WLBZ-DT NBC 97,038 26,200 WVII-DT ABC 97,038 26,200 WCHS-DT ABC 78,396 21,167 WWHO-DT CW 72,604 19,603 WUSA-DT CBS 63,781 17,221 WBNG-DT CBS 61,611 16,635 WAPT-DT ABC 54,634 14,751 WJTV-DT CBS 54,634 14,751 WLBT-DT NBC 54,634 14,751 WEYI-DT NBC 35,211 9,507 KOLN-DT CBS 31,761 8,575 WPTZ-DT NBC 26,182 7,069 KHGI-DT ABC 19,911 5,376 WJRT-DT ABC News 19,868 5,364 KEYC-DT CBS 8,582 2,317

Written Direct Testimony of James M. Trautman | C-12

KEVN-DT FOX 5,523 1,491 KOTA-DT ABC 5,523 1,491 KFXF-DT FOX 3,352 905

Total 314,298,647 85,836,330 Source: CDC, JSC_Satellite_Carriage_Detail_by_Account_Period_20101 to 20132 .

Written Direct Testimony of James M. Trautman | C-13

Appendix D. Network Live Professional & College Sports Telecasts, 2010-2013*

Number of Telecasts Total: 2010 2011 2012 2013 2010-13 ABC NBA: Regular Season 15 15 15 15 60 Postseason 9 9 9 9 36 Finals 7 6 5 7 25 NCAA Reg. Season Men's Basketball 3 3 3 3 12 NCAA Football 33 27 34 38 132 Volleyball 1 NA NA NA 1 WNBA Basketball 2 2 2 2 8 World Cup Soccer 10 NA NA NA 10 Subtotal 80 62 68 74 188 CBS Arena Football NA NA NA 1 1 NFL 37 33 35 36 141 NCAA Mens Basketball Tournament 26 26 26 26 104 NCAA Reg. Season Men's Basketball 39 38 36 40 153 NCAA Women's Basketball 2 2 2 2 8 NCAA Football 19 12 19 20 70 Subtotal 123 111 118 125 477 NBC MLS/Premier League Soccer NA NA 3 18 21 NFL 22 24 26 23 95 NHL: Regular Season 10 12 11 15 48 Postseason 9 8 12 8 37 Finals 4 5 4 4 17 NCAA Football 9 7 7 8 31 Rugby 2 2 4 4 12 Volleyball 1 2 NA 2 5 Women's Soccer NA NA 2 2 4 - - - Subtotal 57 60 69 84 270

Total 260 233 255 283 935 * Number of telecasts differs slightly from telecasts identified in Appendix E, due primarily to Gracenote inclusion of partial telecasts of selected NCAA football games. Source: Bortz Media compilation based on Gracenote programming data.

Written Direct Testimony of James M. Trautman | D-1 Appendix E. JSC Telecasts on ABC, CBS and NBC, 2010-13

Date Network Duration Program Type Program Title*

2010 ABC 7252010 ABC 90 Beach Volleyball AVP Nivea Tour: Malibu Open - Men's Final 3132010 ABC 154 College Basketball SEC Tournament: Kentucky vs. Tennessee 3132010 ABC 128 College Basketball SEC Tournament: Mississippi State vs. Vanderbilt 3142010 ABC 150 College Basketball SEC Tournament: Kentucky vs. Mississippi State 1012010 ABC 217 College Football Capital One Bowl: LSU vs. Penn State 1012010 ABC 206 College Football Rose Bowl: Ohio State vs. Oregon 1072010 ABC 224 College Football Citi BCS National Championship Game: Alabama vs. Texas 9042010 ABC 197 College Football Connecticut at Michigan 9042010 ABC 13 College Football UCLA at Kansas State 9042010 ABC 238 College Football LSU vs North Carolina 9112010 ABC 232 College Football Florida State at Oklahoma 9182010 ABC 200 College Football Arizona State at Wisconsin 9182010 ABC 236 College Football Notre Dame at Michigan State 9252010 ABC 210 College Football Eastern Michigan at Ohio State 9252010 ABC 205 College Football Oregon State at Boise State 10022010 ABC 210 College Football Wisconsin at Michigan State 10022010 ABC 222 College Football Notre Dame at Boston College 10092010 ABC 210 College Football Michigan State at Michigan 10092010 ABC 205 College Football Florida State at Miami 10092010 ABC 25 College Football USC at Stanford 10162010 ABC 204 College Football Iowa at Michigan 10162010 ABC 6 College Football Texas at Nebraska 10232010 ABC 210 College Football Wisconsin at Iowa 10232010 ABC 236 College Football Oklahoma at Missouri 10302010 ABC 203 College Football Michigan State at Iowa 10302010 ABC 180 College Football Ohio State at Minnesota 10302010 ABC 52 College Football Oregon at USC 11062010 ABC 214 College Football Northwestern at Penn State 11062010 ABC 200 College Football Arizona at Stanford 11062010 ABC 20 College Football Missouri at Texas Tech 11132010 ABC 199 College Football Penn State at Ohio State 11132010 ABC 159 College Football Oklahoma State at Texas 11132010 ABC 61 College Football USC at Arizona 11202010 ABC 200 College Football Ohio State at Iowa 11202010 ABC 205 College Football Nebraska at Texas A&M 11262010 ABC 195 College Football West Virginia at Pittsburgh 11262010 ABC 210 College Football Colorado at Nebraska

Written Direct Testimony of James M. Trautman | E-1

11272010 ABC 203 College Football Michigan at Ohio State 11272010 ABC 197 College Football Northwestern at Wisconsin 11272010 ABC 210 College Football Notre Dame at USC 12042010 ABC 193 College Football Rutgers at West Virginia 12042010 ABC 210 College Football Oregon at Oregon State 12042010 ABC 234 College Football Big 12 Championship: Nebraska vs. Oklahoma 1312010 ABC 150 NBA Basketball Denver Nuggets at San Antonio Spurs 1312010 ABC 161 NBA Basketball Los Angeles Lakers at Boston Celtics 2072010 ABC 159 NBA Basketball Orlando Magic at Boston Celtics 2212010 ABC 160 NBA Basketball Cleveland Cavaliers at Orlando Magic 2212010 ABC 154 NBA Basketball Boston Celtics at Denver Nuggets 2282010 ABC 157 NBA Basketball Phoenix Suns at San Antonio Spurs 2282010 ABC 155 NBA Basketball Denver Nuggets at Los Angeles Lakers 3072010 ABC 176 NBA Basketball Los Angeles Lakers at Orlando Magic 3142010 ABC 180 NBA Basketball Boston Celtics at Cleveland Cavaliers 4042010 ABC 172 NBA Basketball Cleveland Cavaliers at Boston Celtics 4042010 ABC 140 NBA Basketball San Antonio Spurs at Los Angeles Lakers 4112010 ABC 150 NBA Basketball Orlando Magic at Cleveland Cavaliers 4112010 ABC 163 NBA Basketball Portland Trail Blazers at Los Angeles Lakers 4172010 ABC 150 NBA Basketball Chicago Bulls at Cleveland Cavaliers 4182010 ABC 165 NBA Basketball Oklahoma City Thunder at Los Angeles Lakers 4252010 ABC 171 NBA Basketball Boston Celtics at Miami Heat 4252010 ABC 159 NBA Basketball Cleveland Cavaliers at Chicago Bulls 5022010 ABC 150 NBA Basketball Milwaukee Bucks at Atlanta Hawks 5022010 ABC 163 NBA Basketball Utah Jazz at Los Angeles Lakers 5082010 ABC 165 NBA Basketball Los Angeles Lakers at Utah Jazz 5092010 ABC 180 NBA Basketball Cleveland Cavaliers at Boston Celtics 5162010 ABC 180 NBA Basketball Boston Celtics at Orlando Magic 6032010 ABC 176 NBA Basketball Finals 6062010 ABC 180 NBA Basketball Finals 6082010 ABC 175 NBA Basketball Finals 6102010 ABC 170 NBA Basketball Finals 6132010 ABC 180 NBA Basketball Finals 6152010 ABC 163 NBA Basketball Finals 6172010 ABC 202 NBA Basketball Finals 12252010 ABC 166 NBA Basketball Boston Celtics at Orlando Magic 12252010 ABC 164 NBA Basketball Miami Heat at Los Angeles Lakers 9052010 ABC 135 WNBA Basketball Seattle Storm at Phoenix Mercury 9122010 ABC 150 WNBA Basketball Finals 6122010 ABC 180 World Cup Soccer Group Stage: England vs. United States 6132010 ABC 150 World Cup Soccer Group Stage: Australia vs. Germany 6192010 ABC 150 World Cup Soccer Group Stage: Cameroon vs. Denmark

Written Direct Testimony of James M. Trautman | E-2

6202010 ABC 150 World Cup Soccer Group Stage: Brazil vs. Cote d'Ivoire 6262010 ABC 192 World Cup Soccer Round of 16: Ghana vs. United States 6272010 ABC 150 World Cup Soccer Round of 16: Argentina vs. Mexico 7032010 ABC 150 World Cup Soccer Third Quarterfinal: Argentina vs. Germany 7032010 ABC 162 World Cup Soccer Fourth Quarterfinal: Paraguay vs. Spain 7102010 ABC 150 World Cup Soccer Third Place: Germany vs. Uruguay 7112010 ABC 240 World Cup Soccer Final: Netherlands vs. Spain CBS 1022010 CBS 150 College Basketball Arizona at UCLA 1022010 CBS 150 College Basketball Louisville at Kentucky 1102010 CBS 150 College Basketball Kansas at Tennessee 1162010 CBS 150 College Basketball Illinois at Michigan State 1172010 CBS 150 College Basketball Connecticut at Michigan 1232010 CBS 120 College Basketball Michigan State at Minnesota 1232010 CBS 120 College Basketball Oregon State at California 1232010 CBS 15 College Basketball Oregon State at California 1232010 CBS 135 College Basketball Texas at Connecticut 1302010 CBS 135 College Basketball Duke at Georgetown 1312010 CBS 120 College Basketball Minnesota at Ohio State 2062010 CBS 120 College Basketball California at UCLA 2132010 CBS 120 College Basketball Maryland at Duke 2142010 CBS 120 College Basketball Ohio State at Illinois 2202010 CBS 135 College Basketball North Carolina at Boston College 2212010 CBS 150 College Basketball Villanova at Pittsburgh 2272010 CBS 135 College Basketball Kentucky at Tennessee 2272010 CBS 120 College Basketball North Carolina at Wake Forest 2272010 CBS 135 College Basketball Kansas at Oklahoma State 2282010 CBS 135 College Basketball Louisville at Connecticut 2282010 CBS 120 College Basketball Big Ten Wildcard: Teams TBA 3062010 CBS 165 College Basketball West Virginia at Villanova 3062010 CBS 90 College Basketball Kansas at Missouri 3062010 CBS 120 College Basketball UCLA at Arizona State 3072010 CBS 135 College Basketball Florida at Kentucky 3072010 CBS 120 College Basketball Michigan at Michigan State 3072010 CBS 120 College Basketball MVC Tournament: Northern Iowa vs. Wichita State 3132010 CBS 135 College Basketball Conference USA Tournament: Houston vs. Texas-El Paso 3132010 CBS 165 College Basketball Big Ten Tournament: Illinois vs. Ohio State 3132010 CBS 120 College Basketball Big Ten Tournament: Minnesota vs. Purdue 3132010 CBS 105 College Basketball Pac-10 Tournament: California vs. Washington 3142010 CBS 150 College Basketball Atlantic 10 Tournament: Richmond vs. Temple 3142010 CBS 150 College Basketball Big Ten Tournament: Minnesota vs. Ohio State 3182010 CBS 185 College Basketball NCAA Tournament: Florida vs. BYU

Written Direct Testimony of James M. Trautman | E-3

3182010 CBS 165 College Basketball NCAA Tournament: St. Mary's vs. Richmond 3182010 CBS 195 College Basketball NCAA Tournament: Washington vs. Marquette 3182010 CBS 150 College Basketball NCAA Tournament: San Diego State vs. Tennessee 3192010 CBS 140 College Basketball NCAA Tournament: Minnesota vs. Xavier 3192010 CBS 180 College Basketball NCAA Tournament: Missouri vs. Clemson 3192010 CBS 180 College Basketball NCAA Tournament: Florida State vs. Gonzaga 3192010 CBS 165 College Basketball NCAA Tournament: Louisville vs. California 3202010 CBS 135 College Basketball NCAA Tournament: St. Mary's vs. Villanova 3202010 CBS 150 College Basketball NCAA Tournament: Ohio vs. Tennessee 3202010 CBS 150 College Basketball NCAA Tournament: Washington vs. New Mexico 3202010 CBS 150 College Basketball NCAA Tournament: BYU vs. Kansas State 3212010 CBS 135 College Basketball NCAA Tournament: Gonzaga vs. Syracuse 3212010 CBS 165 College Basketball NCAA Tournament: Georgia Tech vs. Ohio State 3212010 CBS 165 College Basketball NCAA Tournament: California vs. Duke 3252010 CBS 150 College Basketball NCAA Tournament: Washington vs. West Virginia 3252010 CBS 195 College Basketball NCAA Tournament: Cornell vs. Kentucky 3262010 CBS 150 College Basketball NCAA Tournament: St. Mary's vs. Baylor 3262010 CBS 169 College Basketball NCAA Tournament: Purdue vs. Duke 3272010 CBS 135 College Basketball NCAA Division II Tournament: Cal Poly Pomona vs. Indiana (Pa.) 3272010 CBS 150 College Basketball NCAA Tournament: Butler vs. Kansas State 3272010 CBS 165 College Basketball NCAA Tournament: West Virginia vs. Kentucky 3282010 CBS 165 College Basketball NCAA Tournament: Tennessee vs. Michigan State 3282010 CBS 150 College Basketball NCAA Tournament: Baylor vs. Duke 4032010 CBS 150 College Basketball NCAA Tournament: Butler vs. Michigan State 4032010 CBS 135 College Basketball NCAA Tournament: West Virginia vs. Duke 4052010 CBS 165 College Basketball NCAA Tournament 12042010 CBS 150 College Basketball Kentucky at North Carolina 12112010 CBS 120 College Basketball St. Louis at Duke 12182010 CBS 120 College Basketball Stanford at Butler 12182010 CBS 135 College Basketball North Carolina vs Texas 12312010 CBS 135 College Basketball Kentucky at Louisville 1012010 CBS 225 College Football Konica Minolta Gator Bowl: Florida State vs. West Virginia 9182010 CBS 210 College Football Florida at Tennessee 9252010 CBS 210 College Football Alabama at Arkansas 10022010 CBS 205 College Football Tennessee at LSU 10022010 CBS 195 College Football Florida at Alabama 10092010 CBS 210 College Football Alabama at South Carolina 10162010 CBS 234 College Football Arkansas at Auburn 10232010 CBS 195 College Football Navy vs Notre Dame 10232010 CBS 218 College Football LSU at Auburn 10302010 CBS 240 College Football Florida vs Georgia 11062010 CBS 219 College Football Alabama at LSU

Written Direct Testimony of James M. Trautman | E-4

11132010 CBS 225 College Football Mississippi at Tennessee 11132010 CBS 225 College Football Georgia at Auburn 11202010 CBS 225 College Football Mississippi at LSU 11262010 CBS 225 College Football Auburn at Alabama 11272010 CBS 240 College Football LSU at Arkansas 12042010 CBS 225 College Football SEC Championship: Auburn vs. South Carolina 12112010 CBS 210 College Football Army vs Navy 12312010 CBS 225 College Football Hyundai Sun Bowl: Miami vs. Notre Dame 1032010 CBS 195 NFL Football Pittsburgh Steelers at Miami Dolphins 1032010 CBS 195 NFL Football Baltimore Ravens at Oakland Raiders 1102010 CBS 195 NFL Football AFC Wild-Card: Baltimore Ravens at New England Patriots 1162010 CBS 180 NFL Football AFC Divisional Playoff: Baltimore Ravens at Indianapolis Colts 1172010 CBS 202 NFL Football AFC Divisional Playoff: New York Jets at San Diego Chargers 1242010 CBS 195 NFL Football AFC Championship: New York Jets at Indianapolis Colts 2072010 CBS 200 NFL Football Super Bowl XLIV: Indianapolis Colts vs. New Orleans Saints 8152010 CBS 180 NFL Football Chicago Bears at San Diego Chargers 8212010 CBS 180 NFL Football Dallas Cowboys at San Diego Chargers 8272010 CBS 210 NFL Football San Diego Chargers at New Orleans Saints 8282010 CBS 180 NFL Football Dallas Cowboys at Houston Texans 9022010 CBS 180 NFL Football San Diego Chargers at San Francisco 49ers 9122010 CBS 195 NFL Football Oakland Raiders at Tennessee Titans 9192010 CBS 180 NFL Football Miami Dolphins at Minnesota Vikings 9192010 CBS 210 NFL Football New England Patriots at New York Jets 9262010 CBS 180 NFL Football Tennessee Titans at New York Giants 9262010 CBS 210 NFL Football San Diego Chargers at Seattle Seahawks 10032010 CBS 180 NFL Football Baltimore Ravens at Pittsburgh Steelers 10102010 CBS 180 NFL Football Kansas City Chiefs at Indianapolis Colts 10102010 CBS 225 NFL Football San Diego Chargers at Oakland Raiders 10172010 CBS 195 NFL Football San Diego Chargers at St. Louis Rams 10242010 CBS 195 NFL Football Pittsburgh Steelers at Miami Dolphins 10242010 CBS 165 NFL Football New England Patriots at San Diego Chargers 10312010 CBS 195 NFL Football Jacksonville Jaguars at Dallas Cowboys 11072010 CBS 180 NFL Football San Diego Chargers at Houston Texans 11072010 CBS 225 NFL Football Kansas City Chiefs at Oakland Raiders 11142010 CBS 195 NFL Football Cincinnati Bengals at Indianapolis Colts 11212010 CBS 180 NFL Football Oakland Raiders at Pittsburgh Steelers 11212010 CBS 180 NFL Football Indianapolis Colts at New England Patriots 11252010 CBS 180 NFL Football New England Patriots at Detroit Lions 11282010 CBS 195 NFL Football Miami Dolphins at Oakland Raiders 12052010 CBS 195 NFL Football Oakland Raiders at San Diego Chargers 12122010 CBS 180 NFL Football Oakland Raiders at Jacksonville Jaguars 12122010 CBS 195 NFL Football Kansas City Chiefs at San Diego Chargers

Written Direct Testimony of James M. Trautman | E-5

12192010 CBS 180 NFL Football Jacksonville Jaguars at Indianapolis Colts 12192010 CBS 180 NFL Football New York Jets at Pittsburgh Steelers 12262010 CBS 180 NFL Football San Diego Chargers at Cincinnati Bengals 1092010 CBS 135 Women's Coll. Bask. Ohio State at Michigan State 1092010 CBS 105 Women's Coll. Bask. North Carolina at Connecticut NBC 9042010 NBC 210 College Football Purdue at Notre Dame 9112010 NBC 240 College Football Michigan at Notre Dame 9252010 NBC 230 College Football Stanford at Notre Dame 10092010 NBC 210 College Football Pittsburgh at Notre Dame 10162010 NBC 215 College Football Western Michigan at Notre Dame 10302010 NBC 240 College Football Tulsa at Notre Dame 11132010 NBC 240 College Football Utah at Notre Dame 11202010 NBC 240 College Football Army vs Notre Dame 11272010 NBC 240 College Football Grambling State vs Southern 6052010 NBC 120 College Rugby Collegiate Sevens Championship: Teams TBA 6062010 NBC 120 College Rugby Collegiate Sevens Championship: Teams TBA 1032010 NBC 205 NFL Football Cincinnati Bengals at New York Jets 1092010 NBC 210 NFL Football AFC Wild-Card: New York Jets at Cincinnati Bengals 1092010 NBC 215 NFL Football NFC Wild-Card: Philadelphia Eagles at Dallas Cowboys 8082010 NBC 205 NFL Football Hall of Fame Game: Cincinnati Bengals vs. Dallas Cowboys 8222010 NBC 186 NFL Football Minnesota Vikings at San Francisco 49ers 9092010 NBC 188 NFL Football Minnesota Vikings at New Orleans Saints 9122010 NBC 206 NFL Football Dallas Cowboys at Washington Redskins 9192010 NBC 195 NFL Football New York Giants at Indianapolis Colts 9262010 NBC 217 NFL Football New York Jets at Miami Dolphins 10032010 NBC 197 NFL Football Chicago Bears at New York Giants 10102010 NBC 208 NFL Football Philadelphia Eagles at San Francisco 49ers 10172010 NBC 202 NFL Football Indianapolis Colts at Washington Redskins 10242010 NBC 202 NFL Football Minnesota Vikings at Green Bay Packers 10312010 NBC 195 NFL Football Pittsburgh Steelers at New Orleans Saints 11072010 NBC 195 NFL Football Dallas Cowboys at Green Bay Packers 11142010 NBC 225 NFL Football New England Patriots at Pittsburgh Steelers 11212010 NBC 221 NFL Football New York Giants at Philadelphia Eagles 11282010 NBC 186 NFL Football San Diego Chargers at Indianapolis Colts 12052010 NBC 204 NFL Football Pittsburgh Steelers at Baltimore Ravens 12122010 NBC 200 NFL Football Philadelphia Eagles at Dallas Cowboys 12192010 NBC 195 NFL Football Green Bay Packers at New England Patriots 12282010 NBC 218 NFL Football Minnesota Vikings at Philadelphia Eagles 1012010 NBC 210 NHL Hockey Boston Bruins vs Philadelphia Flyers 1172010 NBC 167 NHL Hockey Chicago Blackhawks at Detroit Red Wings 1242010 NBC 157 NHL Hockey Pittsburgh Penguins at Philadelphia Flyers

Written Direct Testimony of James M. Trautman | E-6

1312010 NBC 164 NHL Hockey Detroit Red Wings at Pittsburgh Penguins 2072010 NBC 171 NHL Hockey Pittsburgh Penguins at Washington Capitals 3072010 NBC 150 NHL Hockey Detroit Red Wings at Chicago Blackhawks 3142010 NBC 150 NHL Hockey Washington Capitals at Chicago Blackhawks 3212010 NBC 155 NHL Hockey New York Rangers at Boston Bruins 4042010 NBC 150 NHL Hockey Detroit Red Wings at Philadelphia Flyers 4112010 NBC 160 NHL Hockey Boston Bruins at Washington Capitals 4172010 NBC 173 NHL Hockey Boston Bruins at Buffalo Sabres 4182010 NBC 180 NHL Hockey Phoenix Coyotes at Detroit Red Wings 4242010 NBC 194 NHL Hockey Nashville Predators at Chicago Blackhawks 4252010 NBC 180 NHL Hockey Phoenix Coyotes at Detroit Red Wings 5012010 NBC 210 NHL Hockey Philadelphia Flyers at Boston Bruins 5022010 NBC 180 NHL Hockey Montreal Canadiens at Pittsburgh Penguins 5162010 NBC 180 NHL Hockey Chicago Blackhawks at San Jose Sharks 5222010 NBC 180 NHL Hockey Philadelphia Flyers at Montreal Canadiens 5232010 NBC 180 NHL Hockey San Jose Sharks at Chicago Blackhawks 5292010 NBC 180 NHL Hockey Stanley Cup Final 5312010 NBC 60 NHL Hockey Stanley Cup Final 6062010 NBC 180 NHL Hockey Stanley Cup Final 6092010 NBC 213 NHL Hockey Stanley Cup Final 7042010 NBC 90 Volleyball FIVB Grand Slam 2011 ABC 1302011 ABC 171 NBA Basketball Miami Heat at Oklahoma City Thunder 1302011 ABC 149 NBA Basketball Boston Celtics at Los Angeles Lakers 2062011 ABC 164 NBA Basketball Orlando Magic at Boston Celtics 2132011 ABC 162 NBA Basketball Miami Heat at Boston Celtics 2132011 ABC 138 NBA Basketball Los Angeles Lakers at Orlando Magic 2272011 ABC 150 NBA Basketball Los Angeles Lakers at Oklahoma City Thunder 3062011 ABC 156 NBA Basketball Chicago Bulls at Miami Heat 3062011 ABC 144 NBA Basketball Los Angeles Lakers at San Antonio Spurs 3132011 ABC 150 NBA Basketball Orlando Magic at Phoenix Suns 4032011 ABC 145 NBA Basketball Phoenix Suns at San Antonio Spurs 4032011 ABC 169 NBA Basketball Denver Nuggets at Los Angeles Lakers 4102011 ABC 162 NBA Basketball Chicago Bulls at Orlando Magic 4102011 ABC 156 NBA Basketball Boston Celtics at Miami Heat 4162011 ABC 167 NBA Basketball Philadelphia 76ers at Miami Heat 4172011 ABC 169 NBA Basketball New Orleans Hornets at Los Angeles Lakers 4242011 ABC 168 NBA Basketball Miami Heat at Philadelphia 76ers 4242011 ABC 169 NBA Basketball Boston Celtics at New York Knicks 5012011 ABC 164 NBA Basketball Memphis Grizzlies at Oklahoma City Thunder 5012011 ABC 172 NBA Basketball Boston Celtics at Miami Heat

Written Direct Testimony of James M. Trautman | E-7

5072011 ABC 165 NBA Basketball Miami Heat at Boston Celtics 5082011 ABC 166 NBA Basketball Los Angeles Lakers at Dallas Mavericks 5152011 ABC 163 NBA Basketball Memphis Grizzlies at Oklahoma City Thunder 5312011 ABC 170 2011 NBA Finals Dallas Mavericks at Miami Heat 6022011 ABC 170 2011 NBA Finals Dallas Mavericks at Miami Heat 6052011 ABC 180 2011 NBA Finals Miami Heat at Dallas Mavericks 6072011 ABC 170 2011 NBA Finals Miami Heat at Dallas Mavericks 6092011 ABC 170 2011 NBA Finals Miami Heat at Dallas Mavericks 6122011 ABC 193 2011 NBA Finals Dallas Mavericks at Miami Heat 12252011 ABC 175 NBA Basketball Miami Heat at Dallas Mavericks 12252011 ABC 160 NBA Basketball Chicago Bulls at Los Angeles Lakers 1012011 ABC 240 College Football Outback Bowl: Florida vs. Penn State 9032011 ABC 117 College Football Western Michigan at Michigan 9032011 ABC 12 College Football Minnesota at USC 9032011 ABC 47 College Football Western Michigan at Michigan 9032011 ABC 34 College Football Minnesota at USC 9032011 ABC 10 College Football Western Michigan at Michigan 9032011 ABC 225 College Football LSU vs Oregon 9102011 ABC 210 College Football Alabama at Penn State 9172011 ABC 215 College Football Auburn at Clemson 9172011 ABC 219 College Football Washington at Nebraska 9172011 ABC 210 College Football Oklahoma at Florida State 9242011 ABC 215 College Football Notre Dame at Pittsburgh 9242011 ABC 205 College Football Colorado at Ohio State 9242011 ABC 240 College Football LSU at West Virginia 11052011 ABC 210 College Football Purdue at Wisconsin 11052011 ABC 203 College Football Notre Dame at Wake Forest 11122011 ABC 215 College Football Oklahoma State at Texas Tech 11122011 ABC 211 College Football Michigan at Illinois 11122011 ABC 220 College Football Oregon at Stanford 11192011 ABC 180 College Football Penn State at Ohio State 11192011 ABC 30 College Football Texas Tech at Missouri 11192011 ABC 206 College Football USC at Oregon 11192011 ABC 37 College Football Oklahoma at Baylor 11252011 ABC 201 College Football Iowa at Nebraska 11252011 ABC 210 College Football Boston College at Miami 11262011 ABC 216 College Football Ohio State at Michigan 11262011 ABC 204 College Football Oregon State at Oregon 11262011 ABC 217 College Football Notre Dame at Stanford 12032011 ABC 183 College Football Texas at Baylor 12032011 ABC 209 College Football Oklahoma at Oklahoma State 12032011 ABC 237 College Football Conference USA Championship: Southern Mississippi at Houston

Written Direct Testimony of James M. Trautman | E-8

12312011 ABC 222 College Football AutoZone Liberty Bowl: Cincinnati vs. Vanderbilt 3122011 ABC 127 College Basketball 3122011 ABC 126 College Basketball 3132011 ABC 126 College Basketball 6042011 ABC 120 WNBA Basketball Phoenix Mercury at Seattle Storm 7232011 ABC 150 WNBA Basketball All-Star Game CBS 1092011 CBS 150 College Basketball Kansas at Michigan 1152011 CBS 150 College Basketball Maryland vs Villanova 1162011 CBS 150 College Basketball Purdue at West Virginia 1222011 CBS 135 College Basketball Ohio State at Illinois 1222011 CBS 120 College Basketball Stanford at UCLA 1222011 CBS 120 College Basketball Texas at Kansas 1292011 CBS 135 College Basketball Minnesota at Purdue 1302011 CBS 150 College Basketball Duke at St. John's 2052011 CBS 135 College Basketball St. John's at UCLA 2062011 CBS 135 College Basketball Michigan State at Wisconsin 2122011 CBS 135 College Basketball Kentucky at Vanderbilt 2132011 CBS 135 College Basketball Purdue at Illinois 2192011 CBS 135 College Basketball Notre Dame at West Virginia 2202011 CBS 135 College Basketball Ohio State at Purdue 2262011 CBS 120 College Basketball Syracuse at Georgetown 2262011 CBS 135 College Basketball BYU at San Diego State 2262011 CBS 120 College Basketball Florida at Kentucky 2272011 CBS 150 College Basketball Pittsburgh at Louisville 2272011 CBS 105 College Basketball Indiana at Ohio State 3052011 CBS 150 College Basketball Kansas at Missouri 3052011 CBS 105 College Basketball Oregon at Arizona 3052011 CBS 135 College Basketball Villanova at Pittsburgh 3052011 CBS 127 College Basketball Duke at North Carolina 3062011 CBS 135 College Basketball Kentucky at Tennessee 3062011 CBS 105 College Basketball Wisconsin at Ohio State 12032011 CBS 150 College Basketball North Carolina at Kentucky 12102011 CBS 150 College Basketball Duke vs Washington 12172011 CBS 135 College Basketball Butler vs Purdue 12172011 CBS 143 College Basketball Arizona vs Gonzaga 12312011 CBS 150 College Basketball Louisville at Kentucky 3062011 CBS 120 College Basketball Missouri Valley Tournament 3122011 CBS 135 College Basketball Conference USA Tournament: Memphis vs. Texas-El Paso 3122011 CBS 120 College Basketball Big Ten Tournament: Michigan vs. Ohio State 3122011 CBS 135 College Basketball Big Ten Tournament: Michigan State vs. Penn State 3122011 CBS 150 College Basketball Pac-10 Tournament: Arizona vs. Washington

