The National Football League (NFL) is currently defending itself against a massive $21 billion antitrust class action lawsuit related to its “Sunday Ticket” package, which offers television access to all regular-season NFL games. The plaintiffs in the case allege that the NFL violated antitrust laws by exclusively selling the “Sunday Ticket” package through DirecTV at an inflated price. This arrangement, they argue, limited the subscriber base and ensured that local ratings for CBS and Fox were preserved, while the NFL profited significantly from its broadcast rights.
The Allegations and the Lawsuit
The lawsuit, which names the NFL, its 32 teams, and DirecTV, accuses the defendants of monopolistic practices. The plaintiffs claim that the NFL and DirecTV charged “supracompetitive monopoly prices” by monopolizing the distribution of games and eliminating competition. Home viewers and commercial subscribers are seeking $7 billion in monetary damages, which could potentially triple under antitrust laws to a staggering $21 billion. The plaintiffs argue that consumers overpaid for the “Sunday Ticket” package due to the NFL’s monopolistic practices, affecting both home viewers and commercial entities like sports bars.
Potential Consequences for the NFL and Other Leagues
The lawsuit was initially filed in 2015 by the Mucky Duck sports bar in San Francisco, California. On June 30, 2017, U.S. District Judge Beverly Reid O’Connell dismissed the lawsuit and ruled in favor of the NFL. However, two years later, the 9th Circuit Court of Appeals reinstated the case. The jury selection for this high-stakes trial began recently, and opening arguments are expected in the coming days. The jury has already awarded $4.7 billion to residential subscribers and $96 million to businesses. Given that damages are tripled under federal antitrust laws, the NFL could potentially be liable for $14.39 billion unless a settlement is reached, or the amount is reduced.
In its defense, the NFL and DirecTV assert that the “Sunday Ticket” package ensures broad access to competitive and exciting NFL games at various price points, including multiple live games available on free broadcast television each week during the regular season. The defense is expected to call high-profile witnesses, including NFL Commissioner Roger Goodell and Patriots owner Robert Kraft, to testify.
The stakes are high, with the focus shifting to July 31 when Judge Gutierrez is scheduled to hear post-trial motions. This includes the NFL’s request for a ruling in its favor on the grounds that the plaintiffs did not sufficiently prove their case. The outcome of this case could have significant implications for other major U.S. sports leagues, such as the MLB, the NBA, and the NHL, which also offer out-of-market packages. If individual teams were allowed to sell their own out-of-market streaming rights, it could exacerbate disparities between wealthier and less wealthy teams, potentially altering the competitive balance across these leagues.
Historical Context and Legal Precedents
This legal battle dates back to the landmark 1984 case NCAA v. Board of Regents of the University of Oklahoma where the The Supreme Court held that the NCAA’s television plan violated the Sherman and Clayton Antitrust Acts. While the current NFL case is in the U.S. District Court level, the NFL plans to appeal any adverse verdict. This appeal would go to the 9th Circuit Court of Appeals and could eventually reach the Supreme Court.
As the case continues to unfold, it remains a critical watch for the entire sports industry, with potential ramifications that could reshape the landscape of sports broadcasting and distribution rights.
Contributions to this blog by Lily Harrison.