Written Direct Testimony of James M. Trautman | E-9

3132011 CBS 135 College Basketball Atlantic 10 Tournament: Dayton vs. Richmond 3132011 CBS 105 College Basketball Big Ten Tournament: Ohio State vs. Penn State 3172011 CBS 159 College Basketball NCAA Tournament: Clemson vs. West Virginia 3172011 CBS 135 College Basketball NCAA Tournament: Princeton vs. Kentucky 3172011 CBS 150 College Basketball NCAA Tournament: Wofford vs. BYU 3172011 CBS 147 College Basketball NCAA Tournament: Gonzaga vs. St. John's 3182011 CBS 158 College Basketball NCAA Tournament: Oakland vs. Texas 3182011 CBS 161 College Basketball NCAA Tournament: Memphis vs. Arizona 3182011 CBS 168 College Basketball NCAA Tournament: Long Island vs. North Carolina 3182011 CBS 144 College Basketball NCAA Tournament: Georgia vs. Washington 3192011 CBS 158 College Basketball NCAA Tournament: West Virginia vs. Kentucky 3192011 CBS 145 College Basketball NCAA Tournament: UCLA vs. Florida 3192011 CBS 137 College Basketball NCAA Tournament: Morehead State vs. Richmond 3192011 CBS 144 College Basketball NCAA Tournament: Gonzaga vs. BYU 3202011 CBS 141 College Basketball NCAA Tournament: Washington vs. North Carolina 3202011 CBS 143 College Basketball NCAA Tournament: Michigan vs. Duke 3202011 CBS 135 College Basketball NCAA Tournament: George Mason vs. Ohio State 3242011 CBS 144 College Basketball NCAA Tournament: Connecticut vs. San Diego State 3242011 CBS 138 College Basketball NCAA Tournament: Arizona vs. Duke 3252011 CBS 147 College Basketball NCAA Tournament: Marquette vs. North Carolina 3252011 CBS 135 College Basketball NCAA Tournament: Kentucky vs. Ohio State 3262011 CBS 134 College Basketball NCAA Division II Tournament 3262011 CBS 166 College Basketball NCAA Tournament: Butler vs. Florida 3262011 CBS 141 College Basketball NCAA Tournament: Arizona vs. Connecticut 3272011 CBS 155 College Basketball NCAA Tournament: Virginia Commonwealth vs. Kansas 3272011 CBS 142 College Basketball NCAA Tournament: Kentucky vs. North Carolina 4022011 CBS 150 College Basketball NCAA Tournament: Virginia Commonwealth vs. Butler 4022011 CBS 135 College Basketball NCAA Tournament: Kentucky vs. Connecticut 4042011 CBS 142 College Basketball NCAA Tournament: Butler vs. Connecticut 9172011 CBS 240 College Football Tennessee at Florida 9242011 CBS 195 College Football Arkansas at Alabama 11052011 CBS 198 College Football Army at Air Force 11052011 CBS 219 College Football LSU at Alabama 11122011 CBS 210 College Football Florida at South Carolina 11122011 CBS 210 College Football Auburn at Georgia 11192011 CBS 210 College Football Mississippi State at Arkansas 11252011 CBS 210 College Football Arkansas at LSU 11262011 CBS 210 College Football Alabama at Auburn 12032011 CBS 255 College Football SEC Championship: Georgia vs. LSU 12102011 CBS 210 College Football Army vs Navy 12312011 CBS 210 College Football Hyundai Sun Bowl: Georgia Tech vs. Utah 1092011 CBS 180 NFL Football AFC Wild-Card Game: Baltimore Ravens at Kansas City Chiefs

Written Direct Testimony of James M. Trautman | E-10

1152011 CBS 210 NFL Football AFC Divisional Playoff: Baltimore Ravens at Pittsburgh Steelers 1162011 CBS 195 NFL Football AFC Divisional Playoff: New York Jets at New England Patriots 1232011 CBS 195 NFL Football AFC Championship: New York Jets at Pittsburgh Steelers 1022011 CBS 180 NFL Football Pittsburgh Steelers at Cleveland Browns 1022011 CBS 180 NFL Football San Diego Chargers at Denver Broncos 8262011 CBS 200 NFL Football Green Bay Packers at Indianapolis Colts 8272011 CBS 180 NFL Football San Diego Chargers at Arizona Cardinals 9012011 CBS 180 NFL Football San Francisco 49ers at San Diego Chargers 9012011 CBS 180 NFL Football San Francisco 49ers at San Diego Chargers 9112011 CBS 195 NFL Football Pittsburgh Steelers at Baltimore Ravens 9112011 CBS 195 NFL Football Pittsburgh Steelers at Baltimore Ravens 9182011 CBS 180 NFL Football Oakland Raiders at Buffalo Bills 9182011 CBS 15 NFL Football San Diego Chargers at New England Patriots 9182011 CBS 190 NFL Football San Diego Chargers at New England Patriots 9182011 CBS 180 NFL Football Oakland Raiders at Buffalo Bills 9182011 CBS 15 NFL Football San Diego Chargers at New England Patriots 9182011 CBS 190 NFL Football San Diego Chargers at New England Patriots 9252011 CBS 210 NFL Football Kansas City Chiefs at San Diego Chargers 9252011 CBS 210 NFL Football Kansas City Chiefs at San Diego Chargers 11062011 CBS 195 NFL Football New York Jets at Buffalo Bills 11132011 CBS 190 NFL Football Buffalo Bills at Dallas Cowboys 11202011 CBS 180 NFL Football Oakland Raiders at Minnesota Vikings 11202011 CBS 191 NFL Football San Diego Chargers at Chicago Bears 11242011 CBS 195 NFL Football Miami Dolphins at Dallas Cowboys 11272011 CBS 180 NFL Football Buffalo Bills at New York Jets 11272011 CBS 220 NFL Football Denver Broncos at San Diego Chargers 12042011 CBS 195 NFL Football Oakland Raiders at Miami Dolphins 12112011 CBS 180 NFL Football Kansas City Chiefs at New York Jets 12112011 CBS 165 NFL Football Oakland Raiders at Green Bay Packers 12182011 CBS 180 NFL Football Cincinnati Bengals at St. Louis Rams 12182011 CBS 195 NFL Football New England Patriots at Denver Broncos 12242011 CBS 180 NFL Football San Diego Chargers at Detroit Lions 1082011 CBS 135 Women's Coll. Bask. Connecticut at Notre Dame 1082011 CBS 105 Women's Coll. Bask. Ohio State at Iowa NBC 7022011 NBC 90 Beach Volleyball FIVB World Championships 7032011 NBC 90 Beach Volleyball FIVB World Championships 9032011 NBC 330 College Football South Florida at Notre Dame 9032011 NBC 330 College Football South Florida at Notre Dame 9172011 NBC 219 College Football Michigan State at Notre Dame 9172011 NBC 219 College Football Michigan State at Notre Dame 11122011 NBC 210 College Football Maryland vs Notre Dame

Written Direct Testimony of James M. Trautman | E-11

11192011 NBC 220 College Football Boston College at Notre Dame 11262011 NBC 210 College Football Grambling State vs Southern 1082011 NBC 210 NFL Football NFC Wild-Card Game: New Orleans Saints at Seattle Seahawks 1082011 NBC 182 NFL Football AFC Wild-Card Game: New York Jets at Indianapolis Colts 1022011 NBC 197 NFL Football St. Louis Rams at Seattle Seahawks 8212011 NBC 180 NFL Football San Diego Chargers at Dallas Cowboys 8282011 NBC 180 NFL Football New Orleans Saints at Oakland Raiders 9082011 NBC 195 NFL Football New Orleans Saints at Green Bay Packers 9082011 NBC 195 NFL Football New Orleans Saints at Green Bay Packers 9112011 NBC 198 NFL Football Dallas Cowboys at New York Jets 9112011 NBC 198 NFL Football Dallas Cowboys at New York Jets 9182011 NBC 208 NFL Football Philadelphia Eagles at Atlanta Falcons 9182011 NBC 208 NFL Football Philadelphia Eagles at Atlanta Falcons 9252011 NBC 203 NFL Football Pittsburgh Steelers at Indianapolis Colts 9252011 NBC 203 NFL Football Pittsburgh Steelers at Indianapolis Colts 11062011 NBC 209 NFL Football Baltimore Ravens at Pittsburgh Steelers 11132011 NBC 215 NFL Football New England Patriots at New York Jets 11202011 NBC 191 NFL Football Philadelphia Eagles at New York Giants 11272011 NBC 184 NFL Football Pittsburgh Steelers at Kansas City Chiefs 12042011 NBC 198 NFL Football Detroit Lions at New Orleans Saints 12112011 NBC 216 NFL Football New York Giants at Dallas Cowboys 12182011 NBC 173 NFL Football Baltimore Ravens at San Diego Chargers 12252011 NBC 184 NFL Football Chicago Bears at Green Bay Packers 1012011 NBC 180 NHL Hockey 2010 NHL Winter Classic: Boston Bruins vs. Philadelphia Flyers 1012011 NBC 180 NHL Hockey Pittsburgh Penguins vs Washington Capitals 1232011 NBC 155 NHL Hockey Philadelphia Flyers at Chicago Blackhawks 2062011 NBC 150 NHL Hockey Pittsburgh Penguins at Washington Capitals 2132011 NBC 150 NHL Hockey Boston Bruins at Detroit Red Wings 2202011 NBC 173 NHL Hockey Detroit Red Wings at Minnesota Wild 2202011 NBC 177 NHL Hockey Pittsburgh Penguins at Chicago Blackhawks 3132011 NBC 155 NHL Hockey Chicago Blackhawks at Washington Capitals 3202011 NBC 150 NHL Hockey New York Rangers at Pittsburgh Penguins 4032011 NBC 174 NHL Hockey New York Rangers at Philadelphia Flyers 4102011 NBC 150 NHL Hockey Detroit Red Wings at Chicago Blackhawks 4162011 NBC 180 NHL Hockey Phoenix Coyotes at Detroit Red Wings 4172011 NBC 190 NHL Hockey Washington Capitals at New York Rangers 4232011 NBC 180 NHL Hockey New York Rangers at Washington Capitals 4242011 NBC 210 NHL Hockey Philadelphia Flyers at Buffalo Sabres 4302011 NBC 180 NHL Hockey Boston Bruins at Philadelphia Flyers 5012011 NBC 190 NHL Hockey Detroit Red Wings at San Jose Sharks 5212011 NBC 180 NHL Hockey Boston Bruins at Tampa Bay Lightning 5222011 NBC 180 NHL Hockey Vancouver Canucks at San Jose Sharks

Written Direct Testimony of James M. Trautman | E-12

6012011 NBC 180 2011 Final Boston Bruins at Vancouver Canucks 6042011 NBC 185 2011 Final Boston Bruins at Vancouver Canucks 6102011 NBC 180 2011 Final Boston Bruins at Vancouver Canucks 6132011 NBC 192 2011 Final Vancouver Canucks at Boston Bruins 6152011 NBC 186 2011 Final Boston Bruins at Vancouver Canucks 11252011 NBC 180 NHL Hockey Detroit Red Wings at Boston Bruins 9112011 NBC 180 Rugby IRB World Cup 2011: Ireland vs. United States 9112011 NBC 180 Rugby IRB World Cup 2011: Ireland vs. United States 2012 ABC 3102012 ABC 146 College Basketball SEC Tournament: Florida vs. Kentucky 3102012 ABC 124 College Basketball SEC Tournament: Mississippi vs. Vanderbilt 3112012 ABC 136 College Basketball SEC Tournament, Final: Kentucky vs. Vanderbilt 1022012 ABC 259 College Football Outback Bowl: Georgia vs. Michigan State 9012012 ABC 210 College Football Southern Mississippi at Nebraska 9012012 ABC 207 College Football Alabama vs Michigan 9082012 ABC 272 College Football 9082012 ABC 215 College Football Penn State at Virginia 9152012 ABC 225 College Football California at Ohio State 9152012 ABC 216 College Football Notre Dame at Michigan State 9222012 ABC 216 College Football Oregon State at UCLA 9222012 ABC 232 College Football Clemson at Florida State 9292012 ABC 210 College Football Ohio State at Michigan State 9292012 ABC 222 College Football Wisconsin at Nebraska 10062012 ABC 210 College Football Oklahoma at Texas Tech 10062012 ABC 227 College Football Nebraska at Ohio State 10132012 ABC 243 College Football Texas at Oklahoma 10132012 ABC 188 College Football Oregon State at BYU 10202012 ABC 210 College Football Purdue at Ohio State 10202012 ABC 210 College Football Texas Tech at TCU 10202012 ABC 210 College Football Florida State at Miami 10272012 ABC 256 College Football USC at Arizona 10272012 ABC 217 College Football Notre Dame at Oklahoma 11032012 ABC 212 College Football Oklahoma at Iowa State 11032012 ABC 238 College Football Nebraska at Michigan State 11032012 ABC 215 College Football Oklahoma State at Kansas State 11102012 ABC 196 College Football Louisville at Syracuse 11102012 ABC 14 College Football Miami at Virginia 11102012 ABC 222 College Football Penn State at Nebraska 11102012 ABC 203 College Football Notre Dame at Boston College 11172012 ABC 212 College Football Ohio State at Wisconsin 11172012 ABC 219 College Football Stanford at Oregon

Written Direct Testimony of James M. Trautman | E-13

11232012 ABC 197 College Football Nebraska at Iowa 11232012 ABC 210 College Football West Virginia at Iowa State 11242012 ABC 214 College Football Michigan at Ohio State 11242012 ABC 226 College Football Florida at Florida State 12012012 ABC 185 College Football Boise State at Nevada 12012012 ABC 29 College Football Cincinnati at Connecticut 12012012 ABC 207 College Football Texas at Kansas State 1292012 ABC 150 NBA Basketball Chicago Bulls at Miami Heat 2122012 ABC 157 NBA Basketball Chicago Bulls at Boston Celtics 2192012 ABC 162 NBA Basketball Dallas Mavericks at New York Knicks 2192012 ABC 150 NBA Basketball Orlando Magic at Miami Heat 3042012 ABC 178 NBA Basketball New York Knicks at Boston Celtics 3042012 ABC 152 NBA Basketball Miami Heat at Los Angeles Lakers 3112012 ABC 163 NBA Basketball Boston Celtics at Los Angeles Lakers 4012012 ABC 150 NBA Basketball Chicago Bulls at Oklahoma City Thunder 4012012 ABC 158 NBA Basketball Miami Heat at Boston Celtics 4082012 ABC 185 NBA Basketball Chicago Bulls at New York Knicks 4152012 ABC 159 NBA Basketball Miami Heat at New York Knicks 4152012 ABC 173 NBA Basketball Dallas Mavericks at Los Angeles Lakers 4222012 ABC 200 NBA Basketball Oklahoma City Thunder at Los Angeles Lakers 4282012 ABC 161 NBA Basketball New York Knicks at Miami Heat 4292012 ABC 154 NBA Basketball Denver Nuggets at Los Angeles Lakers 5062012 ABC 167 NBA Basketball Chicago Bulls at Philadelphia 76ers 5062012 ABC 175 NBA Basketball Miami Heat at New York Knicks 5132012 ABC 171 NBA Basketball Los Angeles Clippers at Memphis Grizzlies 5132012 ABC 163 NBA Basketball Indiana Pacers at Miami Heat 5192012 ABC 168 NBA Basketball San Antonio Spurs at Los Angeles Clippers 5202012 ABC 168 NBA Basketball Miami Heat at Indiana Pacers 5262012 ABC 167 NBA Basketball Philadelphia 76ers at Boston Celtics 6122012 ABC 162 2012 NBA Finals Miami Heat at Oklahoma City Thunder 6142012 ABC 171 2012 NBA Finals Miami Heat at Oklahoma City Thunder 6172012 ABC 176 2012 NBA Finals Oklahoma City Thunder at Miami Heat 6192012 ABC 162 2012 NBA Finals Oklahoma City Thunder at Miami Heat 6212012 ABC 192 2012 NBA Finals Oklahoma City Thunder at Miami Heat 12252012 ABC 177 NBA Basketball New York Knicks at Los Angeles Lakers 12252012 ABC 166 NBA Basketball Oklahoma City Thunder at Miami Heat 5202012 ABC 119 WNBA Basketball Phoenix Mercury at Minnesota Lynx 10072012 ABC 120 WNBA Basketball Minnesota Lynx at Los Angeles Sparks CBS 1082012 CBS 150 College Basketball Wisconsin at Michigan 1142012 CBS 150 College Basketball Oregon at Arizona 1152012 CBS 120 College Basketball Indiana at Ohio State

Written Direct Testimony of James M. Trautman | E-14

1212012 CBS 138 College Basketball Alabama at Kentucky 1212012 CBS 102 College Basketball Michigan at Arkansas 1212012 CBS 138 College Basketball Kansas at Texas 1282012 CBS 144 College Basketball Texas at Baylor 2042012 CBS 130 College Basketball Vanderbilt at Florida 2052012 CBS 130 College Basketball Michigan at Michigan State 2112012 CBS 127 College Basketball Connecticut at Syracuse 2122012 CBS 139 College Basketball Illinois at Michigan 2182012 CBS 127 College Basketball UNLV at New Mexico 2192012 CBS 127 College Basketball Michigan State at Purdue 2252012 CBS 135 College Basketball Vanderbilt at Kentucky 2252012 CBS 115 College Basketball UCLA at Arizona 2252012 CBS 145 College Basketball Missouri at Kansas 2262012 CBS 135 College Basketball Pittsburgh at Louisville 2262012 CBS 112 College Basketball Wisconsin at Ohio State 3032012 CBS 130 College Basketball Memphis at Tulsa 3032012 CBS 125 College Basketball LSU at Auburn 3032012 CBS 113 College Basketball Louisville at Syracuse 3042012 CBS 150 College Basketball Missouri Valley Tournament, Final: Illinois State vs. Creighton 3042012 CBS 90 College Basketball Kentucky at Florida 3042012 CBS 125 College Basketball Ohio State at Michigan State 3102012 CBS 130 College Basketball Conference USA Tournament: Marshall vs. Memphis 3102012 CBS 120 College Basketball Big Ten Tournament: Michigan State vs. Wisconsin 3102012 CBS 130 College Basketball Big Ten Tournament: Michigan vs. Ohio State 3102012 CBS 125 College Basketball Pac-12 Tournament: Arizona vs. Colorado 3112012 CBS 135 College Basketball Atlantic 10 Tournament, Final: Xavier vs. St. Bonaventure 3112012 CBS 125 College Basketball Big Ten Tournament, Final: Michigan State vs. Ohio State 3242012 CBS 134 College Basketball NCAA Division II Tournament: Montevallo vs. Western Washington 3152012 CBS 165 2012 NCAA Tourn. Colorado State vs. Murray State 3152012 CBS 165 2012 NCAA Tourn. BYU vs. Marquette 3152012 CBS 168 2012 NCAA Tourn. VCU vs. Wichita State 3152012 CBS 132 2012 NCAA Tourn. New Mexico State vs. Indiana 3162012 CBS 171 2012 NCAA Tourn. Texas vs. Cincinnati 3162012 CBS 140 2012 NCAA Tourn. St. Bonaventure vs. Florida State 3162012 CBS 188 2012 NCAA Tourn. Lehigh vs. Duke 3162012 CBS 136 2012 NCAA Tourn. Xavier vs. Notre Dame 3172012 CBS 173 2012 NCAA Tourn. Kansas State vs. Syracuse 3172012 CBS 143 2012 NCAA Tourn. Gonzaga vs. Ohio State 3172012 CBS 151 2012 NCAA Tourn. Murray State vs. Marquette 3172012 CBS 146 2012 NCAA Tourn. Iowa State vs. Kentucky 3182012 CBS 153 2012 NCAA Tourn. North Carolina State vs. Georgetown 3182012 CBS 154 2012 NCAA Tourn. St. Louis vs. Michigan State

Written Direct Testimony of James M. Trautman | E-15

3182012 CBS 123 2012 NCAA Tourn. Creighton vs. North Carolina 3222012 CBS 159 2012 NCAA Tourn. Wisconsin vs. Syracuse 3222012 CBS 141 2012 NCAA Tourn. Cincinnati vs. Ohio State 3232012 CBS 179 2012 NCAA Tourn. Xavier vs. Baylor 3232012 CBS 148 2012 NCAA Tourn. Indiana vs. Kentucky 3242012 CBS 155 2012 NCAA Tourn. Florida vs. Louisville 3242012 CBS 153 2012 NCAA Tourn. Ohio State vs. Syracuse 3252012 CBS 180 2012 NCAA Tourn. Baylor vs. Kentucky 3252012 CBS 132 2012 NCAA Tourn. Kansas vs. North Carolina 3312012 CBS 177 2012 NCAA Tourn. Louisville vs. Kentucky 3312012 CBS 150 2012 NCAA Tourn. Kansas vs. Ohio State 4022012 CBS 195 2012 NCAA Tourn. Final: Kansas vs. Kentucky 12012012 CBS 150 College Basketball Baylor at Kentucky 12082012 CBS 150 College Basketball Arkansas at Michigan 12152012 CBS 163 College Basketball Crossroads Classic: Butler vs. Indiana 12222012 CBS 150 College Basketball Kansas at Ohio State 12292012 CBS 138 College Basketball Kentucky at Louisville 9012012 CBS 213 College Football Navy vs Notre Dame 9152012 CBS 200 College Football Alabama at Arkansas 9222012 CBS 194 College Football Missouri at South Carolina 9292012 CBS 243 College Football Tennessee at Georgia 10062012 CBS 213 College Football Navy at Air Force 10062012 CBS 217 College Football LSU at Florida 10132012 CBS 230 College Football Alabama at Missouri 10202012 CBS 213 College Football South Carolina at Florida 10272012 CBS 237 College Football Florida vs Georgia 11032012 CBS 211 College Football Mississippi at Georgia 11032012 CBS 235 College Football Alabama at LSU 11102012 CBS 218 College Football Arkansas at South Carolina 11102012 CBS 221 College Football Texas A&M at Alabama 11172012 CBS 238 College Football Mississippi at LSU 11232012 CBS 234 College Football LSU at Arkansas 11242012 CBS 201 College Football Auburn at Alabama 12012012 CBS 240 College Football SEC Championship: Alabama vs. Georgia 12082012 CBS 217 College Football Army vs Navy 12312012 CBS 232 College Football Hyundai Sun Bowl: Georgia Tech vs. USC 1012012 CBS 180 NFL Football Tennessee Titans at Houston Texans 1012012 CBS 195 NFL Football Kansas City Chiefs at Denver Broncos 1082012 CBS 223 NFL Football AFC Wild-Card Game: Pittsburgh Steelers at Denver Broncos 1142012 CBS 195 NFL Football AFC Divisional Playoff: Denver Broncos at New England Patriots 1152012 CBS 195 NFL Football AFC Divisional Playoff: Houston Texans at Baltimore Ravens 1222012 CBS 188 NFL Football AFC Championship: Baltimore Ravens at New England Patriots

Written Direct Testimony of James M. Trautman | E-16

8242012 CBS 199 NFL Football Chicago Bears at New York Giants 8252012 CBS 201 NFL Football Houston Texans at New Orleans Saints 9092012 CBS 180 NFL Football Miami Dolphins at Houston Texans 9162012 CBS 181 NFL Football Houston Texans at Jacksonville Jaguars 9162012 CBS 192 NFL Football New York Jets at Pittsburgh Steelers 9232012 CBS 243 NFL Football Cincinnati Bengals at Washington Redskins 9232012 CBS 182 NFL Football Houston Texans at Denver Broncos 9302012 CBS 175 NFL Football Tennessee Titans at Houston Texans 10072012 CBS 187 NFL Football Cleveland Browns at New York Giants 10072012 CBS 185 NFL Football Denver Broncos at New England Patriots 10142012 CBS 180 NFL Football Indianapolis Colts at New York Jets 10212012 CBS 190 NFL Football Baltimore Ravens at Houston Texans 10212012 CBS 207 NFL Football New York Jets at New England Patriots 10282012 CBS 192 NFL Football New England Patriots vs St. Louis Rams 11042012 CBS 198 NFL Football Buffalo Bills at Houston Texans 11042012 CBS 185 NFL Football Pittsburgh Steelers at New York Giants 11112012 CBS 190 NFL Football Denver Broncos at Carolina Panthers 11182012 CBS 232 NFL Football Jacksonville Jaguars at Houston Texans 11182012 CBS 174 NFL Football San Diego Chargers at Denver Broncos 11222012 CBS 242 NFL Football Houston Texans at Detroit Lions 11252012 CBS 189 NFL Football Denver Broncos at Kansas City Chiefs 12022012 CBS 210 NFL Football Houston Texans at Tennessee Titans 12022012 CBS 184 NFL Football Pittsburgh Steelers at Baltimore Ravens 12092012 CBS 204 NFL Football San Diego Chargers at Pittsburgh Steelers 12162012 CBS 183 NFL Football Indianapolis Colts at Houston Texans 12162012 CBS 208 NFL Football Pittsburgh Steelers at Dallas Cowboys 12232012 CBS 196 NFL Football Cincinnati Bengals at Pittsburgh Steelers 12302012 CBS 184 NFL Football Houston Texans at Indianapolis Colts 12302012 CBS 180 NFL Football Kansas City Chiefs at Denver Broncos 1072012 CBS 135 Women's Coll. Bask. Michigan State at Penn State 1072012 CBS 135 Women's Coll. Bask. Connecticut at Notre Dame NBC 9082012 NBC 230 College Football Purdue at Notre Dame 9222012 NBC 210 College Football Michigan at Notre Dame 10062012 NBC 210 College Football Miami vs Notre Dame 10132012 NBC 228 College Football Stanford at Notre Dame 10202012 NBC 210 College Football BYU at Notre Dame 11032012 NBC 270 College Football Pittsburgh at Notre Dame 11172012 NBC 210 College Football Wake Forest at Notre Dame 11242012 NBC 240 College Football Grambling State vs Southern 9152012 NBC 150 MLS Soccer Seattle Sounders FC at Portland Timbers 10062012 NBC 150 MLS Soccer Chicago Fire at New York Red Bulls

Written Direct Testimony of James M. Trautman | E-17

10272012 NBC 150 MLS Soccer New York Red Bulls at Philadelphia Union 1012012 NBC 192 NFL Football Dallas Cowboys at New York Giants 1072012 NBC 195 NFL Football AFC Wild-Card Game: Cincinnati Bengals at Houston Texans 1072012 NBC 202 NFL Football NFC Wild-Card Game: Detroit Lions at New Orleans Saints 1292012 NBC 240 2012 Pro Bowl 8192012 NBC 206 NFL Football Indianapolis Colts at Pittsburgh Steelers 8262012 NBC 180 NFL Football Carolina Panthers at New York Jets 9052012 NBC 180 NFL Football Dallas Cowboys at New York Giants 9092012 NBC 174 NFL Football Pittsburgh Steelers at Denver Broncos 9162012 NBC 200 NFL Football Detroit Lions at San Francisco 49ers 9232012 NBC 218 NFL Football New England Patriots at Baltimore Ravens 9302012 NBC 193 NFL Football New York Giants at Philadelphia Eagles 10072012 NBC 201 NFL Football San Diego Chargers at New Orleans Saints 10142012 NBC 193 NFL Football Green Bay Packers at Houston Texans 10212012 NBC 185 NFL Football Pittsburgh Steelers at Cincinnati Bengals 10282012 NBC 188 NFL Football New Orleans Saints at Denver Broncos 11042012 NBC 179 NFL Football Dallas Cowboys at Atlanta Falcons 11112012 NBC 188 NFL Football Houston Texans at Chicago Bears 11182012 NBC 189 NFL Football Baltimore Ravens at Pittsburgh Steelers 11222012 NBC 190 NFL Football New England Patriots at New York Jets 11252012 NBC 185 NFL Football Green Bay Packers at New York Giants 12022012 NBC 192 NFL Football Philadelphia Eagles at Dallas Cowboys 12092012 NBC 192 NFL Football Detroit Lions at Green Bay Packers 12162012 NBC 11 NFL Football San Francisco 49ers at New England Patriots 12162012 NBC 199 NFL Football San Francisco 49ers at New England Patriots 12232012 NBC 194 NFL Football San Francisco 49ers at Seattle Seahawks 12302012 NBC 190 NFL Football Dallas Cowboys at Washington Redskins 1022012 NBC 188 NHL Hockey New York Rangers vs Philadelphia Flyers 1142012 NBC 159 NHL Hockey Chicago Blackhawks at Detroit Red Wings 1222012 NBC 163 NHL Hockey Washington Capitals at Pittsburgh Penguins 2122012 NBC 150 NHL Hockey Washington Capitals at New York Rangers 2192012 NBC 9 NHL Hockey Pittsburgh Penguins at Buffalo Sabres 2192012 NBC 155 NHL Hockey San Jose Sharks at Detroit Red Wings 2192012 NBC 160 NHL Hockey Boston Bruins at Minnesota Wild 3042012 NBC 164 NHL Hockey Boston Bruins at New York Rangers 3112012 NBC 150 NHL Hockey Boston Bruins at Pittsburgh Penguins 3182012 NBC 171 NHL Hockey Pittsburgh Penguins at Philadelphia Flyers 4012012 NBC 174 NHL Hockey Philadelphia Flyers at Pittsburgh Penguins 4072012 NBC 165 NHL Hockey Chicago Blackhawks at Detroit Red Wings 4142012 NBC 228 NHL Hockey Washington Capitals at Boston Bruins 4152012 NBC 180 NHL Hockey Nashville Predators at Detroit Red Wings 4152012 NBC 198 NHL Hockey Pittsburgh Penguins at Philadelphia Flyers

Written Direct Testimony of James M. Trautman | E-18

4212012 NBC 180 NHL Hockey Washington Capitals at Boston Bruins 4222012 NBC 180 NHL Hockey Pittsburgh Penguins at Philadelphia Flyers 4222012 NBC 210 NHL Hockey Boston Bruins at Washington Capitals 4282012 NBC 180 NHL Hockey Washington Capitals at New York Rangers 4292012 NBC 210 NHL Hockey New Jersey Devils at Philadelphia Flyers 5052012 NBC 160 NHL Hockey New York Rangers at Washington Capitals 5062012 NBC 180 NHL Hockey St. Louis Blues at Los Angeles Kings 5192012 NBC 210 NHL Hockey New York Rangers at New Jersey Devils 5202012 NBC 180 NHL Hockey Phoenix Coyotes at Los Angeles Kings 5302012 NBC 199 2012 Final Los Angeles Kings at New Jersey Devils 6022012 NBC 211 2012 Final Los Angeles Kings at New Jersey Devils 6092012 NBC 180 2012 Final Los Angeles Kings at New Jersey Devils 6112012 NBC 187 2012 Final New Jersey Devils at Los Angeles Kings 2112012 NBC 150 Rugby USA Sevens 2122012 NBC 90 Rugby USA Sevens 6022012 NBC 90 College Rugby USA Sevens Championship 6032012 NBC 120 College Rugby USA Sevens Championship 6302012 NBC 150 Women's Soccer Friendly: United States vs. Canada 9012012 NBC 150 Women's Soccer International Friendly: United States vs. Costa Rica 2013 ABC 3162013 ABC 124 College Basketball SEC Tournament: Alabama vs. Florida 3162013 ABC 135 College Basketball SEC Tournament: Mississippi vs. Vanderbilt 3172013 ABC 136 College Basketball SEC Tournament: Florida vs. Mississippi 1012013 ABC 225 College Football Capital One Bowl: Georgia vs. Nebraska 8312013 ABC 210 College Football Mississippi State vs Oklahoma State 8312013 ABC 244 College Football Georgia at Clemson 9072013 ABC 201 College Football Oregon at Virginia 9142013 ABC 215 College Football UCLA at Nebraska 9142013 ABC 198 College Football Tennessee at Oregon 9142013 ABC 219 College Football Notre Dame at Purdue 9212013 ABC 210 College Football Utah State at USC 9212013 ABC 228 College Football Kansas State at Texas 9282013 ABC 232 College Football South Carolina at Central Florida 9282013 ABC 192 College Football Florida State at Boston College 9282013 ABC 223 College Football Wisconsin at Ohio State 10052013 ABC 215 College Football Minnesota at Michigan 10052013 ABC 229 College Football Ohio State at Northwestern 10122013 ABC 218 College Football Oklahoma at Texas 10122013 ABC 190 College Football Northwestern at Wisconsin 10122013 ABC 12 College Football Boston College at Clemson 10192013 ABC 200 College Football UCLA at Stanford

Written Direct Testimony of James M. Trautman | E-19

10192013 ABC 10 College Football Iowa at Ohio State 10192013 ABC 228 College Football Florida State at Clemson 10262013 ABC 212 College Football North Carolina State at Florida State 10262013 ABC 221 College Football Penn State at Ohio State 11022013 ABC 211 College Football Wisconsin at Iowa 11022013 ABC 209 College Football Michigan at Michigan State 11022013 ABC 215 College Football Miami at Florida State 11092013 ABC 210 College Football Florida State at Wake Forest 11092013 ABC 197 College Football Nebraska at Michigan 11092013 ABC 225 College Football Notre Dame at Pittsburgh 11162013 ABC 227 College Football Michigan State at Nebraska 11162013 ABC 210 College Football Stanford at USC 11232013 ABC 201 College Football Oregon at Arizona 11232013 ABC 229 College Football Baylor at Oklahoma State 11292013 ABC 214 College Football Iowa at Nebraska 11292013 ABC 206 College Football Miami at Pittsburgh 11302013 ABC 221 College Football Ohio State at Michigan 11302013 ABC 218 College Football Georgia at Georgia Tech 11302013 ABC 205 College Football UCLA at USC 12072013 ABC 214 College Football ACC Championship: Duke vs. Florida State 12072013 ABC 222 College Football Oklahoma at Oklahoma State 12212013 ABC 226 College Football Royal Purple Las Vegas Bowl: Fresno State vs. USC 1272013 ABC 194 NBA Basketball Miami Heat at Boston Celtics 1272013 ABC 124 NBA Basketball Oklahoma City Thunder at Los Angeles Lakers 2102013 ABC 153 NBA Basketball Los Angeles Clippers at New York Knicks 2102013 ABC 161 NBA Basketball Los Angeles Lakers at Miami Heat 2242013 ABC 156 NBA Basketball Los Angeles Lakers at Dallas Mavericks 3032013 ABC 161 NBA Basketball Miami Heat at New York Knicks 3032013 ABC 173 NBA Basketball Oklahoma City Thunder at Los Angeles Clippers 3102013 ABC 165 NBA Basketball Boston Celtics at Oklahoma City Thunder 3102013 ABC 147 NBA Basketball Chicago Bulls at Los Angeles Lakers 3172013 ABC 159 NBA Basketball New York Knicks at Los Angeles Clippers 4072013 ABC 157 NBA Basketball New York Knicks at Oklahoma City Thunder 4072013 ABC 154 NBA Basketball Los Angeles Lakers at Los Angeles Clippers 4142013 ABC 169 NBA Basketball Chicago Bulls at Miami Heat 4202013 ABC 161 NBA Basketball Boston Celtics at New York Knicks 4212013 ABC 156 NBA Basketball Los Angeles Lakers at San Antonio Spurs 4282013 ABC 191 NBA Basketball New York Knicks at Boston Celtics 4282013 ABC 119 NBA Basketball Miami Heat at Milwaukee Bucks 5052013 ABC 179 NBA Basketball Memphis Grizzlies at Oklahoma City Thunder 5052013 ABC 157 NBA Basketball Indiana Pacers at New York Knicks 5112013 ABC 170 NBA Basketball New York Knicks at Indiana Pacers

Written Direct Testimony of James M. Trautman | E-20

5122013 ABC 193 NBA Basketball San Antonio Spurs at Golden State Warriors 5192013 ABC 155 NBA Basketball Memphis Grizzlies at San Antonio Spurs 6062013 ABC 159 2013 NBA Finals San Antonio Spurs at Miami Heat 6092013 ABC 180 2013 NBA Finals San Antonio Spurs at Miami Heat 6112013 ABC 158 2013 NBA Finals Miami Heat at San Antonio Spurs 6132013 ABC 169 2013 NBA Finals Miami Heat at San Antonio Spurs 6162013 ABC 180 2013 NBA Finals Miami Heat at San Antonio Spurs 6182013 ABC 199 2013 NBA Finals San Antonio Spurs at Miami Heat 6202013 ABC 172 2013 NBA Finals San Antonio Spurs at Miami Heat 12252013 ABC 150 NBA Basketball Oklahoma City Thunder at New York Knicks 12252013 ABC 180 NBA Basketball Miami Heat at Los Angeles Lakers 6082013 ABC 120 WNBA Basketball Phoenix Mercury at Indiana Fever 7272013 ABC 150 WNBA Basketball Boost Mobile All-Star Game: West vs. East CBS 8172013 CBS 159 Arena Football Arena Bowl XXVI: Philadelphia Soul vs. Arizona Rattlers 1062013 CBS 136 College Basketball Temple at Kansas 1132013 CBS 150 College Basketball Michigan at Ohio State 1192013 CBS 132 College Basketball Kansas at Texas 1192013 CBS 138 College Basketball Oregon at UCLA 1262013 CBS 124 College Basketball Maryland at Duke 1272013 CBS 127 College Basketball Michigan State at Indiana 2022013 CBS 125 College Basketball Miami at North Carolina State 2022013 CBS 5 College Basketball St. John's at Georgetown 2092013 CBS 135 College Basketball Mississippi at Missouri 2102013 CBS 133 College Basketball Indiana at Ohio State 2162013 CBS 141 College Basketball Kentucky at Tennessee 2172013 CBS 124 College Basketball Ohio State at Wisconsin 2232013 CBS 164 College Basketball South Carolina at Georgia 2232013 CBS 83 College Basketball Georgetown at Syracuse 2242013 CBS 127 College Basketball Cincinnati at Notre Dame 2242013 CBS 136 College Basketball Michigan State at Ohio State 3022013 CBS 131 College Basketball Louisville at Syracuse 3022013 CBS 118 College Basketball West Virginia at Kansas 3022013 CBS 141 College Basketball Kentucky at Arkansas 3032013 CBS 125 College Basketball Florida State at North Carolina 3032013 CBS 137 College Basketball Michigan State at Michigan 3092013 CBS 129 College Basketball Florida at Kentucky 3092013 CBS 120 College Basketball UCLA at Washington 3092013 CBS 120 College Basketball Notre Dame at Louisville 3102013 CBS 135 College Basketball Missouri Valley Tournament: Creighton vs. Wichita State 3102013 CBS 130 College Basketball VCU at Temple 3102013 CBS 117 College Basketball Indiana at Michigan

Written Direct Testimony of James M. Trautman | E-21

3162013 CBS 177 College Basketball Conference USA Tournament: Memphis vs. Southern Mississippi 3162013 CBS 83 College Basketball Big Ten Tournament: Indiana vs. Wisconsin 3162013 CBS 128 College Basketball Big Ten Tournament: Michigan State vs. Ohio State 3162013 CBS 120 College Basketball Mountain West Tournament: New Mexico vs. UNLV 3172013 CBS 145 College Basketball Atlantic 10 Tournament, Final: Teams TBA 3172013 CBS 120 College Basketball Big Ten Tournament: Ohio State vs. Wisconsin 3212013 CBS 138 2013 NCAA Tourn. Valparaiso vs. Michigan State 3212013 CBS 152 2013 NCAA Tourn. St. Mary's vs. Memphis 3212013 CBS 129 2013 NCAA Tourn. South Dakota State vs. Michigan 3212013 CBS 132 2013 NCAA Tourn. Akron vs. VCU 3222013 CBS 152 2013 NCAA Tourn. Albany (N.Y.) vs. Duke 3222013 CBS 161 2013 NCAA Tourn. Cincinnati vs. Creighton 3222013 CBS 153 2013 NCAA Tourn. Iona vs. Ohio State 3222013 CBS 125 2013 NCAA Tourn. Iowa State vs. Notre Dame 3232013 CBS 140 2013 NCAA Tourn. VCU vs. Michigan 3232013 CBS 157 2013 NCAA Tourn. Memphis vs. Michigan State 3232013 CBS 145 2013 NCAA Tourn. Colorado State vs. Louisville 3232013 CBS 161 2013 NCAA Tourn. Butler vs. Marquette 3242013 CBS 161 2013 NCAA Tourn. Iowa State vs. Ohio State 3242013 CBS 141 2013 NCAA Tourn. Temple vs. Indiana 3242013 CBS 141 2013 NCAA Tourn. North Carolina vs. Kansas 3282013 CBS 143 2013 NCAA Tourn. Marquette vs. Miami 3282013 CBS 143 2013 NCAA Tourn. Syracuse vs. Indiana 3292013 CBS 150 2013 NCAA Tourn. Oregon vs. Louisville 3292013 CBS 147 2013 NCAA Tourn. Michigan State vs. Duke 3302013 CBS 138 2013 NCAA Tourn. Regional Final: Syracuse vs. Marquette 3302013 CBS 161 2013 NCAA Tourn. Regional Final: Wichita State vs. Ohio State 3312013 CBS 126 2013 NCAA Tourn. Michigan vs. Florida 3312013 CBS 159 2013 NCAA Tourn. Duke vs. Louisville 4062013 CBS 167 2013 NCAA Tourn. Wichita State vs. Louisville 4062013 CBS 147 2013 NCAA Tourn. Michigan vs. Syracuse 4082013 CBS 154 2013 NCAA Tourn. Michigan vs. Louisville 4072013 CBS 135 College Basketball NCAA Division II Tournament, Final: Drury vs. Metro State 4072013 CBS 120 College Basketball 2013 Reese's All-Star Game 12072013 CBS 120 College Basketball UCLA at Missouri 12142013 CBS 150 College Basketball Arizona at Michigan 12212013 CBS 150 College Basketball Michigan State at Texas 12282013 CBS 143 College Basketball Villanova at Syracuse 12282013 CBS 134 College Basketball Louisville at Kentucky 9142013 CBS 232 College Football Alabama at Texas A&M 9212013 CBS 215 College Football Tennessee at Florida 9282013 CBS 240 College Football LSU at Georgia

Written Direct Testimony of James M. Trautman | E-22

10052013 CBS 210 College Football Air Force at Navy 10052013 CBS 248 College Football Georgia at Tennessee 10122013 CBS 201 College Football Florida at LSU 10192013 CBS 233 College Football Georgia at Vanderbilt 10192013 CBS 223 College Football Auburn at Texas A&M 10262013 CBS 202 College Football Tennessee at Alabama 11022013 CBS 234 College Football Florida vs Georgia 11092013 CBS 246 College Football Mississippi State at Texas A&M 11092013 CBS 218 College Football LSU at Alabama 11162013 CBS 254 College Football Georgia at Auburn 11232013 CBS 241 College Football Texas A&M at LSU 11292013 CBS 227 College Football Arkansas at LSU 11302013 CBS 245 College Football Alabama at Auburn 12072013 CBS 250 College Football SEC Championship: Auburn vs. Missouri 12072013 CBS 225 College Football Mountain West Championship: Utah State at Fresno State 12142013 CBS 224 College Football Army vs Navy 12312013 CBS 234 College Football Hyundai Sun Bowl: UCLA vs. Virginia Tech 1062013 CBS 195 NFL Football AFC Wild-Card Game: Indianapolis Colts at Baltimore Ravens 1122013 CBS 257 NFL Football AFC Divisional Playoff: Baltimore Ravens at Denver Broncos 1132013 CBS 196 NFL Football AFC Divisional Playoff: Houston Texans at New England Patriots 1202013 CBS 191 NFL Football AFC Championship: Baltimore Ravens at New England Patriots 8082013 CBS 181 NFL Football Seattle Seahawks at San Diego Chargers 8232013 CBS 196 NFL Football Seattle Seahawks at Green Bay Packers 8242013 CBS 180 NFL Football San Diego Chargers at Arizona Cardinals 8292013 CBS 180 NFL Football San Francisco 49ers at San Diego Chargers 9082013 CBS 168 NFL Football Oakland Raiders at Indianapolis Colts 9152013 CBS 195 NFL Football San Diego Chargers at Philadelphia Eagles 9152013 CBS 201 NFL Football Denver Broncos at New York Giants 9222013 CBS 184 NFL Football San Diego Chargers at Tennessee Titans 9222013 CBS 218 NFL Football Indianapolis Colts at San Francisco 49ers 9292013 CBS 181 NFL Football Pittsburgh Steelers at Minnesota Vikings 10062013 CBS 176 NFL Football New England Patriots at Cincinnati Bengals 10062013 CBS 195 NFL Football Denver Broncos at Dallas Cowboys 10132013 CBS 199 NFL Football Oakland Raiders at Kansas City Chiefs 10202013 CBS 178 NFL Football San Diego Chargers at Jacksonville Jaguars 10202013 CBS 180 NFL Football Houston Texans at Kansas City Chiefs 10272013 CBS 189 NFL Football Miami Dolphins at New England Patriots 11032013 CBS 205 NFL Football San Diego Chargers at Washington Redskins 11032013 CBS 207 NFL Football Pittsburgh Steelers at New England Patriots 11102013 CBS 221 NFL Football Oakland Raiders at New York Giants 11102013 CBS 179 NFL Football Denver Broncos at San Diego Chargers 11172013 CBS 181 NFL Football San Diego Chargers at Miami Dolphins

Written Direct Testimony of James M. Trautman | E-23

11242013 CBS 213 NFL Football San Diego Chargers at Kansas City Chiefs 11282013 CBS 210 NFL Football Oakland Raiders at Dallas Cowboys 12012013 CBS 173 NFL Football New England Patriots at Houston Texans 12012013 CBS 202 NFL Football Denver Broncos at Kansas City Chiefs 12082013 CBS 182 NFL Football Kansas City Chiefs at Washington Redskins 12152013 CBS 177 NFL Football New England Patriots at Miami Dolphins 12222013 CBS 205 NFL Football Denver Broncos at Houston Texans 12222013 CBS 185 NFL Football Oakland Raiders at San Diego Chargers 12292013 CBS 185 NFL Football Baltimore Ravens at Cincinnati Bengals 12292013 CBS 196 NFL Football Kansas City Chiefs at San Diego Chargers 2032013 CBS 255 Super Bowl XLVII Baltimore Ravens vs. San Francisco 49ers 1052013 CBS 135 Women's Coll. Bask. Purdue at Nebraska 1052013 CBS 113 Women's Coll. Bask. Notre Dame at Connecticut NBC 7272013 NBC 76 Beach Volleyball World Series 7282013 NBC 90 Beach Volleyball World Series 8312013 NBC 210 College Football Temple at Notre Dame 9212013 NBC 224 College Football Michigan State at Notre Dame 9282013 NBC 224 College Football Oklahoma at Notre Dame 10052013 NBC 237 College Football Arizona State vs Notre Dame 10192013 NBC 214 College Football USC at Notre Dame 11022013 NBC 210 College Football Navy at Notre Dame 11232013 NBC 210 College Football BYU at Notre Dame 11302013 NBC 207 College Football Bayou Classic: Grambling State vs. Southern 3162013 NBC 150 MLS Soccer D.C. United at New York Red Bulls 9292013 NBC 150 MLS Soccer LA Galaxy at Portland Timbers 10192013 NBC 120 MLS Soccer Seattle Sounders FC at FC Dallas 10272013 NBC 150 MLS Soccer Houston Dynamo at D.C. United 11032013 NBC 150 MLS Soccer Eastern Conference Semifinal, Leg 1 11092013 NBC 180 MLS Soccer Eastern Conference Championship, Leg 1 1052013 NBC 189 NFL Football AFC Wild-Card Game: Cincinnati Bengals at Houston Texans 1052013 NBC 177 NFL Football NFC Wild-Card Game: Minnesota Vikings at Green Bay Packers 8042013 NBC 202 NFL Football Hall of Fame Game: Dallas Cowboys vs. Miami Dolphins 8252013 NBC 182 NFL Football Minnesota Vikings at San Francisco 49ers 9052013 NBC 268 NFL Football Baltimore Ravens at Denver Broncos 9082013 NBC 220 NFL Football New York Giants at Dallas Cowboys 9152013 NBC 256 NFL Football San Francisco 49ers at Seattle Seahawks 9222013 NBC 219 NFL Football Chicago Bears at Pittsburgh Steelers 9292013 NBC 206 NFL Football New England Patriots at Atlanta Falcons 10062013 NBC 178 NFL Football Houston Texans at San Francisco 49ers 10132013 NBC 193 NFL Football Washington Redskins at Dallas Cowboys 10202013 NBC 229 NFL Football Denver Broncos at Indianapolis Colts

Written Direct Testimony of James M. Trautman | E-24

10272013 NBC 180 NFL Football Green Bay Packers at Minnesota Vikings 11032013 NBC 198 NFL Football Indianapolis Colts at Houston Texans 11102013 NBC 199 NFL Football Dallas Cowboys at New Orleans Saints 11172013 NBC 223 NFL Football Kansas City Chiefs at Denver Broncos 11242013 NBC 238 NFL Football Denver Broncos at New England Patriots 11282013 NBC 195 NFL Football Pittsburgh Steelers at Baltimore Ravens 12012013 NBC 181 NFL Football New York Giants at Washington Redskins 12082013 NBC 183 NFL Football Carolina Panthers at New Orleans Saints 12152013 NBC 192 NFL Football Cincinnati Bengals at Pittsburgh Steelers 12222013 NBC 189 NFL Football Chicago Bears at Philadelphia Eagles 12292013 NBC 187 NFL Football Philadelphia Eagles at Dallas Cowboys 1192013 NBC 180 NHL Hockey Chicago Blackhawks at Los Angeles Kings 1202013 NBC 164 NHL Hockey Philadelphia Flyers at Buffalo Sabres 2032013 NBC 163 NHL Hockey Pittsburgh Penguins at Washington Capitals 2102013 NBC 157 NHL Hockey Los Angeles Kings at Detroit Red Wings 2172013 NBC 177 NHL Hockey Pittsburgh Penguins at Buffalo Sabres 2172013 NBC 152 NHL Hockey Los Angeles Kings at Chicago Blackhawks 3032013 NBC 163 NHL Hockey Chicago Blackhawks at Detroit Red Wings 3102013 NBC 154 NHL Hockey New York Rangers at Washington Capitals 3172013 NBC 152 NHL Hockey Boston Bruins at Pittsburgh Penguins 3312013 NBC 154 NHL Hockey Chicago Blackhawks at Detroit Red Wings 4072013 NBC 156 NHL Hockey St. Louis Blues at Detroit Red Wings 4142013 NBC 157 NHL Hockey Chicago Blackhawks at St. Louis Blues 4212013 NBC 162 NHL Hockey New Jersey Devils at New York Rangers 4272013 NBC 159 NHL Hockey New Jersey Devils at New York Rangers 5042013 NBC 190 NHL Hockey New York Rangers at Washington Capitals 5052013 NBC 196 NHL Hockey Pittsburgh Penguins at New York Islanders 5052013 NBC 183 NHL Hockey Chicago Blackhawks at Minnesota Wild 5182013 NBC 156 NHL Hockey Detroit Red Wings at Chicago Blackhawks 5192013 NBC 180 NHL Hockey New York Rangers at Boston Bruins 5252013 NBC 180 NHL Hockey Detroit Red Wings at Chicago Blackhawks 6012013 NBC 180 NHL Hockey Boston Bruins at Pittsburgh Penguins 6082013 NBC 254 NHL Hockey Los Angeles Kings at Chicago Blackhawks 6122013 NBC 308 2013 Final Boston Bruins at Chicago Blackhawks 6192013 NBC 219 2013 Final Chicago Blackhawks at Boston Bruins 6222013 NBC 182 2013 Final Boston Bruins at Chicago Blackhawks 6242013 NBC 194 2013 Final Chicago Blackhawks at Boston Bruins 11292013 NBC 180 NHL Hockey New York Rangers at Boston Bruins 8172013 NBC 124 EPL Soccer Swansea City AFC vs. Manchester United FC 8242013 NBC 122 EPL Soccer Aston Villa FC vs. Liverpool FC 8312013 NBC 150 EPL Soccer Crystal Palace FC vs. Sunderland AFC 9142013 NBC 121 EPL Soccer Everton FC vs. Chelsea FC

Written Direct Testimony of James M. Trautman | E-25

9282013 NBC 120 EPL Soccer Swansea City AFC vs. Arsenal FC 10192013 NBC 120 EPL Soccer West Ham United FC vs. Manchester City FC 11022013 NBC 120 EPL Soccer Arsenal FC vs. Liverpool FC 11092013 NBC 121 EPL Soccer Norwich City FC vs. West Ham United FC 11232013 NBC 120 EPL Soccer West Ham United FC vs. Chelsea FC 11302013 NBC 123 EPL Soccer Newcastle United FC vs. West Bromwich Albion FC 12212013 NBC 120 EPL Soccer 12282013 NBC 124 EPL Soccer Cardiff City FC vs. Sunderland AFC 6012013 NBC 88 College Rugby Collegiate Sevens Championship: Teams TBA 6022013 NBC 120 College Rugby Collegiate Sevens Championship: Teams TBA 2092013 NBC 120 Rugby USA Sevens 2102013 NBC 120 Rugby USA Sevens 10202013 NBC 150 Women's Soccer International Friendly: United States vs. Australia 11102013 NBC 150 Women's Soccer International Friendly: United States vs. Brazil

Source: Bortz Media compilation based on Gracenote programming data.

Written Direct Testimony of James M. Trautman | E-26 Before the COPYRIGHT ROYALTY JUDGES Washington, DC

) In re ) ) DISTRIBUTION OF ) NO. 14-CRB-0011-SD (2010-13) SATELLITE ROYALTY FUNDS ) )

WRITTEN DIRECT TESTIMONY OF DANIEL HARTMAN

March 22, 2019 I. QUALIFICATIONS

1. I have twenty years of experience in the satellite television business as an executive responsible for the valuation and acquisition of television programming, including fifteen years in that capacity at DirecTV, the nation’s largest satellite television provider. I am currently President of Hartman Media Consultants, providing consulting services for various media clients, including content owners, cable television networks, program distributors and investors in television programming distribution.

2. I started my career in October of 1989 as a corporate attorney at O’Melveny & Myers in Los Angeles, CA. In February of 1995, I accepted a position as Senior Counsel, Legal Affairs for Fox Broadcasting Company where I served as lead attorney for the Fox Sports group. I also served as legal counsel for the Fox broadcast television network.

3. In February 1998, I took a position as Assistant General Counsel, Business and Legal Affairs at DirecTV, where I spent two years negotiating agreements for carriage of programming on DirecTV. In April of 2000, I joined the Programming Acquisitions department at DirecTV and became Senior Director, serving in a strictly business role. I remained at DirecTV until January 2013, having been promoted to Senior Vice President of Programming Acquisitions in 2007. In that capacity, I was responsible for DirecTV’s program acquisition activities for its more than 18 million customers with respect to all general entertainment and premium cable networks, as well as initiatives such as video-on-demand programming and the development of DirecTV’s “TV Everywhere” platform. My responsibilities included negotiating the terms of carriage for that programming which entailed analyzing and determining the amounts DirecTV would be willing to pay for such programming. They also included overseeing sports programming negotiations as well as the strategy and negotiations with respect to broadcast and local television stations.

4. At DirecTV, I worked regularly with the CEO and other senior executives as lead strategist with respect to pricing and packaging of content as well as budgeting and forecasting of programming costs. I was closely involved in the selection of channels for DirecTV (including programming carried pursuant to the Section 119 license). The selection of channels to launch (and, subsequently, whether to maintain them on the platform) involved an in-depth

Written Direct Testimony of Daniel Hartman | 1 cost/benefit analysis. Throughout my tenure at DirecTV, I negotiated hundreds of programming distribution agreements covering all types of content, including retransmission consent agreements for broadcast television station carriage. During the period covering 2010-2013, I also negotiated an agreement for the rights to continue receiving the satellite signal of WGNA. Thus, I gained insight into the variety of programming available to multichannel video programming distributors (“MVPDs”) and the rationale for carriage. My responsibilities required me to be familiar with the types of programming being offered by DirecTV’s competition as well as the value of, and fair market price for, that programming.

5. I have attached a copy of my resume as Appendix A.

II. INTRODUCTION AND SUMMARY

6. I have been retained by the Joint Sports Claimants (“JSC”) to describe the cable and satellite MVPD marketplace as it existed in 2010-13; the nature and extent of competition between cable and satellite MVPDs during that period; and the manner in which cable and satellite MVPDs value programming.

7. Cable and satellite MVPDs compete in the same market for the same subscribers, and as a result value programming in a very similar manner. Monthly subscriber fees from these customers are by far the most significant source of revenue to both cable and satellite MVPDs. As a result, attracting and maintaining these subscribers is necessarily the lifeblood of MVPDs regardless of the technology they use to reach their customers. MVPDs compete for customers on things such as price, number of channels offered, video quality and customer service; however, by far the most important point of competition between MVPDs is in the programming offered.

8. Team sports programming is exceptionally important to cable and satellite MVPDs for purposes of attracting and retaining customers, and indeed more important than the other claimant categories in this proceeding. It is a key factor as to why many customers sign up for, and remain with, their particular cable or satellite provider. Team sports programming is regarded by many consumers as a unique, “one-of-a-kind” experience that must be watched in

Written Direct Testimony of Daniel Hartman | 2 real time. MVPDs must provide a robust offering of team sports programming if they are going to compete for pay television subscribers.

9. During the 2010-13 period, DirecTV was by far the largest payer of Section 119 royalties, paying over 50% more than Dish Network during the same period. The most important factor in DirecTV’s decisions to carry signals under the Section 119 license was always the availability of very substantial live professional and collegiate team sports on those signals. During my tenure at the company, DirecTV prided itself on having the most fulsome offering of live sports among all MVPDs, which it knew would draw in new subscribers (and keep them on the platform).

10. I understand that this proceeding involves the distribution of the compulsory licensing royalties paid by satellite distributors to retransmit broadcast programming pursuant to the Section 119 license during the years 2010, 2011, 2012 and 2013. I further understand that the goal in distributing these royalties is to allocate the royalties so that each group of copyright owners receives, as a percentage share, its “relative marketplace value,” i.e. what it would have received in an open market absent any compulsory license. In their most recent allocation determination, concerning the 2010-13 cable royalties (the “2010-13 Cable Final Determination”), the Judges awarded the JSC approximately 33% of the 2010-2013 cable royalty fund. See Distribution of Cable Royalty Funds, 84 Fed. Reg. 3552 (Feb. 12, 2019). Given the competitive relationship between cable and satellite MVPDs, their similar outlook on programming values during this period, and the similar content carried pursuant to the Section 111 and Section 119 licenses, I believe the 2010-13 Cable Final Determination provides the most appropriate benchmark for allocating Section 119 royalties (with an appropriate adjustment to account for the absence of Public Television and Canadian content in this proceeding).

III. DIRECTV AND THE INDUSTRY LANDSCAPE IN 2010-2013

11. The MVPD industry is an intensely competitive business and has only become more so during the last ten to fifteen years. During the 2010-2013 period at issue, MVPDs experienced ever-increasing competition. AT&T and Verizon had both launched video products by that point and other formidable “over the top” (“OTT”) competitors such as Netflix, Hulu, Amazon and Apple TV had emerged. During this period, subscription television had become a

Written Direct Testimony of Daniel Hartman | 3 saturated market, and competition showed no signs of slowing down. Competition between MVPDs was fierce with each distributor trying to capture the other’s customers; but, as the universe of non-multichannel customers continued to shrink (i.e. , there were very few new customers to be gained), MVPDs also became more concerned with retaining their subscribers as continued growth of their platforms looked less assured. This led to a closer examination of the programming carried, and MVPDs thus valued the various genres of programming on their platforms accordingly. A critical factor in analyzing whether to launch (or continue to carry) a particular programming network is the existence of unique, differentiated content. As more competitors entered the pay television marketplace, pressure increased to offer differentiated content that could not be found elsewhere.

12. In addition to the competitive pressures from other subscription services, MVPDs were facing increasing cost pressure as content costs were rising at a rate of approximately 8- 12% annually. MVPDs were generally not raising their subscription fees to match these increases, and other revenue opportunities ( e.g. , set top box fees, advertising revenue) did not make up for the shrinking margins that MVPDs were experiencing. Thus, MVPDs were forced to closely examine each channel they carried (as well an any new channel looking for distribution) and determine whether it brought value to the platform in comparison to its cost. Key to an MVPD’s decision on the value of a particular channel (or a particular genre) was its ability to maximize subscriber growth and minimize subscriber loss. While channels carrying live team sports programming were significantly more expensive than those carrying general entertainment programming, these channels were critical for MVPDs in their effort to retain customers.

13. As the retention of customers became a critical factor for MVPDs, programming executives placed a premium on live team sports programming. Sports fans are often passionate about their respective team(s) and expect that they will be able to view live games as part of the programming package they purchase. Few other types of programming garner this type of following, which is precisely why fans of live team sports make good customers. These fans are customers that MVPDs want to acquire/maintain. Thus, MVPDs must provide very substantial live sports programming if they are to remain competitive; if a particular MVPD does not carry a particular channel carrying live sports, there is a significant risk that those fans will find another

Written Direct Testimony of Daniel Hartman | 4 distributor that does carry that channel. Avoiding customer defection is of paramount importance to an MVPD.

14. DirecTV has always placed a particularly high premium on live professional and collegiate team sports. Since launch, DirecTV realized the importance of serving the sports fan. It has prided itself on being the leader in sports among MVPDs and has always been innovative in serving its customers with the best sports experience. The launch of NFL Sunday Ticket package in 1994 became a cornerstone of DirecTV’s sales and marketing efforts which continue to this day. DirecTV used the Sunday Ticket product to market itself as the “go to” place for sports and to attract an upscale customer demographic. During the lead up to every NFL season DirecTV heavily promotes the availability of this product, and DirecTV’s offering of the NFL Sunday Ticket brought in many new subscribers every year. The Sunday Ticket has also proven to be a great retention tool; many consumers continue to subscribe to DirecTV in order to catch the array of Sunday Ticket games every year. According to media reports, DirecTV renewed its Sunday Ticket agreement with the NFL in 2009 for the years 2011 through 2014 at a cost of $1 billion per year. 1

15. DirecTV’s focus on live professional and collegiate team sports programming carried through to many other programming decisions. Part of my job as a programming executive involved negotiating for carriage of sports networks, including during the 2010-2013 time period. These deals necessarily involved higher monthly license fees, often multiples of the license fees MVPDs pay for programming services that do not contain sports programming. For example, in 2013 the per-subscriber rate for ESPN ($5.54) was many multiples of the rate paid for general entertainment networks such as Lifetime ($0.32) and Animal Planet ($0.10).2 Likewise, TBS and TNT, which both had valuable team sports programming, commanded rates that were significantly higher than most general entertainment networks. DirecTV has a critical

1 Richard Sandomir, DirecTV Renews N.F.L. Deal and Expands Access , N.Y. Times (Mar. 23, 2009), https://www.nytimes.com/2009/03/24/sports/football/24sandomir.html 2 Quoctrung Bui, The Most (and least) Expensive Basic Cable Channels, NPR (Sept. 27, 2013), https://www.npr.org/sections/money/2013/09/27/226499294/the-most-and-least-expensive-cable- channels-in-1-graph

Written Direct Testimony of Daniel Hartman | 5 interest in providing programming services that carry live sports and it thus paid the higher fees associated with them.

16. DirecTV placed a similarly high focus on live professional and collegiate team sports when we evaluated which signals we would carry pursuant to the Section 119 license. During 2010-13, DirecTV paid far more to carry WGNA than any other broadcast signal it carried pursuant to the Section 119 license. During that period, WGNA’s sports programming included Major League Baseball telecasts of the Cubs and White Sox and National Basketball Association telecasts of the Chicago Bulls. All told, there were more than 100 live team sports games on WGNA for each year of 2010-13. 3 These live team game telecasts were by far the most valuable programming on WGNA and are popular across the country. DirecTV prided itself on the amount of live sports it offered, and the availability of sports programming on WGNA on a national basis was the reason DirecTV elected to carry WGNA. Unlike other channels, DirecTV cannot sell advertising time on WGNA as it is prohibited from doing so under the Section 119 license. DirecTV would not have carried WGNA without its live sports programming.

17. In contrast, DirecTV placed no value at all on the large volume of infomercials on WGNA. MVPDs do not share in the revenue that a programming service collects from an infomercial provider. Further, infomercials are generally lower quality programming and do not fit within the programming description of the service (i.e., they are not within the genre of the other programming). MVPDs would much rather see more compelling programming run during that infomercial time. If I could have, I would have eliminated all infomercials from WGNA. Moreover, the general entertainment sitcom reruns on WGNA were of far less value to DirecTV than the team sports programming. The same or similar programming could be found on other channels or on other sources. For example, during 2010-13, WGNA ran reruns of 30 Rock . Originals of 30 Rock were available on NBC, and reruns were carried on Comedy Central 4 and

3 See JSC Ex. 3, at 6, Table III-1 (Hartman Written Rebuttal Testimony). 4 Nellie Andreeva, Comedy Central Books ‘30 Rock’, The Hollywood Reporter (July 8, 2009), https://www.hollywoodreporter.com/news/comedy-central-books-30-rock-86260

Written Direct Testimony of Daniel Hartman | 6 Netflix.5 In 2013, it was also available in syndication on eleven broadcast stations carried pursuant to the Section 119 license. Thus, this general entertainment programming had much less value because its absence would not pose a significant risk of subscriber loss.6

18. Additionally, general entertainment programming, unlike televised live sporting events, is easily recorded; most of this programming is not “must see” programming and is easily watched at different times or on different platforms. For instance, during this period a significant amount of general entertainment programming could be viewed on Hulu a few days after it originally aired on a broadcast network. This greatly diminished the value of this programming to cable and satellite MVPDs. In contrast, the avenues for viewing live team sports programming from the major sports leagues during the 2010-2013 period remained very limited. Team sports are much less susceptible to being DVRed because fans typically want to watch the game when it is occurring. Once a game has ended, results become widely known across multiple platforms, including social media, which changes the game watching experience for the fan. As a result, there is less competition from OTT services like Hulu.

19. While there is an audience for the programming that falls into the Devotional Claimant category, MVPDs see limited value in such programming. During the 2010-2013 period most (if not all) of the religious-themed channels carried by DirecTV were carried under the “set-aside” rules that require satellite distributors to allocate 4% of their capacity to non- commercial educational programming. Under these set-aside rules, the programming service pays to the distributor half of the direct costs the distributor incurs in making the programming available. I am not aware of any religious-themed programming service that collects a fee from a distributor. In fact, any such service would have difficulty securing carriage if they did charge

5 Todd Spangler, Netflix Adds ‘The Office’ and ‘30 Rock’ Final Seasons, Other NBC Shows On Oct. 1 , Variety (Sept. 30, 2013), https://variety.com/2013/digital/news/netflix-adds-the-office-and-30-rock-final- seasons-other-nbc-shows-on-oct-1-1200682400/; Andrew Wallenstein, NBCUniversal, Netflix Renew Deal , Variety (July 13, 2011), https://variety.com/2011/tv/news/nbcuniversal-netflix-renew-deal- 1118039822/ 6 The value of general entertainment programming like syndicated sitcoms and movies has decreased over time. Throughout the last decade the available outlets and platforms for this programming have greatly expanded. In addition to all of the programming available on non-sports cable networks, OTT services like Netflix, Amazon and Hulu provided thousands of hours of programming to fulfill the needs of the non-sports fan.

Written Direct Testimony of Daniel Hartman | 7 a license fee for their programming. This type of programming was not integral to any programming decisions we made on which channels to carry.

IV. CABLE AND SATELLITE MVPDS COMPETE HEAVILY FOR CUSTOMERS

20. While cable and satellite distributors utilize different infrastructure for delivery to the home, the business model for each is very similar. Both rely predominantly on programming subscription fees from their customers to generate revenue. While there are other ancillary services that may generate revenue, subscription fees are the lifeblood of these businesses. Since the traditional cable and satellite distribution businesses have reached maturation, the competition between these companies has become a question of who can persuade the other’s customers to switch providers. Thus, each must remain competitive with the other with respect to factors such as price, channels offered and variety of programming packages. Newer entrants to the business such as Netflix and Amazon Prime, among others, only add to the competition by, among other things, offering lower-priced options to traditional cable and satellite subscriptions.

21. In my experience, MVPD executives are thus all driven by the same key considerations as they execute their respective business plans. The key to gaining (and more importantly maintaining) subscribers is to offer programming that customers want, at a price point that is attractive. Live team sports programming is key to both satellite and cable MVPDs because it is unique programming that subscribers want to watch in real time. MVPDs must therefore provide substantial team sports programming if they are going to remain competitive in the very competitive business of pay television. The MVPD business model likely could not survive without the variety of live team sports that these MVPDs offer. In fact, MVPDs will often highlight the availability of this programming when advertising to prospective customers.

22. It is worth noting that the license fees paid by the largest distributors ( e.g. , DirecTV, Comcast, Spectrum) to their content providers are generally consistent across the board. Distributors negotiate “most favored nations” clauses in their carriage deals which protect them against their competitors with respect to, among other things, the license fees charged by the content owners ( i.e. , DirecTV has assurance that the license fees it pays for each of the Fox networks will be essentially what Comcast pays).

Written Direct Testimony of Daniel Hartman | 8 V. THE 2010-2013 CABLE FINAL DETERMINATION

23. I have reviewed the royalty allocations contained in the 2010-13 Cable Final Determination and believe that the Judges’ awards are reasonable and in line with my experience in the MVPD industry. The higher value awarded to the JSC relative to the other claimants (ranging from a low of 30.2% in 2011 to a high of 36.1% in 2013 7) is consistent with what I observed in the marketplace. Live team sports programming was considered more valuable than any other programming during this period.

24. Based on my experience as the senior programming executive at DirecTV from 2010-13, the relative marketplace value of JSC programming would be as great to satellite MVPDs as the Judges found it to be for cable MVPDs. Each of the claimant groups in this proceeding had approximately the same share of the programming volume carried pursuant to the Section 111 and Section 119 licenses. 8

25. Moreover, filings with the Copyright Office during the 2010-13 period indicate the importance of WGNA to both cable and satellite MVPDs vis-à-vis other signals. WGNA represented approximately 73 percent of all subscriber instances under both Section 111 and Section 119 during 2010-13. 9 Likewise, WGNA was responsible for generating approximately 73% of Section 119 royalties during 2010-2013 and 81% of cable royalties. 10

26. Given that there are two fewer claimants in this proceeding as opposed to the 2010-13 Cable Proceeding (accounting for approximately 22.5% of the cable award) 11 , the percentage awarded to the JSC in this proceeding should be greater than the percentage awarded to them in the 2010-13 Cable Final Determination.

7 2010-13 Cable Final Determination, 84 Fed. Reg. at 3552. 8 See Written Direct Testimony of William Wecker, Ph.D. and R. Garrison Harvey, at 10, Table 6 (Mar. 22, 2019). 9 See Written Direct Testimony of James M. Trautman, at 12, Table 4 (Mar. 22, 2019). 10 Id. at 14 & Table 5. Section 111 fees generated are stated as a percentage of fees generated attributable to all non-Public Television, non-Mexican, and non-Canadian signals carried by cable systems during the 2010-13 period. 11 See 2010-13 Cable Final Determination at 3552.

Written Direct Testimony of Daniel Hartman | 9 VI. SECTION 119 “COMPENSABLE” NETWORK PROGRAMMING

27. I understand that the network-originated programming on CBS, NBC, and ABC signals was not compensable in the 2010-13 cable proceeding. I further understand that this network programming is compensable when it is carried by satellite carriers pursuant to the Section 119 license. All of the CBS, NBC, and ABC originated programming retransmitted by satellite carriers during 2010-13 falls within the JSC and Program Suppliers’ Agreed Categories.

28. As a programming executive at DirecTV, the live sports programming on CBS, NBC, and ABC was the most important network-originated programming on those signals. These three networks aired some of the most valuable sports programming during the 2010-13 period. When DirecTV carried these signals (along with the Fox network 12 ) to unserved households, it provided premiere events such as the Super Bowl and the NBA Finals, which these subscribers would not have otherwise received. It also provided other key sports programming such as weekly NFL games (including playoffs), “March Madness” and college football’s “SEC Game of the Week” (all on CBS), Sunday Night Football (on NBC) and select NBA games, including postseason (on ABC). As a distributor, I could not be without these marquee sporting events. When I negotiated for carriage of ABC, CBS and NBC stations, I was most concerned by the possibility of losing the ability to carry these live sports programs to DirecTV subscribers.

12 Although the network originated programming on CBS, NBC, and ABC was not compensable in the 2010-13 Cable Final Determination, Fox originated content was compensable and valued.

Written Direct Testimony of Daniel Hartman | 10 I declare under penalty of perjury that the foregoing is true and correct.

M14/1q, e)-0 Daniel Hartman Date Appendix A DANIEL M. HARTMAN 217 21st Street, Manhattan Beach, CA 90266 310 ⬪. 200 ⬪. 6458 ⬪. [email protected]

EXPERIENCE

President ⬧. Hartman Media Consultants Manhattan Beach, CA 2013-Present

Provide strategic advice to a variety of traditional and new media companies with respect to content acquisition and distribution.

Senior Vice President, Programming Acquisitions ⬧ DIRECTV, Inc. El Segundo, CA 1998-2013

Responsible for program acquisition activities for DIRECTV with respect to all general entertainment, sports and premium networks as well as local broadcast stations. Negotiated carriage agreements for, and maintained day-to-day relationships with, all new and existing networks. Worked regularly with EVPs of Content and Marketing and CEO as lead strategist with respect to pricing and packaging of content as well as budgeting and forecasting of programming costs.

Senior Counsel, Legal Affairs ⬧ Fox Broadcasting Company/Fox Sports Los Angeles, CA 1995-1998

Served as chief in-house counsel for Fox Sports, duties for which included negotiating and drafting documentation relating to sports rights acquisitions as well as all above-the-line personnel. Served as primary attorney for Fox Sports Marketing and Fox Sports Online. Also served as counsel for Fox Broadcasting Company, negotiating pilot/series agreements, production services agreements, content license agreements.

Corporate Attorney ⬧. O’Melveny & Myers Los Angeles, CA 1989-1995

Drafted and negotiated documentation with respect to a variety of corporate and lending transactions.

EDUCATION George Washington University Law Center J.D., with honors, May 1989 Trustee Scholar

The Pennsylvania State University B.A., with Honors, May 1985 ⬧ Communications, Business Minor University Scholars Program ; Presidential Medal of Achievement Recipient

BOARDS The Tennis Channel: 2007 - 2013 Los Angeles Sports Council/Southern California Committee for the Olympic Games: 2008-Present Penn State College of Communications Advancement Council

Before the COPYRIGHT ROYALTY JUDGES Washington, DC

) In re ) ) DISTRIBUTION OF ) NO. 14-CRB-0011-SD (2010-13) SATELLITE ROYALTY FUNDS ) )

WRITTEN DIRECT TESTIMONY OF DAVID SHULL

March 22, 2019

I. Qualifications

1. Since 2004, I have been an executive in the media industry. In 2004, I joined what was then called EchoStar, which eventually rebranded its satellite TV subscription business as DISH Network Corp. (“Dish”) and spun off its satellite holdings as EchoStar Holding Corp.

2. On December 31, 2008, I assumed the role of Senior Vice President,

Programming at Dish. In that position, I was primarily responsible for the acquisition of content, negotiation of the pricing of content, and determination of the line-up or packaging of channels provided to our subscribers. My team was responsible for reviewing content-related contracts and payments, including the copyright payments paid by Dish for signals carried pursuant to the

Section 119 of the Copyright Act. I made decisions regarding what signals to carry, and I negotiated retransmission agreements with WGNA.

3. From 2013 through 2015, I maintained oversight of the programming team at

Dish, but I was also responsible for marketing, advertising sales, and product. My new title during this period of time was Executive Vice President, Chief Commercial Officer.

4. In May of 2015, I joined The Weather Channel (“Weather Channel”) first as its

Group President for TV and then later as the CEO of The Weather Channel, through a corporate entity called Weather Group, LLC. I left The Weather Channel in September of 2018. During my time at The Weather Channel, I met—and negotiated contracts with—a number of our distributors, including cable companies and satellite television companies. I was responsible for all aspects of the business while in the CEO role.

5. I received my bachelor’s degree from Harvard University and my MBA from

Oxford University’s Said Business School.

6. My full resume is attached as Appendix A.

Written Direct Testimony of David Shull | 1 II. Introduction and Summary

7. I have been retained by the Joint Sports Claimants (“JSC”) to provide testimony based on my experience in the multichannel video programming distributors (“MVPD”) industry, including the manner in which MVPD programming executives evaluate programming and the level of competition between cable and satellite MVPDs.

8. Cable and satellite MVPDs compete with one another for subscribers. While cable and satellite MVPDs use different transmission technologies, they market very similar programming lineups to the same customers and are in active competition with each other for the customers’ business. As a result, cable and satellite MVPDs place similar valuations on the different categories of programming that are the subject of this proceeding and would pay similar prices for it in a free market absent the Section 119 and 111 statutory licenses.

9. Dish earns the great majority of its revenue from subscriber fees. Thus, acquisition, and, even more importantly during 2010-13, retention of subscribers was key to

Dish’s business model. Dish competed vigorously with other satellite carriers as well as cable systems for subscribers. Team sports programming was central to Dish’s business strategy of acquiring and retaining subscribers. Team sports programming is attractive to passionate sports fans, is live and thus resistant to time shifting, and is often not available from other sources. For these reasons, Dish customers demanded robust sports programming, and, during 2010-13, Dish spent more money on sports programming than on any other type of programming.

10. As Senior Vice President of Programming, I was actively involved in decisions to carry signals pursuant to Section 119. During 2010-2013, approximately 70% of all Section 119 royalties paid by Dish were paid for the retransmission of WGNA, a superstation with more than

Written Direct Testimony of David Shull | 2 100 professional baseball and basketball games per year. 1 The reason that Dish elected to pay to carry WGNA was to obtain this sports programming for its subscribers. Dish saw no value in the infomercials carried on WGNA, and would have preferred not to carry them if they could have been removed from the signal. Dish also saw little value in the reruns of movies and sitcoms on

WGNA, as these were similar to the large volumes of other programming available on other Dish stations and from other sources such as Netflix.

11. I understand that the Judges allocated to the Joint Sports Claimants (“JSC”) an approximately 33% share of 2010-2013 cable royalties paid pursuant to Section 111. 2 Based on my experience, I would have expected the JSC allocation for 2010-13 Section 111 cable royalties to be even greater.

12. Given the direct competition between cable systems and satellite carriers and the similar value placed by these MVPDs on various types of programming, the relative market value for team sports programming retransmitted by satellite MVPDs pursuant to the Section 119 license would have been at least as high as compared to that retransmitted by cable MVPDs, which would result in a greater share for JSC given the smaller number of claimants to Section

119 royalties.

III. Background Regarding Dish

13. Dish is a national, direct-to-home satellite operator that provides American households with pay TV services. Dish bundles together hundreds of video channels, on demand

1 See JSC Ex. 3, at 6, Table III-1 (Hartman Written Rebuttal Testimony).

2 Distribution of Cable Royalty Funds , 84 Fed. Reg. 3552 (Feb. 12, 2019). The quoted figure reflects the Judges’ award of royalties from the “Basic Fund.” I understand further that JSC’s share of the 3.75% royalty fund was approximately 40%. Id.

Written Direct Testimony of David Shull | 3 video programs, and other services and sells them to consumers for a monthly subscription. As of December 2012, Dish had approximately 14 million subscribers, who paid approximately $77 per month on average. 3 Dish earns the majority of its revenue from the sale of subscriptions to subscribers. Dish also earns a smaller amount of revenue from the sale of advertisements.

However, the advertisement revenue stream is not relevant to signals carried under Section 119, which forbids MVPDs from inserting their own advertising.

14. During 2010-2013, Dish and DirectTV were the two main satellite MVPDs in the

United States. Together, Dish and DirectTV accounted for 99% of the Section 119 royalty payments. 4 Dish alone accounted for more than one-third of the Section 119 royalty payments.

15. In the 2010-13 period, Dish earned approximately 90% of its revenue from subscriber fees and 2-5% from advertising. As the executive in charge of programming, I attempted to offer programming that would attract new subscribers and, most importantly due to the maturity of the market, retain subscribers.

IV. Competition Between Satellite and Cable MVPDs

16. During the period of 2010-2013, Dish competed directly not only with DirectTV but also with the cable MVPDs. Both satellite and cable MVPDs competed for the same subscribers using the same types of programming. Most subscribers that Dish was seeking to acquire or retain had the option of signing with a cable system.

3 Dish Network Corp., Annual Report (Form 10-K), at 54 (Feb. 20, 2013).

4 According to Cable Data Corporation data, there were only a few other small operators that paid Section 119 royalties: National Programming Service LLC, Distant Networks LLC, and Satellite Receivers LTD. Additionally, Dish operates a separate carrier in Puerto Rico which files its own statements of account. This carrier offers subscribers the same mix of non-network stations as the mainland Dish Network, but no network signals.

Written Direct Testimony of David Shull | 4 17. In light of this direct competition between satellite and cable MVPDs, Dish benchmarked our packaging and pricing against all of the other MVPDs, regardless of distribution technology. When we negotiated our content programming contracts, we considered all of the cable and satellite companies to be essential in terms of competitive protections. Most

Favored Nation (“MFN”) provisions are common in the programming agreements signed by

MVPDs. These MFNs are heavily negotiated and often run to several pages worth of provisions that ensure that no other MVPD can gain an unfair advantage with respect to pricing, packaging, or new digital rights. When Dish was negotiating MFN provisions, it sought protection against all other MVPDs, including both cable and satellite operators. The marketing team evaluated pricing, competitive offer brochures, and channel lineups for both cable and satellite competitors, and shared that information with programming decision makers in my department. The advertising sales team often competed against both cable and satellite MVPDs when they were selling addressable advertising inventory to clients.

18. My role as President and CEO of The Weather Channel also provided me with direct insights into the similar value propositions held by satellite and cable MVPDs. The

Weather Channel sold its programming to both satellite and cable MVPDs. I did not negotiate or price The Weather Channel’s product differently depending on whether I was negotiating with a satellite or cable MVPD. Rather, I was interested in the number of subscribers and degree of penetration that the MVPD could provide. The Weather Channel carriage agreements I negotiated frequently included MFNs that prevented me from offering lower rates to a cable

MVPD than to a satellite MVPD, and vice versa.

19. I understand that the Judges found that the JSC are entitled to an approximately

33% share of 2010-13 cable Section 111 royalties. If anything, this allocation to JSC is lower

Written Direct Testimony of David Shull | 5 than I would expect given the high value that Dish and other MVPDs placed on live professional and collegiate team sports programming during the 2010-13 period. In any event, given the head-to-head competition between cable and satellite MVPDs and the similar value propositions for their programming, satellite MVPDs place at least as great a value on team sports programming as cable MVPDs do (adjusted upward to reflect the smaller number of claimants and minor differences in program carriage).

V. Role Of Team Sports Programming For Dish

20. As Senior Vice President of Programming at Dish, I negotiated for the carriage of several cable networks, such as ESPN and TNT, that carried JSC programming. As with any programming carriage decision, we conducted a thorough cost-benefit analysis when we analyzed our willingness to pay to carry a particular signal. This cost-benefit analysis was of particular importance during 2010-13 due to the significant rise in programming costs during that period.

21. Team sports programming played a key role in attracting and retaining customers.

Sports fans are passionate and expect access to the sports programming in which they are interested. The live nature of team sports programming brings a level of excitement that is rare among most other types of programming. During 2010-13 period, most team sports programming was not typically available from other sources.

22. This is particularly the case because team sports programming is one of the last forms of “appointment” television, meaning that subscribers will typically watch it when broadcast as opposed to a later time. “Over the top” (“OTT”) services like Hulu, which during this period competed with cable and satellite MVPDs by offering programming to their subscribers a few days after its original airing, did not show delayed sports team telecasts. There

Written Direct Testimony of David Shull | 6 is comparatively little interest in watching a game after it has occurred. American TV viewers are passionate about their sports teams, and they want to see the games live. They want to see all of the best plays, the wins, and the disappointments live so that they can rejoice or commiserate with their friends and fellow fans. After the game is over, the tension of the game is reduced, and the focus often turns to the celebration of a win or the despondency of a loss. For this reason, team sports programming is far more resistant to time shifting than other forms of programming, and therefore was not generally available on OTT platforms during the 2010-13 period. The limited availability of team sports programming made the rights we were acquiring particularly valuable to us and our subscribers.

23. The features that make team sports programming so valuable and important to customer acquisition and retention are typically not present in the general entertainment sitcom reruns or movies at issue in this proceeding. For example, a rerun of a sitcom on television is often fungible, meaning that the same or similar sitcom typically can be found on other stations.

As a general matter, subscribers will not cancel a subscription simply because a sitcom rerun is not available. Additionally, during the 2010-13 period Dish subscribers could increasingly find general entertainment programming from OTT services like Netflix and Hulu. This further decreased the value of general entertainment programming as a means of attracting and retaining subscribers.

24. The value of team sports programming can be seen from the significantly higher rates that program networks carrying team sports were able to charge as compared to networks that did not carry team sports. For example, Dish paid many times more for ESPN than for the

History Channel or HGTV, two cable networks carrying primarily general entertainment programming. Similarly, Dish paid significantly more for TBS and TNT, two cable networks

Written Direct Testimony of David Shull | 7 that carried both sports and general entertainment programming, than for networks without sports programming.

25. Dish paid far more for sports programming than for other types of content.

Approximately 35-40% of DISH’s core programming costs went to pay for sports content.

These costs reflect the high importance of sports programming to the retention and acquisition of subscribers. In certain rare instances where Dish made the decision not to carry certain sports programming, it lost substantial subscribers as a result.

VI. Dish’s Carriage of Programming Pursuant to Section 119

26. During the 2010 through 2013 period, of all Section 119 royalties paid by Dish, approximately 70% were paid for the carriage of WGNA. Dish carried WGNA more broadly than any other Section 119 signals. The company packaged WGNA in its America’s Top-200 package, which was distributed to approximately 8 million subscribers nationwide. Dish decided to offer WGNA on this popular tier of service because Dish recognized the nationwide demand for the sports programming on WGNA.

27. As the senior executive responsible for programming decisions at Dish, I elected to carry WGNA because of its team sports programming. On average from 2010-2013, WGNA carried approximately 69 Cubs games, approximately 31 White Sox games, and approximately

15 Bulls games. 5 The Chicago Cubs have a national following and have passionate fans throughout the United States. The Chicago Bulls and White Sox games were also attractive to sports fans throughout the country.

5 See JSC Ex. 3, p. 6, Table III-1 (Hartman Written Rebuttal Testimony).

Written Direct Testimony of David Shull | 8 28. The other programming on WGNA did not have substantial value to Dish. For example, I understand that infomercials represented the highest volume of Program Suppliers’ programming on WGNA during 2010-2013. 6 I would have preferred to remove infomercials because they diminished the value of the channel in the eyes of Dish’s subscribers. Subscribers generally viewed these shows as cheap productions that simply tried to pull more money out of their wallets. As a result, at Dish, we intentionally grouped all of the “shopping channels” together on the guide so that our customers could avoid them. Dish also generally charged shopping or infomercial channels millions of dollars to be carried to the Dish subscribers. In carriage negotiations outside the Section 119 context, I frequently insisted that a particular network not insert any paid programming on its air. However, under Section 119, MVPDs were not permitted to alter the content on the signal.

29. The other Program Suppliers’ programming on WGNA had little value to Dish.

For example, during 2010-2013, WGNA broadcast reruns of 30 Rock . This programming was not unique. During this period, new episodes of 30 Rock were still airing on NBC. It was available from numerous other sources, including Comedy Central 7 and Netflix.8 Thus, it was not highly valuable to Dish’s efforts to attract and retain customers.

30. The devotional programming on WGNA was also of limited value to Dish. As a general matter, Dish and other MVPDs did not pay substantial amounts for devotional programming. Rather, devotional networks often paid to place their programming on MVPDs.

6 See Written Direct Testimony of James M. Trautman, at 20 (Mar. 22, 2019). 7 Press Release, Comedy Partners, Comedy Central Acquires Off-Net Rights to “30 Rock” (July 8, 2009), https://press.cc.com/press-release/2009/07/08/070809_cc-acquires-30-rock 8 Andrew Wallenstein, NBCUniversal, Netflix Renew Deal , Variety (July 13, 2011), https://variety.com/ 2011/tv/news/nbcuniversal-netflix-renew-deal-1118039822/

Written Direct Testimony of David Shull | 9 31. After WGNA, the most prominent signal carried by Dish under the Section 119 license in terms of number of subscribers was WPIX. Dish carried WPIX primarily because it offered New York Mets telecasts during the 2010-13 period.

32. In addition to WPIX, Dish — unlike DirecTV — carried a number of additional non-network signals. A key component of each of these signals was its sports programming:

• WSFL: carried college football and basketball telecasts during 2010-13

period, including games featuring major teams like Alabama, LSU and

Florida.

• KTLA: carried Oakland Raiders preseason game telecasts during the

2010-13 period.

• WSBK: carried college basketball and football telecasts, including

numerous highly valuable ACC Tournament basketball telecasts.

• WWOR: carried New York Yankees telecasts during 2010-13, as well as

at least one New York Giants regular season telecast.

VII. Network Programming

33. Dish also carried several CBS, NBC, and ABC affiliates, as well as Fox affiliates.

I understand that, for the purposes of the satellite proceeding, these stations are all considered

“network” stations. I further understand that the network-originated content on ABC, CBS and

NBC affiliates was not compensable in the 2010-13 cable proceeding, but Fox programming was.

34. The CBS, NBC, and ABC original network programming distantly retransmitted by Dish pursuant to Section 119 during 2010-13 contained some of the most valuable of all sports programming aired during the 2010-13 period. For example, three of the four Super Bowl

Written Direct Testimony of David Shull | 10 telecasts during this period were on CBS or NBC (the fourth was on Fox). CBS carried regular season Sunday afternoon NFL telecasts, and NBC produced its highly popular “Sunday Night

Football” telecast. ABC carried the NBA Finals, and CBS carried the NCAA basketball playoffs

(“March Madness”). Of course, these stations also carried dozens of critical sporting events during the regular seasons of professional baseball, basketball, and hockey. The college football games they often carried on Saturdays were core traditions for many of Dish’s subscribers.

When carriage negotiations arose with the CBS, ABC, or NBC networks, I was always more concerned with avoiding the loss of the JSC programming on these networks than in losing any general entertainment programming.

Written Direct Testimony of David Shull | 11 I declare under penalty of perjury that the foregoing is true and correct.

NaA-c-C— 70i ?a 7

David Shull Date Appendix A

DAVE SHULL

900 S. Williams Street • Denver, Colorado • 80209 • (303) 808-7228 • [email protected]

The Weather Channel [2015 – 2018] – The Weather Channel TV network reaches 45% of all American households every month. Each day, approximately 8 million people tune in to watch the channel for their daily weather forecasts, storm coverage, scientific explanations of weather phenomena, and original programs about the weather. During the 2017 hurricanes, The Weather Channel was the #1 rated cable channel in America. Harris Equitrends has rated The Weather Channel the “Most Trusted Brand in News” for the last 8 years. The channel has approximately 400 employees.

From 2008-2018, The Weather Channel was owned by Bain Capital, Blackstone, and Comcast/NBCU. In March 2018, we completed a competitive bidding process to sell the company to Entertainment Studios with financing by Oaktree Capital.

• Chief Executive Officer – o Responsible for all aspects of the company. Actively managed a board controlled by private equity groups. o Nominated for Emmy for hurricane coverage. Set all-time ratings records during 2017. The Weather Channel was one of very few cable channels to grow its ratings in 2017 over prior years (up 10% over 2016). o Generated $150+ million in free cash flow for the owners through strong budget controls and strategic investments in digital and new augmented reality programming initiatives. o Added 40 new clients in 2017, including Lands’ End, Southwest Airlines, Home Depot, and Domino’s. Successfully increased spending with State Farm, Subaru, and Mucinex. o Refocused organization purely on reporting the weather – storms, forecasts, and scientific explanations. Overhauled marketing organization to connect with core audience using best practices from political campaigns. o Renewed multi-year contracts for more than 60% of revenue, stabilizing future cash flows. o Reduced costs 20% by streamlining production model, cutting out unnecessary high-priced talent, removing overhead excess, and implementing strict cost controls. o Built strong relationships with members of Congress, NOAA, National Weather Service, FEMA, and the American Red Cross. o Launched LocalNow, a unique local news product for over-the-top video services such as SlingTV, YouTube TV, Fubo TV. Content partners include Cheddar, Stadium, Yelp, SportRadar, Tastemade, Nextdoor. o Negotiated with Twitter to launch Pattern, a new weather and science product. • Group President, TV – Divested the consumer mobile apps, weather.com web site, and business- to-business assets to IBM in a multi-billion-dollar transaction. Mobile app was #4 for traffic worldwide with tens of billions of daily transactions.

Layer 3 TV – Content Advisory Board [2015-2017]. Advised executive team from launch through successful sale to T-Mobile. Layer 3 now forms the core of T-Mobile’s video strategy.

DISH Network / EchoStar [2004 - 2014] – A Fortune 200 company, DISH Network had 14.1 million pay TV subscribers and 500,000 broadband subscribers. DISH had a market cap of $32 billion, $14+ billion in revenue, EBITDA of $2.8 billion, and 24,000 employees. Its sister company, EchoStar, provided its set top boxes, satellite systems technology, and international operations.

Based in Denver for 2004-2005 and 2009-2014. Based in Asia (Hong Kong) for 2006-2008 with extensive business travel in China, Taiwan, Korea, Japan, Indonesia, India, and Thailand.

▪ Executive Vice President & Chief Commercial Officer – Managed the revenue and gross profit of the corporation. Led the groups that create all consumer packages and promotions for DISH Network. Reported to the CEO. o Direct reports included the Chief Marketing Officer, SVP Product Management, SVP Advertising Sales, and SVP Programming / Content Acquisition. o Substantially improved quality and ARPU of customers through (a) major shift of $400 million marketing budget to digital tactics to optimize subscriber NPV, (b) implementation

of cross-selling in the call centers and through DISH’s TV ad inventory (2 minutes / hour for most TV channels), and (c) focusing on high-end technology advantages in TV and digital marketing messages. o In a multi-billion-dollar deal, negotiated the first grant of rights for over-the-top (OTT) rights to broadcast ESPN/Disney/ABC channels over the Internet directly to consumers. This unique service, Sling TV, now has millions of subscribers. o Interfaced with 4,000+ distributors and retailers and direct sales call centers to set sales priorities, compensation parameters, and marketing messages. o Launched joint venture effort with DirecTV to push higher CPM interactive and targeted political advertising. o Grew new dishNET satellite broadband business by 230%+ year over year.

▪ Senior Vice President – Programming – Oversaw content acquisition budget of $5+ billion and revenue budget of $1+ billion. Reported to the CEO. Responsible for o (i) negotiation of all content deals for DISH (e.g., CBS/Showtime, Discovery, Turner, Viacom, NBC, Fox), o (ii) the P&L for premium ARPU services (e.g., HBO, Showtime, Starz), video on demand movies from studios (e.g., Warner Brothers, Paramount, Sony), and sport services, o (iii) sales and marketing of the widest array of foreign language channels (e.g., 260 channels from Arabic, Hindi, Chinese, German, Russian providers), and o (iv) the launch of new digital media products including DISHAnywhere.com and iOS / Android applications.

▪ Senior Vice President & Managing Director, Asia Pacific – Completed investment in mobile video venture in Korea. Sat on the board of TU Media as company grew from 1.0 million to more than 2.0 million subscribers. Structured joint venture with AsiaSat to launch DISH HD, a new satellite TV service, into Taiwan. Negotiated joint venture for DISH Mexico, which has since grown to more than 2 million subscribers. Assessed opportunities and negotiated deals in China, Indonesia, India, Vietnam, Middle East, Africa, and South America.

▪ Vice President, Operations – Responsible for implementing cross-functional operational initiatives across call centers, national network of thousands of in-home installers, and inventory management teams.

▪ Director/Assistant to Chairman & CEO – Oversaw strategic initiatives for the founder and Chairman.

RioLabs, Inc. [1999 – 2003] - A provider of enterprise software for the supply chain. Customers included Schlumberger and MSC Industrial Products.

▪ Chief Operating Officer – Raised $7.5 million in venture capital over multiple rounds, built the team to 30 employees, and developed the major client accounts in the petroleum and energy marketplace. Sold in 2003 to Quovadx.

Tanning Technology Corporation [1997 - 1998] - A systems integrator focused on large scale data warehouses with customers including Blockbuster, Maersk, and Federal Express. Company received $15 million investment from AEA Investors.

▪ Marketing Director – Led public relations and corporate marketing efforts, including analyst briefings, customer panels, and new product development.

The Parthenon Group [1994 – 1997] - A strategy consulting firm with offices in Boston, San Francisco, and London.

▪ Principal – (Promoted from Associate to Senior Associate to Principal). Led strategy consulting team for companies across multiple industries. Clients included McGraw-Hill, JM Huber, Thomson Financial, Compaq / Microcom, Allmerica Financial, Coram Healthcare, and others.

Education

▪ Diploma Chinese University of Hong Kong Sept 2018 – present • Mandarin Chinese studies

▪ MBA Oxford University (Said Business School) October 2004 • Graduated with high distinction • 175 classmates from 65 countries • Summer project was based in Paris. Winter project involved work in Netherlands and Spain

▪ BA in Philosophy Harvard University June 1994 • Graduated with honors • Focused on philosophy of math and language meaning. Extensive coursework in economics and computer science. Completed German language translations of philosophers from 1890s

Variety 30 Tech Execs to Watch January 2015

CableFax 100 2013, 2014, 2017, 2018

3rd place Westinghouse Science Talent Search June 1990

Personal

▪ Multi-engine private pilot with instrument rating. Enjoy skiing, scuba diving, biking, photography, electronic keyboard music, and international travel. Married with two kids.

▪ American Red Cross of Georgia (2016-2018) [Board director]

▪ International School of Denver (2013-2014) [Board director]

Before the COPYRIGHT ROYALTY JUDGES Washington, DC.

In re : NO. 14-CRB-0011-SD (2010-13)

DISTRIBUTION OF SATELLITE ROYALTY FUNDS

WRITTEN DIRECT TESTIMONY OF ANDREW R. DICK, Ph.D.

March 22, 2019

TABLE OF CONTENTS

I. Qualifications ...... 1 II. Introduction and Summary ...... 3 A. Background ...... 3 B. Assignment ...... 5 C. Summary of Main Opinions ...... 5 D. Economic Principles Underlying the Standard ...... 7 1. Revealed Preference in a Free Marketplace ...... 8 2. Willingness-to-Pay ...... 10 3. Conclusion ...... 13 III. Benchmark Analysis ...... 13 A. Benchmark Standard ...... 13 B. Benchmarking Is a Standard Economic Method ...... 15 C. Benchmark Criteria ...... 17 1. Comparability of the Negotiating Parties to Parties in the Proceeding ...... 17 2. Comparability of the Rights in Question ...... 22 3. Similarity of the Economic Circumstances Affecting the Earlier Negotiators and the Current Litigants ...... 27 4. Degree to Which the Analogous Market Reflects an Adequate Degree of Competition ...... 30 D. Conclusion ...... 30 IV. Application of the Benchmark ...... 31 V. Conclusion ...... 33

Written Direct Testimony of Andrew R. Dick, Ph.D. | i

I. QUALIFICATIONS

1. My name is Dr. Andrew Dick. I am an economist at Charles River Associates (“CRA”), an economics consulting firm, where I hold the position of Vice President in the Competition Practice. My business address is 1201 F Street, N.W., Washington, D.C. 20004. I received a Ph.D. and M.A. in Economics from the University of Chicago and a B.A. in Economics and Political Science from the University of Toronto. By training and experience, I am a specialist in competition economics, which involves the application of economic principles and methods to address questions about the structure and operation of markets.

2. My professional experience spans more than 25 years, the majority of which has involved analyzing competition issues. Prior to joining CRA in 2003, I was employed by the Antitrust Division of the U.S. Department of Justice (“DOJ”) for seven years where I held positions as Staff Economist and later Assistant Chief and then Acting Chief of the Competition Policy Section. While at the DOJ, I managed a large staff of PhD economists working on competition assignments, including investigations involving the broadcast, cable and satellite television industry and other media sectors. Previously, I was an Assistant Professor of Economics at the University of California, Los Angeles from 1989 to 1996 where I taught courses on microeconomics, competition, and antitrust and regulation policy. My research has focused on competition economics, including in regulated industries where prices are not set freely in the marketplace. I have published widely in peer-reviewed academic and practitioner journals on competition, market and monopoly power, the competitive effects and rationale of business policies and practices, and other issues relevant to competition economics. I have also made numerous invited presentations on competition topics to governmental and academic institutions.

3. As an economist at the DOJ and in private practice, I have evaluated competition issues in a broad variety of industries, including industries with direct relevance to the current proceeding. With respect to multi-channel video programming distributors (“MVPDs”), for example, I have been retained by clients to analyze competition as regards contracting between programming owners and cable systems operators (“CSOs”) and satellite carriers as well as competition issues involving cable, satellite, and online

Written Direct Testimony of Andrew R. Dick, Ph.D. | 1

streaming distribution of live team sports programming. In those engagements, I applied my economics training and professional experience to assess how changes in the competitive landscape would likely impact bargaining relationships and market outcomes between content owners and distributors and how rules governing sports distribution rights affect the pricing of television programming bundles.

4. With respect to television and media competition more broadly, over the course of my professional career, I have performed numerous competitive analyses relating to the supply of programming by television networks, first-run and off-network syndicators, and local television stations; competition in licensing cable/satellite channels to MVPDs; mergers and acquisitions involving local broadcast stations or cable/satellite channels; and competition between “traditional” and “new” media providers (e.g., competition between cable and satellite service providers such as Comcast and DirecTV and Online Video Programming Distributors (“OVPDs”) such as Hulu, Amazon and Apple). In the context of performing these analyses, I have regularly applied economic principles and methods relating to product differentiation, competitive substitution, programming scarcity, and price determination. As I will explain in my report, these economic principles and methods have direct relevance to the issues raised in the current proceeding.

5. I also have significant experience in the field of sports economics. I have been retained on a variety of competition-related projects individually or collectively by the major professional sports leagues (National Hockey League, National Football League, Major League Baseball and National Basketball Association), the National Collegiate Athletic Association, and other professional sports entities such as the Ultimate Fighting Championship and the Professional Rodeo Cowboys Association. Among the competition issues addressed during these engagements, I have analyzed the sale and promotion of college sports multi-media rights, differentiated product competition between sports and general media entertainment, and the competitive effects of different ownership arrangements as regards multi-media rights.

6. I have testified as an expert on competition economics in federal court and before federal industry regulators. I have also made numerous expert submissions and

Written Direct Testimony of Andrew R. Dick, Ph.D. | 2

presentations to federal, state, and foreign antitrust agencies in connection with competition investigations. Appendix 1 provides my curriculum vitae, which includes a list of recent litigation and regulatory proceedings where I have provided expert testimony.

II. INTRODUCTION AND SUMMARY

A. Background

7. The current proceeding involves the allocation of royalties paid for retransmission of distant (i.e., out-of-market) broadcast signals by satellite carriers pursuant to Section 119 of the Copyright Act (“Section 119”) during 2010-13. The claimant categories in the current proceeding are the Joint Sports Claimants (“JSC”), Commercial Television Claimants, Devotional Claimants, and Program Suppliers.1

8. I understand that Section 119 allows satellite carriers to retransmit distant signals without negotiating royalty rates with the copyright owners of programs embedded in those signals. Instead, the satellite carriers must pay statutorily-prescribed royalty fees, which are collected by the U.S. Copyright Office. Because licensing of distant signals is compulsory and because satellite carriers are charged for retransmission of distant signals in the form of royalties set pursuant to a statutory formula, there is no freely-determined market price that can be used to determine the marketplace value of distant signal programming.

9. I understand that in the absence of a freely-determined market price, the Copyright Royalty Judges (“Judges”) are tasked with allocating royalties collected from satellite carriers among the owners of distinct categories of programming embedded in the distant signals that carriers chose to retransmit. Furthermore, I understand that no statutory standard exists prescribing the method by which these royalties are to be

1 For a description of the programming supplied by each of the four claimant groups, see Notice of Participant Groups, Commencement of Voluntary Negotiation Period (Allocation), and Scheduling Order, Docket No. 14–CRB–0011–SD (Nov. 25, 2015) at Ex. A. Similar program categories were used in the Cable Proceeding. See note 1 to Final Determination of Royalty Allocation, Docket No. CONSOLIDATED 14-CRB-0010-CD (2010-2013), 84 FR 3552-3611 (hereinafter “2010-13 Final Cable Determination”) at 3552 for a description of the programming supplied by each of the four claimant groups. Additionally, I understand the name of the group claiming for Commercial Television royalties is the “Broadcaster Claimants Group.”

Written Direct Testimony of Andrew R. Dick, Ph.D. | 3

allocated under the Copyright Act. In practice, the Judges have used “relative marketplace value” as the standard in allocating compulsory licensing royalties collected from CSOs, including during the most recently concluded 2010-13 proceeding related to the distribution of cable royalty funds. 2 Because the level of royalties paid in the aggregate is decided through regulation, the Judges have adopted a standard of relative marketplace value rather than absolute marketplace value. In other words, the standard considers the value of each category of compensable programming relative to all other categories of compensable programming.3

10. In the 2010-13 Cable Proceeding, the Judges, using the relative marketplace value standard, determined the relative values of six programming categories (including the four categories at issue in this proceeding) in a hypothetical unregulated or free market where compulsory licensing does not exist.4 Table 1 below shows the Judges’ relative allocations for each category within Section 111’s Basic Fund.5

2 2010-13 Final Cable Determination at 3555-56. The Judges also have used the “relative marketplace value” standard in Phase II satellite proceedings. See Final Determination of Royalty Distribution, No. 2012-6 CRB CD 2004-09 (Phase II) and No. 2012-7 CRB SD 1999-2009 (Phase II), at 5 (February 13, 2019). 3 2010-13 Final Cable Determination at 3555, n. 17 (“In this proceeding, the Judges distinguish between ‘relative values’ (to describe the allocation shares), and absolute ‘fair market values.’ Because the royalties at issue in this proceeding are regulated and not derived from any actual market transactions, they do not correspond with absolute dollar royalties that would be generated in a market and thus would not reflect absolute ‘fair market value.’”) (emphasis in original). 4 2010-13 Final Cable Determination at 3555-56. 5 The Judges’ allocations in the Cable Proceeding did not include shares for Music Claimants and National Public Radio (“NPR”), because the parties had agreed to settlements regarding those shares. 2010-13 Final Cable Determination at 3552. The Judges’ allocations in this proceeding will also not include shares for Music Claimants and NPR, as Music Claimants settled their claims and NPR is not a party to this proceeding. Additionally, while the Judge’s allocations in the Cable Proceeding included shares for Public Television and Canadian Claimants, those claimants are not involved in this proceeding.

Written Direct Testimony of Andrew R. Dick, Ph.D. | 4

Table 1: Section 111 Royalty Allocations by Program Category, 2010-13 Programming Category 2010 2011 2012 2013 Joint Sports Claimants 32.9% 30.2% 33.9% 36.1% Program Suppliers 26.5% 23.9% 21.5% 19.3% Public TV 14.8% 18.6% 17.9% 19.5% Commercial TV 16.8% 16.8% 16.2% 15.3% Canadian Claimants 5.0% 5.0% 5.0% 5.5% Devotional Programs 4.0% 5.5% 5.5% 4.3% Source: Table 1 of the 2010-13 Final Cable Determination.

11. Economists, the Judges of the Copyright Royalty Board, and judges in many other fora, frequently use comparative benchmarking as a tool to predict the outcome of one set of circumstances based on a second set of circumstances. Section III of my report applies the standard for benchmarking articulated by the Judges in the recent Cable Proceeding to the retransmission of distant broadcast television signals by satellite.

B. Assignment

12. I have been retained on behalf of the JSC to provide expert economic testimony relevant to allocating royalties from the satellite retransmission of distant signals between 2010 and 2013. In particular, I was asked to evaluate whether the allocation of royalties by the Judges in the 2010-2013 Cable Final Determination is an appropriate benchmark for determining the relative market value of programming distantly retransmitted by satellite carriers during 2010-13.

C. Summary of Main Opinions6

13. Based on my expert analysis, I have reached the following main opinions:

a) The relative marketplace value framework applied by the Judges in reaching the 2010-13 cable royalty allocation was grounded in well- established economic principles known as “revealed preference” and “willingness-to-pay.” These principles are routinely employed by economists and are not unique to cable retransmission of broadcast

6 I reserve the right to amend or supplement this report as I continue my analysis.

Written Direct Testimony of Andrew R. Dick, Ph.D. | 5

television programming. Rather, the principles have broad applicability and they provide a solid economic foundation for applying the Judges’ reasoning from the 2010-13 Cable Proceeding to allocate royalties for the satellite retransmission of compensable television programming on distant signals. b) Because the Judges’ analytical framework in the 2010-13 Cable Proceeding is aligned with well-established economic principles, it is appropriate to rely on the resulting royalty allocation as a benchmark in the current satellite proceeding provided that the Judges’ four-part test for benchmarking is satisfied. c) The royalty allocation resulting from the 2010-13 Cable Proceeding satisfies the four-part benchmarking test from an economic perspective. Specifically, my analysis finds that [1] the relevant parties in the cable and satellite royalty allocation proceedings are economically comparable; [2] the rights being valued in the two proceedings are economically comparable; [3] CSOs and satellite carriers face highly similar economic circumstances in large measure because they are direct competitors to one another; and [4] the rights valuation methodology is predicated on there being an adequate degree of competition to assign relative values to different program categories. d) Based on my analysis, therefore, the 2010-13 Cable Final Determination provides a sound benchmark for the allocation of satellite royalties from distant signal retransmission, with an appropriate adjustment to account for the absence of Canadian and Public Television programming in the current proceeding. e) To apply the royalty allocations from the 2010-13 Cable Final Determination, it is necessary to account for the fact that the Section 119 license does not cover Public Television and Canadian signals.

Written Direct Testimony of Andrew R. Dick, Ph.D. | 6

D. Economic Principles Underlying the Standard

14. As I noted previously, the current proceeding involves the allocation of compulsory licensing royalties paid by satellite carriers to retransmit certain non-network and network television programming on distant signals between 2010 and 2013. Sections 111 and 119 of the Copyright Act grant CSOs and satellite carriers, respectively, the right to retransmit certain distant broadcast signals to their subscribers without negotiating royalty rates with the copyright owners of the constituent programming that is being retransmitted. Statutory licensing was viewed as a cost-effective way to eliminate the transaction costs of carriers negotiating with every copyright owner whose work was embedded in a broadcast signal that a CSO or satellite carrier wanted to retransmit to its subscribers. 7 Because licensing was compulsory, this necessitated creating a system whereby CSOs and satellite carriers could compensate programming rights owners by paying them royalties that effectively mimic the relative payments rights-holders would expect to receive in a free—or unregulated—marketplace.8

15. While I understand the Judges have never adjudicated a satellite allocation proceeding, it makes economic sense to apply the same relative marketplace value standard here as the Judges applied in the cable proceedings. There is no economic justification for allocating to the program categories an amount other than what they would have received in a free market absent any compulsory licensing requirement.9

16. The relative marketplace value framework applied by the Judges in the 2010-13 cable royalty proceeding embodied well-accepted economic principles of “revealed preference” and “willingness-to-pay.” These principles transcend the particular technology or medium used to retransmit programming signals. Because the Judges’ analytical framework in the 2010-13 Cable Proceeding is aligned with well-accepted and broadly-applicable economic principles, it is appropriate to rely on the resulting royalty

7 U.S. Copyright Office, Satellite Home Viewer Extension and Reauthorization Act Section 109 Report: A Report of the Register of Copyrights, June 2008 at i-ii, 3. 8 U.S. Government Accountability Office, Statutory Copyright Licenses: Stakeholders’ Views on a Phaseout of Licenses for Broadcast Programming¸ May 2016 (GAO-16-496) at 5-8; 2010-13 Final Cable Determination at 3555. 9 2010-13 Final Cable Determination at 3555.

Written Direct Testimony of Andrew R. Dick, Ph.D. | 7

allocation as a benchmark in the satellite proceeding, conditional on passage of the Judges’ four-part test for benchmarking, which I will describe in Section III and assess in Section IV of my report.

1. Revealed Preference in a Free Marketplace

17. The Judges in the 2010-13 Cable Proceeding noted that “[r]elative value is based on the preferences of the CSOs (derived from those of their subscribers)” 10 and commented that “‘[r]elative marketplace values’ in these proceedings have been defined as valuations that ‘simulate [relative] market valuations as if no compulsory license existed.’”11

18. Preferences are said by economists to be “revealed” through a buyer’s observed choices among alternative available product bundles when the buyer is presented with alternative menus of relative prices. 12 Mechanically, economists typically apply the revealed preference principle as follows. 13 Holding total expenditure constant, the economist observes how a purchaser varies which product bundle it chooses as relative prices change. An economist may collect this information through a survey that asks industry participants what choices they would make if they faced hypothetical price menus. Alternatively, the economist may collect historical data on purchasing choices and price variation and then analyze these data using standard empirical methods (such as regression analysis). Regardless of the precise information source or methodology used by the economist, the process of analyzing product choices and price information allows the economist to uncover underlying preferences about how the purchaser ranks each of the products that make up the bundle. The economist can then use this information to predict what bundle the buyer would select if they were presented with an alternative menu of relative prices.

10 2010-13 Final Cable Determination at 3556 (emphasis in the original). 11 2010-13 Final Cable Determination at 3555. 12 Hal R. Varian, Intermediate Microeconomics: A Modern Approach (W.W. Norton & Co., 7th ed., 2005) at 122. See also Angus Deaton and John Muellbauer, Economics and Consumer Behavior (Cambridge Univ. Press, 1980) at 51-53. 13 See, e.g., Edwin Mansfield, Applied Microeconomics (W.W. Norton & Co., 1994) at 83-85.

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19. The economic significance of the revealed preference principle is that by observing variation across different settings (e.g., across local television markets or over time) in the choices actually made by industry participants (e.g., signal carriage decisions by CSOs or satellite carriers), economists can “back out” the menu of relative prices in a free marketplace that would have led the economic agent to select exactly those choices. In the language of economics, the revealed preferences of buyers are “building blocks for ‘individual and market demand.’” 14 The Judges implicitly recognized and directly applied this economic principle in the 2010-13 Cable Proceeding when they noted that “any methodology based on the identification of the relative preferences and values of CSOs is indeed a market-based approach to the allocation of royalties in this proceeding.”15

20. Revealed preference is a fundamental principle that underlies the micro-economic theory of purchaser behavior. The principle has broad applicability because it requires no assumptions other than buyers (like any other economic agent) have preferences and they choose the most preferred bundle of products subject to their budget (or expenditure) constraint. Importantly for this proceeding, therefore, the revealed preference principle is in no way unique to CSOs choosing which broadcast television signals to retransmit. Revealed preference has broad applicability, including in particular to the valuation of programming on distant signals carried by satellite carriers. All that is required to apply the revealed preference principle in the present setting is the twin assumption that satellite carriers have preferences over different programming types (derived from the preferences of their own downstream subscribers) and that carriers choose their programming lineup optimally (i.e., consistent with profit maximization). 16 Industry

14 Andrew Schotter, Microeconomics: A Modern Approach (South-Western Cengage Learning, 2009), cited in 2010-13 Final Cable Determination at 3556. 15 2010-13 Final Cable Determination at 3556. See also 2010-13 Final Cable Determination at 3556 (“Because relative preferences are components of market demand, the CSOs’ choices represent important elements of a market transaction.”). 16 Kenneth E. Train, Discrete Choice Methods with Simulation (Cambridge Univ. Press, 2d ed., 2009) at 152. See also Michael L. Katz and Harvey S. Rosen, Microeconomics (Irwin/McGraw Hill, 3rd ed., 1998) at 311 (“[T]he demand for an input depends on, or is derived from, the demand for the final product. Therefore, the demand for an input is said to be a derived demand.”).

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expert testimony17 and economic analyses of the video television distribution industry18 confirm these assumptions.

2. Willingness-to-Pay

21. The second fundamental economic principle that the Judges applied in the 2010- 13 Cable Proceeding is known as “willingness-to-pay.” In their decision, the Judges noted that programming valuation in an unregulated market would be determined “by the CSOs’ demand as reflected in their willingness to pay.” 19 Just as the (revealed) preferences of CSOs and satellite carriers with respect to programming bundles are derived from the underlying preferences of their downstream subscribers, so too the willingness of CSOs and satellite carriers to pay for the right to retransmit signals reflects the aggregation of demands by end consumers for subscription packages made up of those programming signals.

22. Economists summarize willingness-to-pay using the construct of a demand curve: this shows the maximum that a purchaser (or group of purchasers) would be willing to pay for any given quantity of a product.20 The demand curve aggregates and orders individual purchasers’ willingness-to-pay metrics so as to determine, operating in conjunction with the industry supply curve, the price at which a free market would clear. This economic methodology is consistent with the Judges’ stated objective of

17 See, e.g., Written Direct Testimony of Daniel M. Hartman In Re: Distribution of Satellite Royalty Funds (No. 14-CRB-0011-SD (2010-13)), March 22, 2019 (hereinafter “Hartman 2010-13 Satellite WDT”) at ¶12; Written Direct Testimony of David Shull In Re: Distribution of Satellite Royalty Funds (No. 14-CRB- 0011-SD (2010-13)), March 22, 2019 (hereinafter “Shull 2010-13 Satellite WDT”) at ¶¶20, 26-32; JSC Ex. 2, Written Direct Testimony of Daniel M. Hartman In Re: Distribution of Cable Royalty Funds (No. 14- CRB-0010-CD (2010-13)), December 22, 2016 (hereinafter “Hartman 2010-13 Cable WDT”) at ¶5 (the “selection of channels to launch (and, subsequently, whether to maintain them on the platform) involved an in-depth cost/benefit analysis”). See also JSC Ex. 5, Written Direct Testimony of Allan Singer, In Re: Distribution of Cable Royalty Funds (No. 14-CRB-0010-CD (2010-13)), December 22, 2016 (hereinafter “Singer 2010-13 Cable WDT”) at Section III. 18 See, e.g., Chenghuan Sean Chu, “The effect of satellite entry on cable television prices and product quality,” RAND Journal of Economics, 41(4) (Winter 2010): 730–764. In the cable royalty allocation proceeding, the Judges likewise assumed that MVPDs behave rationally by preferring greater profit over less. See 2010-13 Final Cable Determination at 3569, n. 71. 19 2010-13 Final Cable Determination at 3583. 20 Gary S. Becker, Economic Theory (Alfred A. Knopf, 1971) at 11.

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determining the relative marketplace values of each programming category in a hypothetical free market.

23. Economists have used willingness-to-pay to analyze and measure the level of demand in many industries. For example, the willingness-to-pay construct has been used to study demand for the bundles of services provided by hospitals21 and the demand for mortgage lending. 22 Economists also have applied willingness-to-pay principles to estimate demand for MVPD services.23 As with the principle of revealed preference, the concept of willingness-to-pay has broad applicability across a wide range of economic settings.

24. In the context of cable and satellite retransmission of distant signals, there is a one-to-one connection between willingness-to-pay and relative marketplace values for programming created by virtue of the way that CSOs and satellite carriers earn revenue. CSOs and satellite carriers choose channels to carry, construct channel lineups, bundle channels into tiers of service or “packages,” and then offer these service packages to subscribers for a monthly fee. As part of this same programming decision, carriers also select which distant signals they wish to carry as part of their service offering. Carriers earn the large majority of their revenues from subscription fees, and earn a much smaller amount from selling advertising spots on channels that permit ads. 24 In particular, carriers do not earn any advertising revenue from retransmission of distant broadcast

21 Cory Capps, David Dranove, and Mark Satterthwaite. “Competition and market power in option demand markets,” RAND Journal of Economics (2003): 737-763. 22 Jason Allen, Robert Clark, and Jean-François Houde. “Price Negotiation in Differentiated Products Markets: Evidence from the Canadian Mortgage Market,” Bank of Canada Working Paper 2012-30, August 2012. 23 Tasneem Chipty. “Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry,” American Economic Review 91, no. 3 (June 2001): 428-453. 24 For example, SNL Kagan estimates that in each year between 2011 and 2013, advertising revenue accounted for only 2.6% to 3.0% of satellite carriers’ total revenue. Mari Rondeli, “DBS facing modest long-term customer losses,” SNL Kagan Multichannel Market Trends, August 28, 2012 (and accompanying spreadsheet). See also Hartman 2010-13 Satellite WDT at ¶7 (“Monthly subscriber fees from these customers are by far the most significant source of revenue to both cable and satellite MVPDs. As a result, attracting and maintaining these subscribers is necessarily the lifeblood of MVPDs . . . .”); Shull 2010-13 Satellite WDT at ¶15 (“In the 2010-13 period, Dish earned approximately 90% of its revenue from subscriber fees and 2-5% from advertising.”); Singer 2010-13 Cable WDT at ¶13 (“subscriber fees comprise the vast majority of the revenue CSOs derive from their video service offerings”).

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signals, be they network or non-network.25 All value derived from direct signal carriage therefore stems from whatever incremental subscriber revenues the operator can earn from including the distant signal in its subscription packages. This means that distant signal carriage decisions—which are directly observable marketplace actions—fully inform us about carriers’ willingness-to-pay for those signals, and therefore about the relative marketplace value created by carrying distant signals. This is true notwithstanding the fact that underlying signal prices are not set in an unregulated market. To reiterate, as a matter of economics, this conclusion applies both to satellite and cable carriage of distant signals.

25. There is an additional commonality between how CSOs and satellite carriers retransmit distant signals, and this feature has important implications for how specialty programming such as live team sporting events contributes to signal value. Signals typically comprise a variety of programming types—for example, on any particular day WGN America’s signal might have bundled together a combination of live professional team sports, syndicated series, infomercials, and movies. 26 By regulation, CSOs and satellite carriers cannot choose to “unbundle” a distant signal by carrying only a subset of the programs that make up the signal.27 The economics of this bundling are that carriers generally can extract a larger fraction of subscribers’ overall willingness-to-pay for programming when the subscribers who particularly like one type of content place less value on other types of content. Bundling allows the carrier to exploit these idiosyncrasies or negative correlations28 in individual subscribers’ willingness-to-pay so as to charge a higher monthly subscription fee than would be profitable if programming

25 U.S. Government Accountability Office, Local Media Advertising: FCC Should Take Action to Ensure Television Stations Publicly File Advertising Agreements¸ May 2016 (GAO-16-349) at 10. 26 Written Direct Testimony of James M. Trautman In Re: Distribution of Satellite Royalty Funds (No. 14- CRB-0011-SD (2010-13)), March 22, 2019 (hereinafter “Trautman 2010-13 Satellite WDT”) at 19, Table 7. WGN America (“WGNA”) is the superstation signal of WGN. WGN also offers a local over-the-air broadcast signal in the Chicago television market (“WGN Chicago”). WGNA programming that aired simultaneously on both WGNA and WGN Chicago is compensable under Sections 111 and 119. Id. at 16- 17. Carriage of WGNA accounts for the majority of Sections 111 and 119 royalties. Id. at 13-15. 27 17 U.S.C. 111(c)(3); 17 U.S.C. 119(a)(5) (barring “willful alterations” of a signal “through changes, deletions, or additions”). 28 Negative correlation is a relationship between two variables such that as the value of one variable increases, the value of the other variable decreases.

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were sold on an unbundled basis.29 This means content that is more highly differentiated and valued by a passionate group of consumers (e.g., live team sports) will tend to create the greatest incremental value when it is added to a programming bundle. In contrast, programming with less differentiation and whose average valuation therefore tends to be more similar across subscribers (e.g., syndicated sitcoms and dramas) will tend to generate less incremental value within a programming bundle. Empirical analysis has borne out this prediction.30

3. Conclusion

26. To summarize, the Judges’ framework from the 2010-13 Cable Proceeding of imputing valuations for distant signal programming that “simulate [relative] market valuations as if no compulsory license existed”31 is based on well-established economic principles of revealed preference and willingness-to-pay, which are embedded in observable signal carriage decisions. These economic principles are not unique to the particular technology by which distant signals happen to be retransmitted—be it cable or satellite. In the next section, I evaluate economic evidence for whether the relative marketplace valuations determined by the Judges in the Cable Proceeding constitute a sound benchmark for the current satellite proceeding.

III. BENCHMARK ANALYSIS

A. Benchmark Standard

27. I understand the 2010-13 Final Determination in the Cable Proceeding articulated the following standard for establishing a relevant benchmark:

29 The canonical economics reference on this topic is George J. Stigler, “United States v. Loew’s Inc.: A Note on Block Booking,” Supreme Court Review (1963):152-57 and reprinted in George J. Stigler, The Organization of Industry (University of Chicago Press, 1968):165-70. For an application to media distribution, see Gregory S. Crawford, “The discriminatory incentives to bundle in the cable television industry,” Quantitative Marketing and Economics (March 2008), 6(1): 41-78. 30 See, e.g., Gregory S. Crawford, “The discriminatory incentives to bundle in the cable television industry,” Quantitative Marketing and Economics (March 2008), 6(1): 41-78 (showing that bundling in “special interest” content provides a significantly greater boost to carrier profits than bundling in “general interest” content, citing sports as an example of “special interest” programming and finding that bundling ESPN had among the largest impact on carrier profits). 31 2010-13 Final Cable Determination at 3555, citing 1998–99 Librarian Order, 69 FR at 3608.

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“When Judges decide whether and how to weigh such benchmark evidence, they begin with the following foundational analysis that is equally applicable here: In choosing a benchmark and determining how it should be adjusted, a rate court must determine [1] the degree of comparability of the negotiating parties to the parties contending in the rate proceeding, [2] the comparability of the rights in question, and [3] the similarity of the economic circumstances affecting the earlier negotiators and the current litigants, as well as [4] the degree to which the assertedly analogous market under examination reflects an adequate degree of competition to justify reliance on agreements that it has spawned.”32

28. In this section, I review and evaluate the available economic evidence relevant to each criterion of this benchmarking standard. Because the Judges’ analytical framework in the 2010-13 Cable Proceeding is aligned with well-accepted economic principles, it is appropriate to rely on the resulting allocation as a benchmark in the satellite proceeding, conditional on passage of the Judges’ four-part test. As I describe in greater detail below, the allocation resulting from the Cable Proceeding satisfies all four of these conditions.

29. In both the satellite and cable proceedings, the licensees and licensors are economically comparable. The licensors in both proceedings are essentially identical— broadcast stations whose signals are carried to distant subscribers by MVPDs. The licensees are also highly similar, with CSOs and satellite carriers both delivering video programming to subscribers using their respective transmission technologies. In both proceedings, CSOs and satellite carriers are relying on similar rights granted in Sections 111 and 119 of the Copyright Act, respectively, to provide distant signals to their video programming subscribers.

30. CSOs and satellite carriers also faced similar economic circumstances as they competed head-to-head for subscribers. CSOs and satellite carriers competed for subscribers through offering desirable packages of programming at a competitive price. The cost of securing this programming was significant for CSOs and satellite carriers alike, and both types of MVPDs recognized that certain types of programming were

32 2010-13 Final Cable Determination at 3602 (citation omitted). I understand that benchmarks have been applied in other copyright proceedings. See, for example, Determination of Royalty Rates and Terms for Making and Distributing Phonorecords, 84 Fed. Reg. 1918, at n. 83 (February 5, 2019) (“Phonorecords III”); Determination of Royalty Rates and Terms for Ephemeral Recording and Webcasting Digital Performance of Sound Recordings, 81 Fed. Reg. 26316, at 26374 (May 2, 2016) (“Web IV”).

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particularly important when competing for subscribers. Given these similarities, the allocations from the Cable Proceeding are the most appropriate benchmark for allocating the satellite royalties.

B. Benchmarking Is a Standard Economic Method

31. Before addressing the specific criteria enunciated for benchmarks in the 2010-13 Cable Proceeding, I begin by noting that benchmarking is a standard empirical method widely used by economists. Economists frequently use the benchmarking method to answer “what if” or “but for” questions. Common economic applications of benchmarking include analyzing competitive choices or outcomes for consumers or businesses under different regulatory regimes, comparing prices before versus after the entry or exit of a competitor, and estimating damages in antitrust cases.

32. To apply the benchmark method to a variable of interest, an economist takes the variable’s outcome generated under a particular set of economic conditions or circumstances as a reference point, makes suitable modifications (where necessary and appropriate) to account for differences in underlying circumstances, and extrapolates to predict the variable’s outcome under a different but comparable set of conditions. As a leading treatise on economic methods used in antitrust litigation explains: “in a benchmark analysis, the variable of interest (e.g., price) in the affected market is compared to that variable in an unaffected benchmark market … the benchmark approach uses prices in the unaffected market as a control. The benchmark market (or markets) can be a different area or a different end use market.” 33 As a simple but concrete example, a variable of interest could be the price of mid-size passenger vehicles and the economic circumstances associated with the reference point might be a period of strong demand for new automobiles. To predict what price would likely prevail for full-size passenger vehicles under similar demand conditions, the economist can benchmark against the initial reference point and extrapolate by making appropriate adjustments to account for meaningful economic differences between mid-size and full-size vehicles.

33 ABA Section of Antitrust Law, Proving Antitrust Damages (American Bar Association, 2d ed., 2010) at 174.

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33. The concept of benchmarking is extremely generalizable, and does not hinge on precise requirements about the market conditions under which the reference point was observed. For example, it is not necessary that the reference point be generated under a particular set of economic conditions and circumstances, such as a perfectly competitive and free (unregulated) market. The economist must only be able to identify or determine the economic conditions and circumstances associated with the reference point in order to be able to draw a comparison when extrapolating to different conditions or circumstances. Nor is the reliability of benchmarking limited to settings where the reference point was itself directly observable in real-world data. For example, a valid reference point for benchmarking can be generated from an economic model or hypothetical construct.34 As long as the model that produces the reference point was constructed according to rigorous and well-accepted methods, an economist can perform a benchmarking exercise.35 In summary, benchmarking is recognized by economists to be a sound method of extrapolation provided that the major factors that determine economic outcomes in the two settings that the analyst is reviewing are similar and directly comparable.36

34. The factors that a trained and experienced economist considers when evaluating the suitability of a potential benchmark are the same as those enunciated by the Judges in the 2010-13 Final Cable Determination. The concepts of “comparability” between negotiating parties and the rights in question, “similarity of economic circumstances,” and the “adequacy of competition” are highly familiar to economists. Economists routinely apply these same concepts to assess the suitability or reliability of potential benchmarks when analyzing empirical questions. As I explain in the remainder of this section of my report, and as will be evident from the application of these criteria in

34 As an example, an economist might use a model to estimate damages associated with anticompetitive conduct affecting a certain product or geographic area and then use the results from that model as a reference point to benchmark estimated damages for another similarly-situated product or geography. 35 See, e.g., ABA Section of Antitrust Law, Proving Antitrust Damages (American Bar Association, 2d ed., 2010) at 131. 36 See, e.g., Alan B. Krueger, “Teaching the Minimum Wage in Econ 101 in Light of the New Economics of the Minimum Wage,” Journal of Economic Education, 32(3) (Summer 2001): 243–258.

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practice, the concepts as articulated by the Judges have concrete economic meanings and are directly testable using standard economic methods.

C. Benchmark Criteria

1. Comparability of the Negotiating Parties to Parties in the Proceeding

35. The first articulated criterion for selecting a benchmark is to assess “the degree of comparability of the negotiating parties to the parties contending in the rate proceeding.” The negotiating parties are those entities who would be negotiating for carriage in a hypothetical market. The relevant negotiators in the hypothetical market in cable and satellite royalty proceedings are the licensors and licensees of distant broadcast signals.

36. The licensor of the right to retransmit a distant broadcast signal in a hypothetical free market— the broadcast station that assembled the programming on the signal—is the same in both Section 111 and Section 119 proceedings. As the Judges recently held in the 2010-13 Cable Final Determination, “it remains reasonable to consider the local stations that have bundled the programs into their respective signals to be the hypothetical sellers.”37 As a matter of economics, it makes sense that local broadcast stations would also be the hypothetical sellers to satellite carriers, given the shared goal of avoiding the transaction costs of bilateral negotiations with hundreds of individual program copyright owners.

37. Turning next to the licensees in the two proceedings, these are CSOs and satellite carriers. An economist can assess comparability between two groups of economic actors by comparing factors such as their (i) economic roles, (ii) business models, (iii) product offerings, and (iv) demand and cost drivers.38 Determining that two parties are head-to- head competitors provides perhaps the clearest and most direct economic evidence that the parties are highly comparable, because this indicates that the parties share strong similarities from the standpoint of their overall value proposition.

37 2010-13 Final Cable Determination at 3555. 38 Theon van Dijk and Frank Verboven, “Quantification of Damages,” chapter 93 in Issues in Competition Law and Policy (W.D. Collins, ed.), American Bar Association, Antitrust Section, 2008, 2331-2348 at 2336.

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38. CSOs and satellite carriers perform the same basic economic function and have very similar business models. Cable and satellite are substitute technologies for distributing television signals to households and non-residential customers (e.g., hotels, restaurants, bars). As industry experts testified in this proceeding and the 2010-13 Cable Proceeding, while the actual physical equipment used in cable distribution and satellite distribution is different,39 both technologies enable carriers to provide customers with the ability to view secondary transmissions of out-of-market distant broadcast signals along with other programming. As a matter of economics, therefore, the two technologies perform the same basic economic function.

39. The business models of CSOs and satellite carriers also are highly similar.40 Both types of firms compete for subscribers by offering bundles of programming for monthly subscriber fees. CSOs and satellite carriers both follow subscription-based revenue models. Monthly fee revenue from subscribers accounts for the vast majority of revenue from video offerings for both types of companies.41 Comparability between business models is particularly apparent in the context of the current proceeding, because neither CSOs nor satellite carriers are permitted to insert or sell advertising on distant signals carried pursuant to Section 111 or 119 licenses, respectively.42 This means that CSOs and satellite carriers value distant signals exclusively for the purpose of maintaining and expanding their subscriber bases.

40. CSOs and satellite carriers also offer directly comparable products to prospective subscribers. As previously explained, both types of MVPDs offer customers a menu of programming options (e.g., packages or service tiers) that are chosen to appeal to

39 “Traditional cable television is generally delivered from a headend via coaxial or fiber-optic cables into the home. Satellite television is delivered via satellite transmission to a satellite dish (generally affixed to the rooftop of a residential dwelling) and a wired connection into that dwelling.” Hartman 2010-13 Cable WDT at ¶11. 40 See Hartman 2010-13 Satellite WDT at ¶¶7, 20-22; Shull 2010-13 Satellite WDT at ¶¶16-19. 41 Hartman 2010-13 Satellite WDT at ¶7; Shull 2010-13 Satellite WDT at ¶15; Singer 2010-13 Cable WDT at ¶13. 42 17 U.S.C. 119(a)(5) prohibits “willful alterations” of a station’s transmission by a satellite carrier “through changes, deletions, or additions.” Similarly, 17 U.S.C. 111(c)(3) prohibits cable companies from altering distant signals carried under Section 111.

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prospective subscribers. 43 Programming executives for CSOs and satellite carriers expend significant time and energy in selecting their programming mix so as to make their products as strong a competitor in the marketplace as possible. 44 Of particular relevance to this proceeding, I understand that in terms of distant broadcast signals carried during the 2010-13 timeframe, WGNA was an important signal carried pursuant to the compulsory licenses for both satellite and cable carriers.45

41. Between 2010 and 2013, WGNA accounted for approximately 73 percent of the total distant signal subscriber instances under both Sections 111 and 119.46 WGNA also accounted for the substantial majority of royalties paid under both sections.47 In addition, the great majority of the distant signals retransmitted by satellite carriers were also retransmitted by one or more cable carriers. 48 In each year during 2010-13, distant signals carried under both Sections 111 and 119 accounted for between 95 and 98 percent of the fees generated under Section 119 and between 84 and 88 percent of the fees generated under Section 111.49 Thus, from the perspective of the programming at issue in the current proceeding, it is clear that CSOs and satellite carriers were highly comparable during the relevant time period.

43 The economic concept of “comparability” does not require that two parties offer identical program lineups to each other. As a matter of competition, economists expect to observe some differences in the specific product bundles offered by different competitors. Economists use the term “competitive product differentiation” to refer to the fact that an important way that firms try to steal business from one another is by designing their product offering be as attractive as possible relative to the products offered by their direct competitors. See, e.g., George A. Hay, “Market Power in Antitrust,” Antitrust Law Journal, 60(3) (1992): 807–827 at 814-816. Restaurants provide a familiar example. Restaurants compete to attract patrons and often do so by differentiating their daily specials, ambiance and décor, and menu pricing, among other competitive features. This differentiation is itself direct evidence that restaurants compete head-to-head. 44 Hartman 2010-13 Satellite WDT at ¶12; Shull 2010-13 Satellite WDT at ¶20; Hartman 2010-13 Cable WDT at ¶5. 45 Hartman 2010-13 Satellite WDT at ¶25; Shull 2010-13 Satellite WDT at ¶26; Hartman 2010-13 Cable WDT at ¶¶12-13. See also Singer 2010-13 Cable WDT at ¶18. 46 Trautman 2010-13 Satellite WDT at 12, Table 4. 47 Trautman 2010-13 Satellite WDT at 13-15. 48 Trautman 2010-13 Satellite WDT at 15-16. 49 Id.

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42. Economists also often look to similarities in major cost and demand drivers when evaluating the comparability of two parties. The same primary economic factors drive CSOs’ and satellite carriers’ demand for and cost of programming. With respect to the most important demand drivers, a former CSO executive has testified that “[t]he ability of particular programming to support customer acquisition and retention is a crucial factor in carriage decisions because subscriber fees comprise the vast majority of the revenue CSOs derive from their video service offerings.” 50 This is no less true for satellite carriers. A former senior executive in charge of program acquisition at DirecTV testified that “the selection of programming offered to customers is of tantamount importance to all MVPDs, including cable and satellite. Both cable operators and satellite providers value programming in essentially the same way.” 51 Facing highly similar demand pressures strengthens the economic comparability between CSOs and satellite carriers from the standpoint of how they value programming signals.

43. With respect to important cost drivers, testimony from these former cable and satellite executives also provides evidence supporting strong comparability. A former Comcast Senior Vice President for Content Acquisition testified that “managing programming expense also is a crucial consideration for any CSO. Much of these costs can be explained by the critical necessity to carry sports services so as not to lose subscribers, and the high cost associated with sports programming relative to other types of programming.”52 Again, this is no less true for satellite carriers. A former DirecTV Senior Vice President for Programming Acquisitions testified that the “selection of channels to launch (and, subsequently, whether to maintain them on the platform) involved an in-depth cost/benefit analysis” and “[d]uring 2010-13 the average per channel cost for channels containing sports far outweighed the average cost per channels

50 Singer 2010-13 Cable WDT at ¶13. 51 Hartman 2010-13 Cable WDT at ¶8. See also Hartman 2010-13 Satellite WDT at ¶21 (“MVPD executives are . . . all driven by the same key considerations as they execute their respective business plans.”); Shull 2010-13 Satellite WDT at ¶¶16-19. 52 Singer 2010-13 Cable WDT at ¶19.

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devoted to non-sports programming.”53 Another important economic factor that helped drive economic comparability between programming cost pressures for CSOs and satellite carriers was that the two largest satellite carriers DISH Network (“DISH”) and DirecTV used most favored nations clauses (“MFNs”) that were tied to carriage prices for large MVPDs, including cable operators. 54 The use of MFNs meant that programming cost changes experienced by CSOs would be directly felt by competing satellite carriers.

44. Given the strong comparability between CSOs’ and satellite carriers’ economic roles, business models, product offerings, and demand and cost drivers, it is unsurprising that a substantial body of evidence shows these two groups of firms are close head-to- head competitors. As an initial matter, this competition is apparent to MVPD industry participants, including former DirecTV and DISH programming executives who testified that CSOs and satellite carriers compete head-to-head using the same types of programming. 55 In their annual securities reporting, both DirecTV and DISH have described the competition they face from CSOs as “substantial.”56 Economic studies of the video television industry provide econometric evidence confirming this head-to-head competition. For example, a recent economic study analyzing the effect of satellite entry on cable television prices and product quality confirmed that competition between cable and satellite systems manifested itself in both price and quality competition. 57 An econometric study of competition between cable and satellite video service providers found that this competition led to lower cable subscription prices and higher cable service

53 Hartman 2010-13 Cable WDT at ¶¶5, 29. See also Hartman 2010-13 Satellite WDT ¶12 (MVPDs closely examine whether each channel brings “value to the platform in comparison to its cost”). 54 Hartman 2010-13 Satellite WDT at ¶22; Shull 2010-13 Satellite WDT at ¶17-18. Many affiliate agreements include most favored nations, or “MFN,” clauses. 55 Shull 2010-13 Satellite WDT at ¶¶16-17, 19; Hartman 2010-13 Satellite WDT at ¶¶7, 20-22; Hartman 2010-13 Cable WDT at ¶16. 56 DirecTV 10-K for the Fiscal Year Ended December 31, 2012 at 9; DISH Network Corporation 10-K for the Fiscal Year Ended December 31, 2012 at 4. 57 Chenghuan Sean Chu, “The effect of satellite entry on cable television prices and product quality,” RAND Journal of Economics, 41(4) (Winter 2010): 730–764 (“The entry of Direct Broadcast Satellite into the market for subscription television brought an alternative that offered higher quality than existing cable options. Cable incumbents thus faced pressure to lower prices, raise quality, or engage in some combination of the two.”).

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quality.58 And a study by Federal Communications Commission (“FCC”) economists reported econometric evidence that the availability of satellite service acts as a competitive constraint on cable service rates.59

45. In sum, the evidence on head-to-head competition between CSOs and satellite carriers provides perhaps the clearest and most direct economic evidence that the parties in the cable and satellite proceedings are highly comparable.

2. Comparability of the Rights in Question

46. The second criterion for selecting a benchmark is to assess the comparability of the rights in question. In the present context, this involves an assessment of the economic comparability between distant signal licensing rights pursuant to Section 111 (cable distribution) and Section 119 (satellite distribution). An economist applies the same general principles and methods to assess licensing rights as to study other types of products in which parties transact. The fact that licensing of distant signals is compulsory and that royalties are set pursuant to statute rather than through arms-length negotiations in a free market does not change the basic question of whether two sets of rights are economically comparable. The economic comparison involves an analysis of whether a licensor of the two sets of rights can monetize them in a comparable fashion and expect to receive comparable compensation for its licensed rights; and on the licensee’s side, whether a licensee can exercise the two sets of rights in comparable ways and expect to be able to monetize its use of the licensed rights similarly. As I will explain below, these questions are all answerable in the affirmative for distant signal retransmission rights licensed to CSOs and satellite carriers.

47. The licensing rights governed by Sections 111 and 119 are economically comparable. Each set of rights gives the licensee the right to retransmit distant broadcast

58 Austan Goolsbee and Amil Petrin, “The Consumer Gains from Direct Broadcast Satellites and the Competition with Cable TV,” Econometrica 72(2) (March 2004): 351-81 (“more competition from DBS is correlated with lower cable prices and somewhat higher quality cable”). 59 Andrew S. Wise and Kiran Duwadi, “Competition between Cable Television and Direct Broadcast Satellite: The Importance of Switching Costs and Regional Sports Networks,” Journal of Competition Law and Economics, 1(4) (December 2005): 679-705 (the authors’ “findings are consistent with the hypothesis that DBS [direct broadcast satellite] providers are a constraining factor on quality-adjusted price increases for basic cable services by cable firms.”).

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television signals to its subscribers. Under both licenses, the licensee is prohibited from altering the signals that it chooses to retransmit.60 In particular, I understand that MVPDs cannot insert advertising on a distant signal.61 The economic significance of this shared usage restriction on CSOs and satellite carriers is that the only way they can monetize the value of licensed distant signals is through attracting and retaining subscribers. 62 Because, as I have previously explained, CSOs and satellite carriers compete head-to- head for subscribers, this means that the potential revenue opportunities—and therefore the economic valuations that CSOs and satellite carriers can be expected to attach to distant signals—will be strongly comparable.

48. The signals that a licensee may transmit pursuant to Sections 111 and 119 are very similar. Programming retransmitted via satellite had a similar composition as programming retransmitted via cable during the relevant time period. CSOs and satellite carriers were roughly comparable in terms of their relative volumes of programming in each of the four categories covered in this proceeding (i.e., live telecasts of professional and college team sports; syndicated series, specials and movies; programs produced by or for a commercial television station and only broadcast by that station; and religiously- themed syndicated programs).63

49. Furthermore, as noted above, WGNA was the most widely-carried distant signal by both CSOs and satellite carriers during the time period covered by this proceeding. Specifically, WGNA accounted for approximately 73 percent of the total distant signal subscriber instances under both Sections 111 and 119.64 As a former senior DirecTV executive testified, the live MLB game telecasts available on WGNA made that signal a

60 See supra n. 27. See also 2010-13 Final Cable Determination at n. 30. 61 Id. See also Hartman 2010-13 Cable WDT at ¶22 (“MVPDs cannot insert advertising on a distant signal, nor can they alter the signal in other ways that they might with other channels (e.g., overlays of information, interactive elements with revenue opportunities).”); Shull 2010-13 Satellite WDT at ¶13. 62 The Judges cited the lack of advertising revenue opportunities to MVPDs from retransmitting distant signals as a basis for concluding that viewership is not an “adequate basis for apportioning relative value among disparate program categories.” 2010-13 Final Cable Determination at 3599-3600. 63 Written Direct Testimony of William E. Wecker and R. Garrison Harvey, In Re: Distribution of Satellite Royalty Funds (No. 14-CRB-0011-SD (2010-13)), March 22, 2019 (hereinafter “Wecker and Harvey 2010- 13 Satellite WDT”) at Table 6. 64 Trautman 2010-13 Satellite WDT at 12, Table 4.

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“‘must have’ for many MVPDs.” 65 Similarly, a former senior Comcast executive testified that “the sports programming on WGN [was] the principal reason to carry it as a distant signal. Customers expected to have access to the sports on WGN.”66 In each year during 2010-13, WGNA carried more than 100 broadcasts of live team sports.67

50. Programming on FOX-affiliated signals is compensable under both Sections 111 and 119. 68 Likewise, locally originated or syndicated programming broadcasts by a network affiliate of ABC, CBS, or NBC (i.e., non-network broadcasts on these signals) are compensable under both Sections 111 and 119. 69 However, network-originated programming on ABC, CBS, and NBC is compensable under Section 119 but not under Section 111. Pursuant to Section 119, a distant network signal can only be offered by a satellite carrier to households that are “unserved” by a local over-the-air station affiliated with the same network.70 Unserved households tend to be located in sparsely populated areas, and therefore, as an empirical matter, the different regulatory treatment of network and non-network distant signals had a smaller impact than might be supposed. Between 2010 and 2013, less than 10 percent of satellite carriers’ distant signal royalties were related to the carriage of network affiliates of ABC, CBS, or NBC,71 while approximately half the volume of programming on these signals was the type of network-originated programming that is compensable under Section 119 but not under Section 111.72 The network-originated programming on ABC, CBS, and NBC for which satellite carriers

65 Hartman 2010-13 Cable WDT at ¶22; see also Shull 2010-13 Satellite WDT at ¶27 (“As the senior executive responsible for programming decisions at Dish, I elected to carry WGNA because of its team sports programming.”); Hartman 2010-13 Satellite WDT at ¶¶ 16-17. 66 Singer 2010-13 Cable WDT at ¶18. 67 Hartman 2010-13 Satellite WDT at ¶16. 68 U.S. Government Accountability Office, Statutory Copyright Licenses: Stakeholders’ Views on a Phaseout of Licenses for Broadcast Programming¸ May 2016 (GAO-16-496) at 6; U.S. Copyright Office, Satellite Home Viewer Extension and Reauthorization Act Section 109 Report: A Report of the Register of Copyrights, June 2008 at 23, n. 26, 96. 69 Library of Congress, Copyright Office, Section 109 Report to Congress, Notice of Inquiry, 72 Fed. Reg. 19039 (April 16, 2007) at 19041-42. 70 U.S. Copyright Office, Satellite Home Viewer Extension and Reauthorization Act Section 109 Report: A Report of the Register of Copyrights, June 2008 at 150-1. 71 Trautman 2010-13 Satellite WDT at 26-27. 72 Wecker and Harvey 2010-13 Satellite WDT at App. C.

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paid Section 119 royalties during 2010-13 consisted entirely of JSC and Program Suppliers’ programming.73

51. While network-originated programming on ABC, CBS, and NBC was a small portion of total volume of distantly retransmitted programming and contributed to a small share of Section 119 royalties during 2010-13, JSC network-originated programming was highly valuable. JSC network programming included some of its most highly valuable content, such as playoff games for major professional team sports (e.g., the Super Bowl, NBA Finals, and NHL Stanley Cup Playoffs).74 A former DISH Senior Vice President for content acquisition has testified that professional and college team sports telecasts on the ABC, CBS and NBC networks were “some of the most valuable of all sports programming” that DISH retransmitted pursuant to Section 119 during the 2010-13 period.75 This programming included Sunday afternoon NFL telecasts (CBS), Sunday Night Football (NBC), NBA Finals (ABC), NCAA March Madness (CBS), three Super Bowl telecasts (CBS and NBC), Saturday college football games, and “dozens of critical sporting events during the regular seasons of professional baseball, basketball, and hockey.” 76 According to industry estimates, when NBC and CBS renewed their broadcast agreements with the NFL in 2011, the networks each agreed to pay the League more than $1 billion annually, reflecting an increase of 50 to 60 percent over their previous agreements.77

52. Two other differences in the licensed rights between the cable and satellite proceedings are readily addressable and therefore do not undercut the comparability of those rights. The first is that whereas CSOs pay statutory royalties to carry public television signals and Canadian television signals under Section 111, these signals are not

73 Trautman 2010-13 Satellite WDT at 27. 74 Trautman 2010-13 Satellite WDT at App. D, App. E. 75 Shull 2010-13 Satellite WDT at ¶34. 76 Id. See also Trautman 2010-13 Satellite WDT at 27-28, App. D, App. E. 77 Anthony Crupi, “NFL Hammers Out Nine-Year Rights Renewals With NBC, CBS, Fox,” Ad Week, December 14, 2011, available at https://www.adweek.com/tv-video/nfl-hammers-out-nine-year-rights- renewals-nbc-cbs-fox-137128/; David Barron, “Network deals extended until 2022 season; NFL's annual revenues from broadcast rights to hit $7 billion,” Houston Chronicle, December 15, 2011.

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compensable under the corresponding satellite provision of the Copyright Act. The valuation of distant signals that are compensable under Section 119 therefore can be directly compared to the valuation of compensable rights under Section 111 by removing the combined contribution of public and Canadian television signals. Table 2 below adjusts the royalty allocation in the Cable 2010-13 Final Determination by removing the allocations to the Public Television and Canadian claimants and redistributing those allocations to the other parties on a proportional basis.

Table 2: Section 111 Royalty Allocations by Program Category, 2010-13 Reallocated After Removing Public TV and Canadian Claimants Programming Category 2010 2011 2012 2013 Joint Sports Claimants 41.0% 39.5% 44.0% 48.1% Program Suppliers 33.0% 31.3% 27.9% 25.7% Commercial TV 20.9% 22.0% 21.0% 20.4% Devotional Programs 5.0% 7.2% 7.1% 5.7% Source: Calculations based on Table 1 of the 2010-13 Final Cable Determination.

53. Second, the formulas by which royalties for distant signals are calculated differ somewhat between cable and satellite. In particular, a CSO that chooses to carry only local stations is still required to submit a statement of account under the Copyright Act and pay a minimum retransmission fee.78 Satellite operators do not face a minimum fee, and pay a positive royalty on a per-subscriber basis only for distant signals they actually transmit.79 The Judges explicitly considered the issue of minimum royalties in the 2010- 13 Cable Proceeding. The Judges noted that “even when a CSO is obligated to pay the minimum royalty fee, it still has the incentive to select stations for distant retransmission that it believes will maximize the benefits (or, in economic terms, utility) to the CSO.”80 Thus, as the Judges recognized, it remains a sound economic approach to use MVPDs’ observed carriage decisions to determine the relative values that they assign to different

78 U.S. Copyright Office, Satellite Home Viewer Extension and Reauthorization Act Section 109 Report: A Report of the Register of Copyrights, June 2008 at 115; Library of Congress, Copyright Office, Section 109 Report to Congress, Notice of Inquiry, 72 Fed. Reg. 19039 (April 16, 2007) at 19041. 79 Library of Congress, Copyright Office, Section 109 Report to Congress, Notice of Inquiry, 72 Fed. Reg. 19039 (April 16, 2007) at 19042. Additionally, while satellite carriers paid a flat fee per subscriber, CSO’s royalties were calculated as a percentage of their gross receipts (and in the case of larger CSOs, the number and type of distant signals carried). 80 2010-13 Final Cable Determination at 3574.

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types of available programming alternatives. This conclusion is as true in the context of imputing marketplace values to programming choices made by satellite carriers as the Judges determined was the case for CSOs.

3. Similarity of the Economic Circumstances Affecting the Earlier Negotiators and the Current Litigants

54. The third articulated criterion for selecting a benchmark is to assess the similarity of the economic circumstances affecting the CSOs whose carriage decisions were assessed in the Cable Proceeding and the satellite carriers whose carriage decisions reflect their valuation of distant signal programming. As an initial matter, I note that the cable and satellite royalty allocation proceedings pertain to the identical period, 2010 through 2013, and therefore the assessment of similarity in economic circumstances does not require comparing disparate or only partially overlapping time periods.

55. CSOs and satellite carriers faced very similar economic circumstances during the 2010-13 timeframe by virtue of the fact that, as I have previously explained, they were head-to-head competitors in the marketplace for subscribers. Head-to-head competition drives firms to face very similar economic circumstances on both the demand side and the supply (or cost) side.

56. Consider first the economic similarities in CSOs’ and satellite carriers’ demand for programming. Both types of MVPDs value programming primarily for its ability to attract and retain subscribers, particularly in a market environment where cable systems and satellite carriers face increasingly fierce competition from OVPDs. 81 Testimony from a former senior DirecTV executive indicated that “attracting and maintaining . . . subscribers is necessarily the lifeblood of MVPDs.”82 Similarly, testimony from a former

81 Hartman 2010-13 Satellite WDT at ¶11. Former MVPD executives have described the market as “mature” with relatively few new cable and satellite subscribers, thereby making retention of existing customers important. See Hartman 2010-13 Satellite WDT at ¶20; Shull 2010-13 Satellite WDT at ¶15. 82 Hartman 2010-13 Satellite WDT at ¶7. See also Shull 2010-13 Satellite WDT at ¶15; Hartman 2010-13 Cable WDT at ¶16.

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senior Comcast executive reiterated that “[t]he ability of particular programming to support customer acquisition and retention is a crucial factor in carriage decisions.”83

57. CSOs and satellite carriers share similarly high demand for team sports programming as a means to compete for subscribers. Economists studying the television media industry have long recognized the phenomenon of “marquee” or “must-have” programming. In recent testimony before a FCC panel on the competitive challenges facing MVPDs, for example, an economist noted:

“A network is considered ‘must-have’ for an MVPD if the permanent removal of the network from the distributor’s lineup would cause a sufficiently large number of subscribers to switch to another distributor. … Because of consumer insistence, even program networks with relatively low ratings share can be ‘must-have’ from the perspective of an MVPD. As downstream rivalry among MVPDs has increased, consumer insistence on marquee programming allows content owners to command better terms for carriage.”84

58. Testimony from industry experts identified live sports as the “prime example” of marquee or must-have programming, and explained how the “must-have” nature of such programming drives its marketplace value. The former senior programming executive for DirecTV during 2010-13 explained:

“Team sports programming is exceptionally important to cable and satellite MPVDs for the purposes of attracting and retaining customers, and indeed more important than the other claimant categories in this proceeding. It is a key factor as to why many customers sign up for, and remain with, their particular cable or satellite provider. Team sports programming is regarded by many consumers as a unique, ‘one-of-a-kind’ experience that must be watched in real time. MVPDs must provide a robust offering of team sports programming if they are going to compete for pay television subscribers.”85

Similarly, the former senior programming executive for Charter during 2010-13 testified:

83 Singer 2010-13 Cable WDT at ¶13. 84 Tasneem Chipty, Position Statement Prepared for The Federal Communications Commission’s Panel on Challenges Faced by Multichannel Video Programming Distributors, Mar. 21, 2016, available at https://transition.fcc.gov/bureaus/mb/docs/policy/video_marketplace/position_statement_Chipty_2016.pdf at ¶7. 85 Hartman 2010-13 Satellite WDT at ¶8. See also id. at ¶¶13-16; Shull 2010-13 Satellite WDT at ¶¶9, 20- 25; Hartman 2010-13 Cable WDT at ¶¶16, 20.

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“When considering the carriage of a distant signal, the presence of live team sports programming is primarily what differentiates the signal. Each game is a unique, real-time event. Live team sports are popular with a passionate segment of good customers, the very type of customers the CSO is trying to retain. Customers who are fans of professional or college sports expect that these games will be available as part of the subscription, multichannel programming experience they are purchasing. A CSO risks losing customers to competitors if it does not carry services that are exhibiting live sports content, a risk that is not generally present with other non-network programming. Sports programming is the most expensive programming on a cable system precisely because in many instances without it a CSO will lose customers.”86

59. Next, consider the economics of CSOs’ and satellite carriers’ costs to acquire programming as an input. The economic circumstances facing CSOs and satellite carriers are made similar by the fact that both types of distributors faced rising programming costs—and, in particular, rising sports programming costs—during the period covered by this proceeding. 87 In its 2012 10-K statement, the largest CSO Comcast stated:

“We expect programming expenses for our video services to continue to be our Cable Communications segment’s largest single expense item and to increase in the foreseeable future. The multichannel video provider industry has continued to experience an increase in the cost of programming, especially sports programming.”88

The largest satellite carrier DirecTV made a very similar disclosure in its 10-K for the same time period:

“Upon renewal of expiring contracts, programming suppliers have historically increased the rates they charge us for programming. Often these increases are greater than the rate of inflation. We expect this practice to continue and the

86 Singer 2010-13 Cable WDT at ¶15 (emphasis added). 87 U.S. Government Accountability Office, Statutory Copyright Licenses: Stakeholders’ Views on a Phaseout of Licenses for Broadcast Programming¸ May 2016 (GAO-16-496) at 19 (“SNL Kagan data show that cable and satellite operators’ programming expenses are increasing at a greater rate than their revenues. For example, cable and satellite operators’ programming expenses as a percent of video service revenue increased from 34.6 percent in 2006 to 44.6 percent in 2013. Twenty-one out of the 42 stakeholders we interviewed identified rising programming costs as a trend in the video marketplace over the last 5 years.”). See also Hartman 2010-13 Cable WDT at ¶¶28, 30; JSC Ex. 6, Written Rebuttal Testimony of Allan Singer In Re: Distribution of Cable Royalty Funds (No. 14-CRB-0010-CD (2010-13)), September 15, 2017 at ¶6. 88 Comcast Corporation 10-K for the Fiscal Year Ended December 31, 2012 at 31.

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negotiations over such increases to become more difficult and disruptive. Programming expenses will continue to be our largest single expense item in the foreseeable future. Our industry has continued to experience an increase in the cost of programming, especially sports programming.”89

60. A third factor driving similarity between the economic circumstances of CSOs and satellite carriers during this period was that, in addition to competing head-to-head against each other, both types of “traditional” distributors also faced significant and growing competitive pressures from the phenomenon of consumers “cutting the cord” and shifting to online streaming to watch television programming. A recent article on changing television viewing patterns noted the “negative impact on Comcast, AT&T, and satellite services such as DirecTV” from cord-cutting by former cable and satellite subscribers that choose alternative distribution providers such as Netflix, Amazon Prime and Hulu.90

4. Degree to Which the Analogous Market Reflects an Adequate Degree of Competition

61. The final enumerated criterion for selecting a benchmark involves an assessment of the degree to which the analogous market reflects an adequate degree of competition.

62. In the 2010-13 Final Cable Determination, the Judges determined the relative marketplace value of different programming categories by constructing a “‘hypothetical market’ that generates the relative values that approximate those that would arise in an unregulated market.”91 By definition, therefore, a royalty allocation that was determined within an analytical framework in which parties were hypothesized to contract with each other in an unregulated marketplace reflects an adequate degree of competition.

D. Conclusion

63. In this section, I showed that the allocations from the Cable Proceeding pass the four-point economic test described by the Judges to make it an appropriate benchmark for

89 DirecTV 10-K for the Fiscal Year Ended December 31, 2012 at 21. 90 John E. Crawford, “Cutting the Cord—A Marketing Case: An Examination of Changing TV Viewership,” Atlantic Marketing Journal, 5(2) (2016): 137-150 at 140, 142. Hartman 2010-13 Satellite WDT at ¶11. 91 2010-13 Final Cable Determination at 3555 citing 2004–05 Distribution Order, 75 FR at 57065.

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satellite royalties. Furthermore, as I showed in Section II, the Judges’ decision in the Cable Proceeding was grounded in well-established economic principles. Based on this, I conclude that the Judges’ royalty allocation in the Final Cable Determination is an economically sound benchmark to apply to satellite retransmission of distant signals, with an appropriate adjustment to account for the absence of Canadian and Public Television programming in the current proceeding.

IV. APPLICATION OF THE BENCHMARK

64. The total value of a given category of programming carried on distant signals is the product of two factors: (1) the per-minute value of the programming in the category, and (2) the total minutes of the category’s programming delivered on the distant signals. 92 Therefore, using the Judges’ allocation in the cable proceeding as a benchmark, the total value of each category of distant signal programming carried by satellite providers can be calculated with the relative per-minute values reflected in the Final Cable Determination.

65. I understand that William E. Wecker and Gary Harvey have conducted an analysis to quantify the number of compensable distant signal broadcast minutes carried by satellite companies in each programming category in each year, and to apply the relative per-minute values from the Judges’ royalty allocation in the Cable Proceeding. Table 3 reports the share of compensable distant satellite subscriber-weighted broadcast minutes for each programming category that Dr. Wecker and Mr. Harvey calculated.

92 In the 2010-13 Cable Proceeding, the Judges recognized the need to consider these two factors when allocating royalties among the programming categories. See 2010-13 Final Cable Determination at 3561 (“The Judges recognize that the two elements multiplied in such a regression—the volume of total minutes per program category and the value-per-minute are both functions of volume. The former, volume of minutes per program category, is facially a volume metric. … The value-per-minute factor is a metric for relative value, estimating the CSOs’ relative demand for different categories of programming. To criticize the product as related to volume, therefore, misses the mark, because it is relative value that the Judges must determine in this proceeding.”).

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Table 3: Share of Compensable Distant Satellite Subscriber-Weighted Broadcast Minutes Calculated by Dr. William E. Wecker and Mr. Gary Harvey Programming Category 2010 2011 2012 2013 Joint Sports Claimants 7.3% 8.2% 11.3% 13.0% Program Suppliers 67.7% 65.9% 57.5% 56.8% Commercial TV 23.3% 24.2% 29.7% 28.7% Devotional Programs 1.7% 1.7% 1.5% 1.5% Source: Wecker and Harvey 2010-13 Satellite WDT, Table 5.

66. To estimate free market valuations for each of the four claimant programming categories, Dr. Wecker and Mr. Harvey then multiplied the annual cable royalty allocations determined by the Judges in the 2010-13 Cable Proceeding93 by the ratio of the share of compensable distant satellite subscriber-weighted broadcast minutes to the corresponding share of compensable distant cable subscriber-weighted broadcast minutes in each of the four relevant program claimant categories. The satellite royalty allocations that Dr. Wecker and Mr. Harvey calculated based on this procedure are reported in Table 4.

Table 4: Proposed Satellite Royalty Allocation Prepared by Dr. William Wecker and Mr. Gary Harvey Programming Category 2010 2011 2012 2013 Joint Sports Claimants 36.9% 38.4% 46.0% 49.9% Program Suppliers 39.1% 37.6% 28.8% 27.2% Commercial TV 22.2% 20.8% 21.7% 20.0% Devotional Programs 1.8% 3.2% 3.4% 2.9% Source: Wecker and Harvey 2010-13 Satellite WDT, Table 1.

67. I have reviewed Dr. Wecker’s and Mr. Harvey’s calculations, and I regard their calculations to be the outcome of a sound methodology. Based on my review, I regard their results to be a reliable estimate of the free market valuation of programming for the four claimant categories at issue. In particular, I agree with Dr. Wecker’s and Mr. Harvey’s removal of the Public Television and Canadian shares from the allocation as those signals are not compensable under Section 119. I likewise agree with Dr. Wecker’s and Mr. Harvey’s methodology for calculating subscriber-weighted volume. Factoring

93 2010-13 Final Cable Determination, Table 1. Dr. Wecker and Mr. Harvey re-based the royalty allocations in Table 1 of the Final Cable Determination to reflect the fact that Canadian and Public Television Programming are not claimants in the satellite royalty proceeding.

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the number of subscribers into the measure of volume is very important. Otherwise, a minute of programming on a station such as WGNA with more than 40 million subscribers would be treated the same as a minute of programming on a station with only 400 subscribers.

68. I also note that while the Judges’ 2010-13 cable allocations relied primarily on the regression analysis conducted by Dr. Crawford, the Judges departed from Dr. Crawford’s regression results in allocating shares to the Devotional and Canadian claimants.94 If one concludes that Dr. Crawford’s regression analysis is a sound method of estimating fair market values, then from an economic perspective it would make sense to apply Dr. Crawford’s results consistently to all the categories of programming in that proceeding.95 Applying Dr. Crawford’s regression coefficients in place of the 2010-13 allocations as the basis for allocating the satellite shares would result in increases to the JSC’s allocation.

V. CONCLUSION

69. I was asked by counsel for the Joint Sports Claimants to provide expert testimony on economic issues relevant to allocating royalties from the satellite retransmission of distant signals between 2010 and 2013. Specifically, I was asked to apply my training and experience as a competition economist to evaluate whether the Judges’ royalty allocation in the 2010-13 Cable Proceeding can serve as a sound benchmark in the current satellite royalty proceeding.

70. Benchmarking is a standard empirical method widely used by economists. The factors that an economist considers when evaluating the reliability of a potential benchmark are the same as those enunciated by the Judges in the 2010-13 Final Cable Determination. The concepts of “comparability” between negotiating parties and the rights in question, “similarity of economic circumstances,” and the “adequacy of

94 2010-13 Final Cable Determination at 3610-11. 95 Dr. Crawford’s regression analysis implements what economists refer to as a “hedonic model.” Hedonic models are widely used by economists to decompose the value of a product into its components. Ben J. Sopranzetti, “Hedonic regression models,” in Handbook of Financial Econometrics and Statistics (Cheng- Few Lee and John C. Lee, eds.), Springer Reference, 2015, 2119-2134.

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competition” are highly familiar to economists. Section III of my report applied these criteria to facts relating to distant broadcast signal retransmission. Based on my analysis, I conclude that the Judges’ royalty allocation from the Cable Proceeding constitutes the most appropriate benchmark for use in the current proceeding.

71. I also reviewed the calculations performed by Dr. Wecker and Mr. Harvey applying the benchmark, and I regard their method as appropriate and their result to be a reliable estimate of the market valuation of programming for each claimant category.

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Appendix 1

PhD, Economics Andrew R. Dick University of Chicago Vice President MA, Economics University of Chicago

BA, Economics and Political Science University of Toronto

Andrew Dick, a vice president in the Competition Practice at Charles River Associates, has deep practical experience that spans both mergers and acquisitions as well as antitrust litigation. Dr. Dick routinely assists clients by assessing antitrust risks at the pre-transaction stage, preparing complex economic analyses in support of proposed transactions reviewed by US and foreign antitrust agencies, providing economic consulting assistance during litigation, and serving as a testifying expert in litigated cases. Dr. Dick has applied his antitrust expertise to client assignments in a broad array of industries including television programming production and distribution, differentiated consumer products, retailing and distribution, local radio and broadcast television station operation, professional and college team sports, manufacturing, paper and wood products, chemicals and pharmaceuticals, steel, computer software and hardware, network industries, and transportation services among many others. Dr. Dick has led CRA project teams on many high- profile transactions including Office Depot-OfficeMax, Albertson’s-Safeway, Live Nation-Ticketmaster, General Electric-Alstom, NBC Universal-Comcast and NBC-Universal, Caesars-Harrah’s, and Whole Foods Market-Wild Oats. In litigated matters, Dr. Dick has submitted expert analyses pertaining to allegations of monopolization, collusion, and foreclosure as well as other economic issues.

Before joining CRA in 2003, Dr. Dick was Acting Chief of the Competition Policy Section of the DOJ’s Antitrust Division where he helped direct a staff of more than 50 PhD economists. In that position, Dr. Dick oversaw economic analyses in a broad range of sectors including television programming production and distribution, computer software and hardware, paper and wood products, and electricity generation and distribution. Prior to that, he was a member of the UCLA faculty and was a research fellow at the University of Chicago’s Graduate School of Business. Dr. Dick has spoken at conferences and published widely on antitrust topics such as unilateral and coordinated effects, merger efficiencies and business justifications for vertical and horizontal restraints. His articles have appeared in such leading publications as Antitrust Law Journal, Journal of Law and Economics, and Antitrust Magazine.

Selected antitrust engagements

• Business services—publishing, business continuity/disaster recovery services, commercial printing, document destruction, food processing, freight forwarding, meatpacking, professional services, waste disposal

• Computer software and hardware—CAD/CAM, desktop software, enterprise software, scanners, speech recognition software

• Consumer products and services—alcoholic beverages, batteries, coffee, confectionery, consumer lending, cosmetics, e-books, educational and testing services, film, lawn and garden products, luncheon meats, office supplies, rental cars, veterinary services

• Defense—aerospace equipment, defense support services, satellite imaging

Andrew R. Dick Charles River Associates Page 2

• Distribution—building supply products, food service, grocery wholesaling, office supplies, paper products, pharmaceuticals, retail support supplies

• Energy—electricity generation and distribution, drilling services, natural gas supply, oilfield equipment and services

• Entertainment and media—television program production (including local station, network and syndicated programming) and multi-channel video program distribution, casino gaming, collegiate sports multimedia rights promotion services, concert promotion services, digital media, local radio and broadcast television stations, movie theaters, outdoor media, professional and amateur sports leagues and associations, television and radio advertising

• Equipment and machinery—aircraft parts, drilling equipment, electrical equipment, farm equipment, mining equipment, railcars, semiconductor manufacturing equipment, vehicle engines, water purifiers

• Financial products and services—ATM networks, consumer installment lending, credit and debit card networks, indirect automotive financing medical insurance claims networks

• Forestry products—corrugated packaging materials, engineered wood products, label stock, linerboard and containerboard, paperboard, publication and printing paper, specialty paper products, structural panels (OSB, plywood), tissue products, wood pulp

• Healthcare—health insurance, healthcare claims networks, medical devices, PBMs, pharmaceuticals manufacturing, pharmaceuticals wholesaling, physician services

• Industrial products—agricultural chemicals, aluminum, building distribution services, cement and ready-mix, containerboard, fertilizer, glass reinforcements, gypsum wallboard, hot and cold rolled steel, industrial chemicals, insulation, pool supplies, road salt, specialty steels

• Manufacturing—automotive equipment, consumer appliances, builder’s hardware, engines, explosives detection equipment, mining equipment, packaging materials, photographic inks, turbines and generators

• Retail—apparel retailers, convenience stores, department stores, discount stores, drug stores, gasoline stations, mass merchants, office supply superstores, online retailing, supermarkets

• Telecommunications—cellular telephone location systems, telecommunications equipment • Transportation—airlines, automotive equipment, freight-forwarding, port management, rail transportation, transportation equipment manufacturing

Expert testimony since 2010

Westlake Services LLC d/b/a Westlake Financial Services v. Credit Acceptance Corporation. US District Court for the Central District of California. (Client: Credit Acceptance Corporation) Expert reports, May 5, 2017 and June 30, 2017. Deposition testimony July 17, 2017.

Cal. Ex. Rel. Lockyer v. British Columbia Power Exchange Corp. FERC Docket EL02-71-057. (Client: Shell Energy North America) Expert Declaration, February 1, 2017. Deposition testimony March 24, 2017. Hearing testimony April 26, 2017.

Andrew R. Dick Charles River Associates Page 3

The Elite Rodeo Association d/b/a Elite Rodeo Athletes, Trevor Brazile, Bobby Mote, and Ryan Motes individually and on behalf of a class of similarly situated individuals v. Professional Rodeo Cowboys Association Inc. US District Court for the Northern District of Texas, Dallas Division. (Client: Professional Rodeo Cowboys Association) Expert Declaration, December 4, 2015. Trial testimony December 29, 2015. Expert Declaration on Behalf of Zuffa, LLC Submitted to the Federal Trade Commission. (Client: Ultimate Fighting Championship (UFC)) Expert declaration, December 1, 2011. Miguel V. Pro and Davis Landscape, Ltd., individually and on behalf of all others similarly situated v. Hertz Equipment Rental Corporation. US District Court for the District of New Jersey. (Client: Hertz Equipment Rental Corp.) Expert report, May 19, 2011. Deposition testimony July 27, 2011.

Amylin Pharmaceuticals, Inc. v. Eli Lilly and Company. US District Court for the Southern District of California. (Client: Amylin Pharmaceuticals) Expert declaration, May 13, 2011. In Re: Delta/AirTran Baggage Fee Antitrust Litigation. US District Court for the Northern District of Georgia, Atlanta Division. (Client: AirTran Airways) Expert reports, January 7, 2011 and February 4, 2011. Deposition testimony, February 25, 2011.

Affinion Benefits Group, LLC v. Econ-O-Check Corp. US District Court for the Middle District of Tennessee, Nashville Division. (Client: Affinion Benefits Group) Expert declaration, October 22, 2010. Expert report, October 2, 2010.

Government experience

2002–2003 Acting Chief of Competition Policy, Antitrust Division, US Department of Justice

1999–2002 Assistant Chief of Competition Policy, Antitrust Division, US Department of Justice

Dr. Dick shared responsibility for supervising the casework of more than 50 PhD economists, managing the preparation of testifying experts for litigation, coordinating analysis between economic and legal staffs, and briefing the Assistant Attorney General on enforcement recommendations. Recipient of the Assistant Attorney General’s Award of Distinction (2002). 1996–1999 Staff Economist, Antitrust Division, US Department of Justice

Dr. Dick was the lead economist on numerous merger reviews and investigations into horizontal agreements, vertical restraints, and alleged unfair trade practices.

Teaching and research experience

1989–1996 Assistant Professor, University of California, Los Angeles, Department of Economics

Dr. Dick taught graduate- and undergraduate-level courses on microeconomics, competition and antitrust and regulation at UCLA and twice received the Warren C. Scoville Distinguished Teaching Award.

Andrew R. Dick Charles River Associates Page 4

1991 Visiting Assistant Professor, University of Chicago, Graduate School of Business

John M. Olin Faculty Research Fellow in residence at the Center for the Study of the Economy and the State. 1995–1996 Assistant Professor of Economics, Claremont McKenna College

Dr. Dick taught courses in industrial organization and microeconomic analysis.

Professional service

2005–2015 Associate Editor, Antitrust Magazine

1995–2000 Associate Editor, International Journal of Industrial Organization

Antitrust publications

“Coordinated Effects in Merger Analysis.” Antitrust Economics for Lawyers. LexisNexis, 2017.

“Findings from the Second Request Compliance Burden Survey.” With Peter Boberg. The Threshold, Summer 2014; pp. 26-37.

“The Office Depot-OfficeMax Merger and the Changing Retail Landscape.” With Kevin Arquit, Matthew Reilly, Andrew Lacy and Peter Boberg. Global Competition Review USA, November 25, 2013. “Merger Policy Twenty-Five Years Later: Unilateral Effects Move to the Forefront.” Antitrust Magazine, fall 2012; pp. 25–32.

“Counseling on Complex Issues.” Panelist in Antitrust Magazine symposium, spring 2008; pp. 6–24.

“Cartels.” The Concise Encyclopedia of Economics, ed. David R. Henderson. Liberty Fund Publishing, 2008; pp. 61–63.

“Regression Analysis.” With Peter Boberg. Antitrust Magazine, Fall 2005; pp. 85–89.

“The Effect of Format Changes and Ownership Consolidation on Radio Station Outcomes.” With Charles J. Romeo, Review of Industrial Organization, Vol. 27, No. 4, December 2005; pp. 351–86.

“Presumptions, Assumptions and the Evolution of US Antitrust Policy.” With Gregory S. Vistnes. Trade Practices Law Journal, Vol. 13, No. 4. December 2005; pp. 238–243.

“Coordinated Effects Analysis: The Arch Coal Decision.” Antitrust Source, March 2005; pp. 1–15. “If Cartels Were Legal, When Would Firms Fix Prices?” How Cartels Endure and How They Fail: Studies of Industrial Collusion, ed. Peter Grossman. Edward Elgar, 2004; pp. 144–173.

“Coordinated Interaction: Pre-Merger Constraints and Post-Merger Effects.” George Mason University Law Review, Vol. 12, No. 1, Fall 2003; pp. 65–88.

“The Merger Guidelines and the Integration of Efficiencies into Antitrust Review of Horizontal Mergers.” With William J. Kolasky. Antitrust Law Journal, Vol. 71, No. 1, 2003; pp. 207–251.

Andrew R. Dick Charles River Associates Page 5

“Cartels and Tacit Collusion.” The New Palgrave Dictionary of Economics and the Law, ed. Peter Newman; Macmillan Press, London, 1998; pp. 206–211. “When Are Cartels Stable Contracts?” Journal of Law and Economics, Vol. 39, No. 1, April 1996; pp. 241–84.

“Identifying Contracts, Combinations and Conspiracies in Restraint of Trade.” Managerial and Decision Economics, Vol. 17, No. 2; March–April 1996; pp. 203–216. Reprinted in Economic Inputs, Legal Outputs: The Role of Economists in Modern Antitrust, ed. Fred McChesney (Wiley & Sons, 1998); pp. 11–24. “Japanese Antitrust: Reconciling Theory and Evidence.” Contemporary Policy Issues, Vol. 11, No. 2, April 1993; pp. 50–61.

“Are Export Cartels Efficiency-Enhancing or Monopoly-Promoting?” Research in Law and Economics, Vol. 15, Summer 1992; pp. 89–127.

Selected other publications

“US–Japan Telecommunications Trade Disputes: The Role of Regulation.” The Effects of US Trade Protection and Promotion Policies, ed. Robert C. Feenstra, University of Chicago Press, 1997; pp. 117–157.

“Explaining Managed Trade as Rational Cheating.” Review of International Economics, Vol. 4, No. 1, February 1996; pp. 1–16.

Industrial Policy and Semiconductors: Missing the Target. American Enterprise Institute, 1996.

“Does Import Protection Act as Export Promotion? Evidence from the United States.” Oxford Economic Papers, Vol. 46, No. 1, January 1994; pp. 83–101.

“Accounting for Semiconductor Industry Dynamics.” International Journal of Industrial Organization, Vol. 12, No.1, January 1994; pp. 35–51.

“Strategic Trade Policy and Welfare: The Empirical Consequences of Foreign Ownership.” Journal of International Economics, Vol. 35, No. 3-4; November 1993; pp. 227–249.

“An Efficiency Explanation for Why Firms Second Source.” Economic Inquiry, Vol. 30, No. 2, April 1992; pp. 332–354. Co-winner of the Economic Inquiry best article of the year award. “The Competitive Consequences of Japan’s Export Cartel Associations.” Journal of the Japanese and International Economies, Vol. 6, No. 3; September 1992; pp. 275–298. “Learning-by-Doing and Dumping in the Semiconductor Industry.” Journal of Law and Economics, Vol. 34, No. 1; April 1991; pp. 133–160.

Before the COPYRIGHT ROYALTY JUDGES Washington, DC

) In re ) ) DISTRIBUTION OF ) NO. 14-CRB-0011-SD (2010-13) SATELLITE ROYALTY FUNDS ) )

WRITTEN DIRECT TESTIMONY OF WILLIAM E. WECKER, PH.D. AND R. GARRISON HARVEY

March 22, 2019

Table of Contents

Table of Contents ______i I. Qualifications ______2 (a) Dr. William E. Wecker ______2 (b) Mr. R. Garrison Harvey ______2 II. Introduction and Summary ______3 III. Application Of 2010-13 Cable Per Minute Valuations to 2010-13 Satellite ______4

I. QUALIFICATIONS

(a) Dr. William E. Wecker

1. I am a statistician and applied mathematician. I received the Bachelor of Science degree (Basic Sciences) from the United States Air Force Academy. I received both the Master of

Science degree (Operations Research) and Doctor of Philosophy degree (Statistics and

Management Science) from the University of Michigan. I have served on the faculties of the

University of Chicago, the University of California, Davis, and Stanford University where I taught statistics and applied mathematics at the graduate level. I have performed research in statistical theory, statistical methods, and applied mathematics for over four decades.

2. I am currently President of William E. Wecker Associates, Inc., an applied mathematics consulting firm located in Jackson, Wyoming. I am a member of the American

Statistical Association, the Institute of Mathematical Statistics, and the Society for Risk Analysis.

I have served as associate editor of the Journal of the American Statistical Association for four years and of the Journal of Business and Economic Statistics for eighteen years. A copy of my curriculum vitae is attached as Appendix A.

(b) Mr. R. Garrison Harvey

3. I am a statistician and applied mathematician. I received the Bachelor of Science degree (Applied Mathematics) from the United States Air Force Academy and the Master of

Science degree (Operations Research) from the Air Force Institute of Technology. I am currently

Vice President and Principal Consultant at William E. Wecker Associates, Inc. I have served as an expert witness in litigation, arbitration and regulatory proceedings in matters evaluating damages, breach of contract, copyright infringement, consumer product performance, epidemiology, sample design, credit card market analysis and profitability, statistical analysis of

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 2

credit card industry data, and class certification. Additionally, I have worked as a consultant on many litigation and business consulting engagements including: antitrust matters involving price- fixing, false advertising, unfair competition and monopolization, consumer product safety and performance, environmental damage, class actions alleging disparate impact in insurance, insurance claims, lending and wages, patent and intellectual property matters involving pharmaceutical drugs, petrochemical formulation, and automobile devices. These qualifications and a list of my professional publications are in my curriculum vitae which is appended to this report as Appendix B.

II. INTRODUCTION AND SUMMARY

4. We understand that Section 119 of the Copyright Act grants satellite carriers a

“statutory license” to retransmit the copyrighted programming on broadcast television stations, and that the purpose of this proceeding is to determine the proper allocation of the royalties collected under this license among the following claimant groups (“Agreed Categories”) for the years 2010-13: Joint Sports Claimants (“JSC”), Program Suppliers (“PS”), Commercial

Television Claimants (“CTV”) and Devotional Claimants (“Devotionals”).1 We also understand that in the past the parties have settled their disputes regarding the allocation of satellite royalties, and thus the Copyright Royalty Judges (“Judges”) have not previously performed an allocation of satellite royalties.

5. Earlier this year, the Judges issued their “Final Determination” in the 2010-13 proceeding allocating royalties paid by cable systems under the Section 111 statutory license.2 The

1 See Notice of Participant Groups, Commencement of Voluntary Negotiation Period (Allocation), and Scheduling Order, No. 14-CRB-0011-SD (2010-13), at Ex. A (Nov. 25, 2015). We understand that the group claiming for CTV royalties in this proceeding is referred to as the Broadcaster Claimants Group. 2 Distribution of Cable Royalty Funds, 84 Fed. Reg. 3552 (Feb. 12, 2019) (“2010-13 Cable Determination”).

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 3

2010-13 Cable Determination allocated royalties among the Agreed Categories as well as Public

Television Claimants and the Canadian Claimants Group, two entities that claim Section 111 royalties but do not claim any share of the Section 119 royalties collected during the 2010-13 period.

6. We have been asked to calculate the allocation of 2010-13 satellite royalties among the Agreed Categories if the 2010-13 Cable Determination is applied as a benchmark. To do so, we calculated the relative per minute value of the programming in each of the Agreed Categories

(plus Public Television and Canadians) as determined in the 2010-13 Cable Determination. We then applied that value to the relative volume of each Agreed Category’s programming retransmitted by satellite carriers pursuant to Section 119 during 2010-13. The results of this calculation are as follows:

Table 1: 2010-13 Satellite Royalty Allocations Based Upon the Judges’ 2010-13 Cable Royalty Allocations

Agreed Category 2010 2011 2012 2013 2010-13 CTV 22.18% 20.80% 21.70% 20.03% 21.20% Devotionals 1.81% 3.25% 3.45% 2.89% 2.84%

Program Suppliers 39.08% 37.60% 28.81% 27.24% 33.40% JSC 36.93% 38.35% 46.04% 49.85% 42.57% Total 100% 100% 100% 100% 100%

III. APPLICATION OF 2010-13 CABLE PER MINUTE VALUATIONS TO 2010-13 SATELLITE

7. We calculated the allocation of 2010-13 satellite royalties by applying (1) the per minute valuations for each Agreed Category as reflected in the 2010-13 Cable Determination to

(2) the relative volumes of each Agreed Category carried by satellite carriers during 2010-13. To

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 4

do so, we first analyzed the ratio between the Judges’ awards in the 2010-13 cable proceeding and the relative volumes of compensable programming in each claimant category that the Judges valued. Once we derived this relationship between volume and value, we applied it to the relative volumes of programming of each Agreed Category carried pursuant to the Section 119 license to generate allocations for each Agreed Category.

8. The Judges’ allocation shares in the 2010-13 Cable Determination are shown in

Table 2.

Table 2: Royalty Judges’ Allocations 2010-2013 (Basic Fund)3

Agreed Category 2010 2011 2012 2013 Canadian Claimants 5.0% 5.0% 5.0% 5.5% Commercial Television 16.8% 16.8% 16.2% 15.3% Devotionals 4.0% 5.5% 5.5% 4.3% Program Suppliers 26.5% 23.9% 21.5% 19.3% Public Television 14.8% 18.6% 17.9% 19.5% JSC 32.9% 30.2% 33.9% 36.1%

9. In the 2010-13 Cable Determination, the Judges relied primarily on the “point estimates” provided by Dr. Gregory Crawford’s regression analysis as the “starting point” for their awards for most of the Agreed Categories.4 In order to perform his regression analysis,

Dr. Crawford acquired complete programming data for all programming retransmitted pursuant to

Section 111 during the 2010-13 period and categorized it by Agreed Category. Dr. Crawford reported the relative volume of compensable Section 111 programming in Figure 12 of his report.5

Table 3 reproduces Crawford’s Figure 12 as it appeared in his report. As Dr. Crawford explains,

3 2010-13 Cable Determination at 3552. For purposes of this testimony, it is immaterial whether we rely upon the Judges’ awards for the Basic or 3.75% funds because the 3.75% fund allocations simply adjust the Basic fund awards proportionally to account for the fact that Public Television is not entitled to claim 3.75% funds. Id. at 3611. See also Appendix E. 4 2010-13 Cable Determination at 3610. 5 JSC Ex. 1, at 25, Fig. 12 (Crawford Corrected Written Direct Testimony).

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 5

these volume shares are “subscriber-weighted,” i.e., they account for the extent of carriage by cable systems. Weighting volume estimates by subscribers is important in order to capture the breadth of retransmission of a given signal. Unweighted volume estimates would improperly treat a minute of programming on a station that is retransmitted to 400 subscribers the same as a minute of programming on WGNA, which during 2010-13 had more than 40 million subscribers.

Table 3: Share of Volume of Total Minutes per Program Category (Crawford Fig. 12)

Program Sports Commercial1V Year Suppliers rcial Public TV Devotional Canadian Total

2010 38.3% 5.4% 14.7% 32.3% 3.2% 6.0% 100.0% 2011 33.7% 5.2% 15.7% 36.9% 2.3% 6.2% 100.0% 2012 31.9% 6.2% 16.5% 36.6% 1.8% 7.0% 100.0% 2013 28.7% 6.7% 15.6% 39.7% 1.6% 7.6% 100.0% 2010-13 33.3% 5.9% 15.6% 36.3% 2.3% 6.6% 100.0%

10. To convert the 2010-13 Cable Determination into a benchmark that we applied to the 2010-13 Section 119 programming, we determined the ratios between the Judges’ awards and the relative volumes of programming as stated by Dr. Crawford. Table 4 shows the ratio of the

Judges’ Allocations (Table 2) to the volume by program category (Table 3).

Table 4: Ratio of Judges’ 2010-13 Cable Allocations to Volume

11. To apply these benchmark ratios to the satellite proceedings, we next determined the relative volume (subscriber-weighted) of programming among the Agreed Categories on the signals retransmitted pursuant to the Section 119 statutory license during the 2010-13 period. We

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 6

applied weights to account for the higher royalty rate charged to satellite carriers for commercial subscribers relative to residential subscribers.6 As noted above, Public Television Claimants and

Canadian Claimants Group do not claim Section 119 royalties, so we do not develop satellite volume measures for these categories.

12. We measured shares of programming volume by computing total minutes broadcast weighted by (i.e., multiplied by) the number of satellite subscribers receiving the broadcast. This required obtaining several types of data.

13. First, we determined what signals were retransmitted by satellite carriers. This information was obtained from Cable Data Corporation (“CDC”). The CDC data compiles the statements of account filed by satellite carriers during the 2010-13 period and reports each call sign carried pursuant to Section 119 during that period; the number of residential and commercial subscribers by month and call sign; and fees generated by residential and commercial subscribers by call sign.7

14. Second, we obtained detailed data identifying the programming broadcast on each signal carried by satellite carriers during this period, and the category of programming to which that content belongs.8 To do this, we used as a starting point the categorized programming data

6 Total satellite subscribers in each month is estimated weighting residential and commercial subscribers. More precisely, the total subscribers T in a given month is computed by the formula T = R + f C, where R=residential subscribers in the month, C=commercial subscribers in the month, and f = 50/25 in 2010, 51/25 in 2011, 53/26 in 2012, and 54/27 in 2013. See 37 C.F.R. § 386.2. 7 We understand that CDC revised its satellite carriage data the day prior to the filing of this testimony. We intend to review CDC’s revisions to its data and will update this report if we believe it is necessary to do so. 8 We were not able to obtain programming data for 5 signals carried pursuant to Section 119 during the 2010-13 period. These signals collectively represent just 0.01% of total satellite subscriber instances and 0.01% of total satellite fees gen. See our electronic files “10_by_year.do” and “06_make_merged_data.do”.

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 7

from Gracenote, Inc. (“Gracenote”) that Dr. Mark Israel relied upon for purposes of his regression analysis in the 2010-13 cable proceeding.9 Gracenote itself provides title information, as well as information on air date and start time. James Trautman of Bortz Media & Sports Group, Inc. categorized the data among the Agreed Categories (including, for purposes of the cable proceeding, the Public Television and Canadian categories).

15. We supplemented this data in three ways to ensure it was sufficient for analyzing the volume of Section 119 programming retransmitted during the 2010-13 period.

16. First, we obtained programming data from Gracenote for the 2013 calendar year

(which was not included in the original Israel data). We requested a 56-day sample using the same sampling technique that Dr. Israel employed in his regression analysis.10 Mr. Trautman categorized this data by Agreed Category.

17. Second, because the 2010-12 data from the Israel study did not include a small number of signals carried by satellite carriers but not cable operators during 2010-12, we obtained from Gracenote additional programming data for such signals for 2010-12. We used the same sampling technique and again requested that Mr. Trautman categorize the data by Agreed

Category.

18. Finally, for the entire 2010-13 period we categorized the network-originated programming on ABC, CBS and NBC signals.11 We understand that this programming is not

9 These data represent a 56-day sample of programming from all signals carried pursuant to the Section 111 license during the 2010-12 period. See JSC Ex. 4, ¶30 (Israel Written Direct Testimony). The main broadcast data set created by Dr. Israel’s computer code is “Full WGNA, TMS, and Missing Call TMS Data.dta”. 10 See Israel’s computer program “Date Sampling.do”. 11 Appendix C sets forth the relative volumes of network-originated and local affiliate programming on ABC, CBS and NBC stations during this period.

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 8

compensable under the Section 111 license but is compensable under the Section 119 license. Mr.

Trautman categorized this programming, all of which is either JSC or PS programming.

19. With all of the above data, we calculated the volume shares (subscriber-weighted minutes) by Agreed Category. The results are set forth in Table 5 below.12

Table 5: Total Satellite Broadcast Volume and Shares by Program Category Year Claimant Category Volume13 Share % 2010 Commercial Television 253,792,721,508 23.27% 2010 Devotionals 18,961,792,847 1.74% 2010 Program Suppliers 738,622,762,948 67.72% 2010 JSC 79,275,768,038 7.27% 1,090,653,045,341 100% 2011 Commercial Television 243,344,110,422 24.18% 2011 Devotionals 16,989,670,625 1.69% 2011 Program Suppliers 663,549,400,831 65.92% 2011 JSC 82,649,965,019 8.21% 1,006,533,146,897 100% 2012 Commercial Television 213,694,855,006 29.71% 2012 Devotionals 10,900,959,912 1.52% 2012 Program Suppliers 413,291,756,136 57.46% 2012 JSC 81,412,558,681 11.32% 719,300,129,735 100% 2013 Commercial Television 203,953,149,559 28.66% 2013 Devotionals 10,726,024,124 1.51% 2013 Program Suppliers 404,555,277,344 56.85% 2013 JSC 92,411,431,068 12.99% 711,645,882,095 100% 2010-13 Commercial Television 914,784,836,495 25.93% 2010-13 Devotionals 57,578,447,508 1.63% 2010-13 Program Suppliers 2,220,019,197,259 62.92% 2010-13 JSC 335,749,722,806 9.52% 3,528,132,204,068 100%

12 See our electronic file “07_shares.do”. In Appendix D, we compare Dr. Israel’s measure of relative cable volumes during the 2010-12 period to those provided by Dr. Crawford for the same period as test of the reliability of this volume data. 13 Broadcast minutes weighted by satellite subscribers.

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 9

20. We can compare the relative volume of programming for each Agreed Category retransmitted pursuant to Section 119 versus Section 111. To do this, we take the volumes presented in Crawford’s Figure 12 and exclude the volumes attributable to Public Television and

Canadian signals. We then compare that to the satellite volumes measures in Table 6.

Table 6: Satellite Volume Shares vs Cable Volume Shares (excluding Canadian Claimants and Public Television) Category Satellite Cable14 Commercial Television 23.27% 23.86% Devotionals 1.74% 5.19% 2010 Program Suppliers 67.72% 62.18% JSC 7.27% 8.77% Commercial Television 24.18% 27.59% Devotionals 1.69% 4.04% 2011 Program Suppliers 65.92% 59.23% JSC 8.21% 9.14% Commercial Television 29.71% 29.26% Devotionals 1.52% 3.19% 2012 Program Suppliers 57.46% 56.56% JSC 11.32% 10.99% Commercial Television 28.66% 29.66% Devotionals 1.51% 3.04% 2013 Program Suppliers 56.85% 54.56% JSC 12.99% 12.74% Commercial Television 25.93% 27.32% Devotionals 1.63% 4.03% 2010-13 Program Suppliers 62.92% 58.32% JSC 9.52% 10.33%

21. Having developed the ratio between volume and allocation in cable, and understanding the relative volume of each claimant category on satellite, applying the benchmark is simply a matter of applying the valuation ratios reflected in the 2010-13 Cable Determination to

14 See JSC Ex. 1, at p. 25, Fig. 12 (Crawford Corrected Written Direct Testimony). We adjust Crawford’s Figure 12 to back out PTV and Canadian categories. See our electronic file “08_crawford_fig12 _backout.xlsx”.

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 10

the satellite volumes and adjusting so that the combined estimates for all Agreed Categories sum to 100 percent. Table 7 below reports these results.

Table 7: 2010-13 Satellite Royalty Allocations Based Upon the Judges’ 2010-13 Cable Royalty Allocations

Agreed Category 2010 2011 2012 2013 2010-13 Commercial Television 22.18% 20.80% 21.70% 20.03% 21.20% Devotionals 1.81% 3.25% 3.45% 2.89% 2.84% Program Suppliers 39.08% 37.60% 28.81% 27.24% 33.40% JSC 36.93% 38.35% 46.04% 49.85% 42.57% Total 100% 100% 100% 100% 100%

22. Further details regarding these calculations are set forth in Appendix E. Table 7 reflects the appropriate allocation of 2010-13 satellite royalties among the Agreed Categories if the 2010-13 Cable Determination is applied as a benchmark.

Written Direct Testimony of William E. Wecker, Ph.D. and R. Garrison Harvey | 11 I declare under penalty of perjury that the foregoing is true and correct.

ivy 4'1 i-6kg.ir REW-11,DA) LW, William E. Wecker. Ph.D. Date I declare un er penalty of p jury that the foregoing is true and correct.

fi Are&,_ 2 9-6( l R. Garrison Harvey Date

Appendix A

January 2019

WILLIAM E. WECKER

270 E Simpson Ave PO Box 1010 Jackson WY 83001-1010

Telephone: (307) 732-6850 E-Mail: [email protected]

EDUCATION

B.S. Basic Science, U.S. Air Force Academy (1963) M.S. Operations Research, University of Michigan (1970) Ph.D. Statistics and Management Science, University of Michigan (1972)

EMPLOYMENT

1963-1967 Fighter pilot, U.S. Air Force 1968-1969 Chief of Protocol, U.S. Air Force, Berlin, Germany 1970-1972 Graduate Student, University of Michigan 1973-1976 Assistant Professor, Graduate School of Business, University of Chicago 1977-1983 Associate Professor, Graduate School of Business, University of Chicago 1984-1985 Associate Professor, Graduate School of Management, University of California, Davis 1985-1989 Professor, Graduate School of Management, University of California, Davis 1994-1998 Consulting Professor of Law, School of Law, Stanford University 1990- President, William E. Wecker Associates, Inc.

ACTIVITIES

1977-1981 Associate Editor (Theory and Methods), Journal of the American Statistical Association

1981-1999 Associate Editor, Journal of Business and Economic Statistics

1990-1992 Management Committee, Journal of Business and Economic Statistics

1976-1994 Seminar Leader, NSF/NBER Seminar on Time Series Analysis

1993-1994 National Advisory Council on Environmental Policy and Technology (Lead Subcommittee)

Member of: American Association for the Advancement of Science American Statistical Association Institute of Mathematical Statistics Society for Risk Analysis

PUBLICATIONS

“A Nonparametric Approach to the Construction of Prediction Intervals for Time Series Forecasts” (with W. A. Spivey), Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1972.

“Regional Economic Forecasting: Concepts and Methodology” (with W. A. Spivey), The Regional Science Association Papers, Vol. 28, 1972, pp. 257-276.

“On the Weighted Average Cost of Capital” (with R. R. Reilly), Journal of Financial and Quantitative Analysis, January 1973, Vol. VIII, pp. 123-126.

“On Random Walks with Absorbing Barriers” (with Thomas E. Morton), Proceedings of the Business and Economic Statistics Section-- American Statistical Association, 1973.

“Prediction Methods for Censored Time Series,” Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1974.

“More on the Weighted Average Cost of Capital: Reply” (with R. R. Reilly), Journal of Financial and Quantitative Analysis, June 1975.

“Predicting Mail Order Demand for Style Goods,” Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1975.

“The Prediction of Turning Points,” Proceedings of the Business and Economic Statistics Section-- American Statistical Association, 1976.

“Bounds on Absorption Probabilities for the m-Dimensional Random Walk” (with T. Morton), Journal of the American Statistical Association, March 1977.

“Discounting, Ergodicity and Convergence of Markov Decision Processes” (with T. Morton), Management Science, April 1977.

“Comments on ‘Forecasting with Econometric Methods: Folklore versus Fact’,” Journal of Business, 1978, pp. 585-586.

“Comment on ‘Seasonal Adjustment When Both Deterministic and Stochastic Seasonality Are Present’,” Proceedings of the NBER-CENSUS Conference on “Seasonal Analysis of Economic Time Series,” U.S. Government Printing Office, Washington, D.C., 1978, pp. 274-280.

“Predicting Demand from Sales Data in the Presence of Stockouts,” Management Science, 1978, Vol. 34, No. 10, pp. 1043-1054.

“The Time Series Which Is the Product of Two Stationary Time Series,” Stochastic Processes and Their Application, 1978, pp. 153-157.

“Predicting the Turning Points of a Time Series,” Journal of Business, January 1979, Vol. 52, pp. 35- 50.

“A New Approach to Seasonal Adjustment,” Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1979.

“Linear and Nonlinear Regression Viewed as a Signal Extraction Problem” (with C. Ansley), Proceedings of the Business and Economic Statistics Section-- American Statistical Association, 1980.

“Asymmetric Time Series,” Journal of the American Statistical Association, March 1981.

“Predicting a Multitude of Time Series” (with R. A. Thisted), Journal of the American Statistical Association, September 1981.

“Applications of the Signal Extraction Approach to Regression” (with C. Ansley), Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1981.

“Nonparametric Multiple Regression by Projection Iteration” (with C. Ansley), Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1982.

“The Signal Extraction Approach to Nonlinear Regression and Spline Smoothing” (with C. Ansley), Journal of the American Statistical Association, March 1983.

“Extensions and Examples of the Signal Extraction Approach to Regression” (with C. Ansley), Applied Time Series Analysis of Economic Data, A. Zellner (ed.), Washington, D.C.: Bureau of the Census/ASA, 1983.

“The Signal Extraction Approach to Estimating Income and Price Elasticities: A Data Example” (with C. Ansley), Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1983.

“A Nonparametric Bayesian Approach to the Calibration Problem,” (with C. Ansley), Proceedings of the Business and Economic Statistics Section--American Statistical Association, 1984.

“On Dips in the Spectrum of a Seasonally Adjusted Time Series” (with C. Ansley), Journal of Business and Economic Statistics, October 1984.

“Estimating Damages in a Class Action Litigation” (with E. George), Journal of Business and Economic Statistics, April 1985.

“Making Statistics More Effective in Schools of Business: Interdisciplinary Cooperation” (with R. Hamada, J. Patell, R. Staelin), Proceedings of the Business and Economic Statistics Section-- American Statistical Association, 1986.

“The Role of Statistics in Accounting, Marketing, Finance and Production” (with R. Hamada, J. Patell, R. Staelin), Journal of Business and Economic Statistics, 1988.

“Assessing the Accuracy of Time Series Model Forecasts of Count Observations,” Journal of Business and Economic Statistics, October 1989.

“Impact of the Soviet Grain Embargo; A Comparison of Methods” (with A. Webb, et al ), Journal of Policy Modeling, pp. 361-389, 1989.

“Modeling Daily Milk Yield in Holstein Cows Using Time Series Analysis” (with H. Deluyker, et al.), Journal of Dairy Science, pp. 539 - 548, 1990.

“Controlling Emissions from Motor Vehicles: A Benefit-Cost Analysis of Vehicle Emission Control Alternatives” (with L. Lave, et al.), Environmental Science & Technology, August 1990.

“Statistical Estimation of Incremental Cost from Accounting Data” (with R. Weil), Handbook of Litigation Services for Accountants and Lawyers, John Wiley & Sons, 1990.

“Correcting for Omitted-Variables and Measurement-Error Bias in Regression with an Application to the Effect of Lead on IQ” (with M. L. Marais), Journal of the American Statistical Association, June 1998.

Appendix B

R. GARRISON HARVEY March 2019

William E. Wecker Associates, Inc. 270 E. Simpson Avenue Jackson, WY 83001-1010

Telephone: (307) 732-6850 E-Mail: [email protected]

Gary Harvey is Vice President and Principal Consultant at William E. Wecker Associates, Inc. based in Jackson Hole, WY. He received the Bachelor of Science degree in Applied Mathematics from the United States Air Force Academy and the Master of Science degree in Operations Research from the Air Force Institute of Technology. Prior to joining William E. Wecker Associates, Inc. he was an officer in the U.S. Air Force analyzing U.S. force structure and weapon systems performance.

He has served as an expert witness in litigation and arbitration in matters evaluating damages, breach of contract, copyright infringement, consumer product performance, epidemiology, relationship between gun availability and crime, sample design and evaluation, credit card market analysis and profitability, and class certification.

Additionally, he has worked as the principal consultant and project manager on many prominent multi-billion dollar litigations and business consulting engagements including: antitrust matters involving price-fixing, false advertising, unfair competition and monopolization, consumer product safety and performance, environmental damage, class actions alleging disparate impact in insurance, lending and wages, patent and intellectual property matters involving pharmaceutical drugs, petrochemical formulation, and automobile devices.

Mr. Harvey has expertise in statistical and mathematical analysis of data. This expertise includes damage analysis, survey design, analysis and administration, U.S. and international credit card market analysis, profitability and forecasting, human health and epidemiology involving tobacco risks, dynamic propagation of viruses, pharmaceutical drugs, and consumer products; automobile safety and valuation, hospital data analysis, class certification, market analysis, evaluation of insurance claims including allocation among primary and excess insurance carriers; behavioral analysis, environmental damage analysis, regression analysis, survival analysis, Bayesian analysis including imputation of missing data, propensity score analysis, conjoint analysis, forecasting, and big data analysis.

EDUCATION

B.S. (Applied Mathematics) (1988), USAF Academy M.S. (Operations Research) (1992), Air Force Institute of Technology

PROFESSIONAL EXPERIENCE

1988 - 1990 Scientific Analyst, USAF, Vandenberg AFB, CA 1990 - 1992 Graduate Student, USAF, Air Force Institute of Technology 1992 - 1995 Scientific Analyst, USAF, Scott AFB, IL 1992 - 1993 Total Quality Management Instructor, USAF, Scott AFB, IL 1992 - 1995 Adjunct Professor, Belleville Area College, Belleville, IL 1996 - 1999 Senior Consultant, William E. Wecker Associates, Inc. 2000 - Vice-President, Principal Consultant, William E. Wecker Associates, Inc.

HONORS Meritorious Service Medal (MSM) while officer in US Air Force. Air Mobility Command Officer of the Year, 1993. Barchi Prize, 1994 Military Operations Research Society. Best Application of Operations Research/Management Science Achievement Award, 1993. Institute of Management Science/Operations Research Society of America, St. Louis Gateway Chapter.

SELECT EXPERT REPORTS, TESTIMONY, DECLARATIONS AND PROCEEDINGS • Expert for Visa USA in litigation with credit card issuer. Issues involved damages calculations, breach of contract, consumer product performance, credit card market analysis and profitability. • Expert for Major League Baseball, National Football League, National Basketball Association and Women’s National Basketball Association in Cable Royalty Distribution Proceedings. Issues involved sample analysis of Nielsen data to determine the relative economic value of programming and the allocation of royalty revenues. • Expert for Allianz SE Insurance Company in asbestos coverage litigation for historical products and operations claims. Issues involved sample design and analysis, products/operation insurance coverage, forecasting, and primary and excess insurance policy allocation analysis. • Expert for BP Solar International, Inc. in class action litigation. Issues involved damages calculation, product failure analysis, sample design and analysis and forecasting. • Expert for Chase Bank in litigation with major retail cobrand partner. Issues involved damages calculations, consumer product performance, forecasting, credit card market analysis and profitability of card portfolio. • Expert for Altria Client Servicer LLC, testimony at the FDA’s Tobacco Products Scientific Advisory Committee regarding a proposed "modified risk" claim. • Presented my analysis to senior Pentagon officials, Joint Chiefs of Staff, all military four-star generals, all Air Force generals, and members of Congress to determine which aircraft to purchase to maximize capability across various warfighting scenarios. Awarded MSM. • Expert for Countrywide Home Loans in class action litigation. Issues involved sample design and analysis. • Expert for gun manufacturers in litigation on gun sales and tracing. Issues involved sample design and analysis, the relationship between gun availability and crime, and forecasting. • Expert for R.J. Reynolds Tobacco Company in class action litigation. Issues involved epidemiology and data analysis. Estimated the relations between smoking cessation and disease risk.

PUBLICATIONS/PRESENTATIONS "Constrained System Optimization and Capability Based Analysis" (with K. Bauer, J. Litko), Military Operations Research , Vol 2, No 4, 1997, pp. 5-19. "Military Modeling and Simulation: Reflections and Directions", 1994 Winter Simulation Conference Proceedings, pp. 741-743. "Constrained System Optimization and Capability Based Analysis", 62nd Military Operations Research Society, National Meeting, 1993. "Force Allocation Through Constrained Optimization", 61st Military Operations Research Society, National Meeting 1993. Awarded Best Working Group Paper. "Experimental Design Considerations in the Optimization of Stochastic Response Surfaces", Sponsored Session presentation, TIMS/ORSA Joint National Meeting, Chicago 1993. "C-141 Depot Maintenance: Using Simulation to define Resource Requirements" (with T. Schuppe, D. McElveen, P. Miyares), Air Force Journal of Logistics, Winter-Spring 1993, pp. 11-15. "Force Allocation Through Constrained Optimization of Stochastic Response Surfaces" (with K. Bauer, J. Litko), 1992 Winter Simulation Conference Proceedings, pp. 1121-1129. "C-141 Depot Maintenance: Using Simulation to Define Resource Requirements" (with T. Schuppe, D. McElveen, P. Miyares), 1992 Winter Simulation Conference Proceedings, pp. 1145-1152. Invited lectures at: University of Washington in St. Louis, University of St. Louis, United States Air Force Academy, Air Force Institute of Technology, and Pentagon Studies and Analysis group.

Appendix C

Table 8 shows the volume (i.e., subscriber-weighted minutes) of local affiliate programming relative to network-originated programming on ABC, CBS and NBC affiliate stations carried pursuant to the Section 119 license during the 2010-13 period.

Table 8: Local Affiliate Programming and Network-Originated Programming on ABC, CBS and NBC Affiliate Stations – 2010-1315

programming type year volume share local affiliate 2010 123,327,222,588 45.89% network-originated 2010 145,444,036,193 54.11% 268,771,258,781 100.00%

local affiliate 2011 105,408,503,599 46.05% network-originated 2011 123,469,713,313 53.95% 228,878,216,912 100.00%

local affiliate 2012 94,521,376,430 46.17% network-originated 2012 110,199,017,584 53.83% 204,720,394,014 100.00%

local affiliate 2013 87,386,611,989 46.79% network-originated 2013 99,396,005,485 53.21% 186,782,617,474 100.00%

local affiliate 2010-13 410,643,714,606 46.18% network-originated 2010-13 478,508,772,575 53.82% 889,152,487,181 100.00%

15 See our electronic file 09_network_analysis.do.

Appendix D

To ensure that our satellite subscriber-weighted volume measurements are valid, we analyze the original volume data underlying the Israel regression for 2010-1216, and see how Dr. Israel’s measures of cable volume for that period compare to Dr. Crawford’s measures of cable volume for that same period. While we are not using Dr. Israel’s data to measure cable volume in this proceeding, much of the same data is incorporated in our satellite volume analysis. Comparing this subset of the Israel data to Crawford’s reported cable volumes provides additional confidence that Dr. Israel and Crawford have obtained comparable volume measures. Table 9 below compares these volume measures.

Table 9: Crawford vs. Israel Cable Volume Shares Compensable Distant Cable Broadcast Minutes Weighted by Distant Subscribers17

Crawford Fig 12 (Corrected Apr 11, 2017 Israel Data Testimony) Category 2010 2011 2012 2010 2011 2012 Commercial TV 14.7% 15.7% 16.5% 15.67% 15.89% 17.14% Devotionals 3.2% 2.3% 1.8% 2.78% 2.26% 1.90% Program Suppliers 38.3% 33.7% 31.9% 37.01% 32.72% 29.75% JSC 5.4% 5.2% 6.2% 5.20% 5.78% 6.41% Public TV 32.3% 36.9% 36.6% 34.33% 38.23% 39.04% Canadian Claimants 6.0% 6.2% 7.0% 5.01% 5.11% 5.76% Total 100% 100% 100% 100% 100% 100%

16 See JSC Ex. 4 (Israel Written Direct Testimony). 17 See our electronic file “11_israel_analysis.do”.

Appendix E

Table 10: Details of Royalty Dollars Allocations for Satellite (Basic Fund)

cable satellite Cable royalty to Volume royalty Satellite share Scale 16) royalty category Share share Volume multiplier X to total allocation (Crawford multiplier Share satellite 100% Fig. 12 ) share 141= 171461/ [2] P1 [S] (6)=[4]• [5] 131/121 Total[6] Can 6.0% 5.0% 0.83 Pub TV 32.3% 14.8% 0.46 BC6 14.7% 16.8% 1.14 23.27% 26.6% 22.18% 2010 Dev 3.2% 4.0% 1.25 1.74% 2.2% 1.81% PS 38.3% 26.5% 0.69 67.72% 46.9% 39.08% JSC 5.4% 32.9% 6.09 7.27% 44.3% 36.93% Total 100% 100% 100% 120% 100%

Can 6.2% 5.0% 0.81 Pub TV 36.9% 18.6% 0.50 BCG 15.7% 16.8% 1.07 24.18% 25.9% 20.80% 2011 Dev 2.3% 5.5% 2.39 1.69% 4.0% 3.25% PS 33.7% 23.9% 0.71 65.92% 46.8% 37.60% JSC 5.2% 30.2% 5.81 8.21% 47.7% 38.35% Total 100% 100% 100% 124% 100%

Can 7.0% 5.0% 0.71 Pub TV 36.6% 17.9% 0.49 L KG 16.5% 16.2% 0.98 29.71% 29.2% 21.70% 2012 Dev 1.8% 5.5% 3.06 1.52% 4.6% 3.45% PS 31.9% 21.5% 0.67 57.46% 38.7% 28.81% JSC 6.2% 33.9% 5.47 11.32% 6:9% 46.04% Total 100% 100% 100% 134% 100%

Can 7.6% 5.5% 0.72 Pub TV 39.7% 19.5% 0.49 BCG 15.6% 15.3% 0.98 28.66% 28.1% 20.03% 2013 Dev 1.6% 4.3% 2.69 1.51% 4.1% 2.89% PS 28.7% 19.3% 0.67 56.85% 38.2% 27.24% JSC 6.7% 36.1% 5.39 12.99% 70.0% 49.85% Total 100% 100% 100% 140% 100%

BCG 21.20% 2010- Dev 2.84% PS 33.40% 2013 JSC 42.57% Total 100%

Source [3) Table 1 of "Final allocation determination -as publ ished.pdt [Federal Regsiter Vol 84 No 29 Feb 12 2019)

Table 11: Details of Royalty Dollars Allocations for Satellite (3.75 Percent)

cable satellite Cable royaityto Volume royalty Satellite share Scale 161 royalty category Share share Volume multiplier X to total allocation (Crawford multiplier Share satellite 100% Fe. 12) share [4]= [1] [2] [3] [5] [6]=[4]•[5] PH611 [3]/[2] STot Can 6.0% 5.9% 0.98 Pub TV 32.3% 0.0% 0.00 BCG 14.7% 19.7% 1.34 23.27% 31.2% 22.17% 2010 Dev 3.2% 4.7% 1.47 1.74% 2.6% 1.82% PS 38.3% 31.1% 0.81 67.72% 55.0% 39.09% .ISC 5.4% 38.6% 7.15 7.27% 52.0% 36.93% Total 100% 100% 100% 141% 100%

Can 6.2% 6.1% 0.98 Pub TV 36.9% 0.0% 0.00 BCG 15.7% 20.6% 1.31 24.18% 31.7% 20.76% 2011 Dev 2.3% 6.8% 2.96 1.69% 5.0% 3.27% PS 33.7% 29.4% 0.87 65.92% 57.5% 37.64% JSC 5.2% 37.1% 7.13 8.21% 58.6% 38.34% Total 100% 100% 100% 153% 100%

Can 7.0% 6.1% 0.87 Pub TV AR 6% 0 0% n no IS Ilk BCG 16.5% 19.7% 1.19 29.71% 35.5% 21.67% 2012 Dev 1.8% 6.7% 3.72 1.52% 5.6% 3.45% PS 31.9% 26.2% 0.82 57.46% 47.2% 28.83% JSC 6.2% 41.3% 6.66 11.32% 75.4% 46.06% Total 100% 100% 100% 164% 100%

Can 7.6% 6.8% 0.89 Pub TV 39.7% 0.0% 0.00 Or a BCG 15.6% 19.0% 1.22 28.66% 34.9% 20.01% 2013 Dev 1.6% 5.3% 3.31 1.51% 5.0% 2.86% PS 28.7% 24.0% 0.84 56.85% 47.5% 27.25% JSC 6.7% 44.9% 6.70 12.99% 87.0% 49.88% Total 100% 100% 100% 174% 100%

BCG 21.17% 2010- Dev 2.84% PS 33.42% 2013 JSC 42.58% Total 100%

Source i3J: Table 1 of 'Final allocation determination -as publisted.pdf (Federal Regsiter Vol 84 No 29 Feb 12 2019)

Proof of Delivery

I hereby certify that on Friday, March 22, 2019 I provided a true and correct copy of the Written Direct Statement of Joint Sports Claimants - Vol. I of III to the following:

Settling Devotional Claimants, represented by Matthew MacLean served via Email

Devotional Claimants, represented by Clifford M Harrington served via Electronic Service at [email protected]

Motion Picture Association of America (MPAA)-Represented Program Suppliers, represented by Alesha M. Dominique served via Email

Spanish Language Producers (SLP), represented by Brian Boydston served via Email

Broadcast Music, Inc. (BMI), represented by Jennifer T. Criss served via Electronic Service at [email protected]

Broadcast Music, Inc., represented by Janet Fries served via Email

Spanish Language Producers, represented by Brian D Boydston served via Electronic Service at [email protected]

American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI), represented by Jennifer Criss served via Email

Multigroup Claimants, represented by Brian D Boydston served via Electronic Service at [email protected]

Joint Sports Claimants (JSC), represented by M.Sean Laane served via Email

SESAC, Inc., represented by John C. Beiter served via Electronic Service at [email protected]

Major League Soccer, LLC, represented by Edward S. Hammerman served via Electronic Service at [email protected]

American Society of Composers, Authors and Publishers (ASCAP), represented by Sam Mosenkis served via Electronic Service at [email protected]

MPAA-represented Program Suppliers, represented by Gregory O Olaniran served via Electronic Service at [email protected]

National Public Radio, Inc. (NPR) (submitted comment), represented by Gregory A Lewis served via Electronic Service at [email protected]

Broadcaster Claimants Group, represented by John Stewart served via Electronic Service at [email protected]

American Society of Composers, Authors and Publishers, represented by Samuel Mosenkis served via Email

Signed: /s/ Michael E Kientzle