LOS ANGELES — The NFL has been found guilty of breaking antitrust laws in its distribution of out-of-market Sunday afternoon games on the “Sunday Ticket” premium subscription service.
Even though the jury of five men and three women in a U.S. District Court awarded nearly $4.8 billion in damages Thursday to residential and commercial subscribers of “Sunday Ticket,” don’t expect any settlement checks or the shuttering of the service anytime soon.
The league broke antitrust laws by selling “Sunday Ticket” only on DirecTV and at an inflated price. By offering the service on only one distributor and with a high price, that limited the subscriber base and satisfied concerns by CBS and Fox about preserving local ratings while the NFL got a lot of money for its broadcast rights.
Three weeks. It began with opening statements on June 6 and featured 10 days of testimony before closing arguments on Wednesday. The jury deliberated for nearly five hours Wednesday and Thursday before coming to a decision.
The NFL brought in Commissioner Roger Goodell and Dallas Cowboys owner Jerry Jones to testify, but it didn’t help. The plaintiffs’ mostly used economists and video from pre-trial depositions.
The class action applied to more than 2.4 million residential subscribers and 48,000 businesses, mostly bars and restaurants, that purchased “NFL Sunday Ticket” from June 17, 2011, to Feb. 7, 2023.
The jury awarded $4.7 billion to residential subscribers and $96 million to businesses. Because damages are trebled under federal antitrust laws, the NFL could end up being liable for $14.39 billion unless it reaches a settlement or it is reduced
The residential damages were slightly less than the $5.6 billion offered under the plaintiffs’ College Football Model but more than a model where “Sunday Ticket” would have multiple carriers and a 49.7% reduction in the subscription cost ($2.81 billion).
The business damages were much lower than the plaintiffs presented in any of their three models. The lowest was $332 million under what was called the “NFL Tax” model.
It would be spread equally among the 32 teams. That means each one could be paying as much as $449.6 million.
Changes to the “Sunday Ticket” package and/or the ways the NFL carries its Sunday afternoon games would be stayed until all appeals have been concluded. If the league was smart though, it would start offering team-by-team or week-by-week packages along with reducing the price.
ESPN proposed offering “Sunday Ticket” for $70 per season with team-by-team packages in 2022, but it was turned down by the NFL before it went with YouTube TV.
If the NFL offered team-by-team packages all along, one of the key class members likely would not have been part of the lawsuit.
Rob Lippincott - a New Orleans native who moved to California - bought “Sunday Ticket” only for Saints games.
“He just wanted the Saints. If he had a choice to buy a single-team package and watch the Saints games, he absolutely would have,” plaintiffs attorney Amanda Bonn said during her opening remarks on June 6.
The landmark college football TV case in 1984 was determined by the U.S. Supreme Court. This was at the U.S. District Court level.
The NFL said it would appeal the verdict. That appeal would go to the 9th Circuit Court of Appeals and then possibly the Supreme Court.
It wouldn’t be the first time the 9th Circuit has seen this case.
The lawsuit was originally filed in 2015 by the Mucky Duck sports bar in San Francisco. On June 30, 2017, U.S. District Judge Beverly Reid O’Connell dismissed the lawsuit and ruled for the NFL. Two years later, the 9th Circuit Court of Appeals reinstated the case.
During his closing remarks, lead attorney Bill Carmody showed an April 2017 NFL memo that showed the league was exploring a world without “Sunday Ticket” in 2017, where cable channels would air Sunday afternoon out-of-market games not shown on Fox or CBS.
Judge Philip S. Gutierrez voiced his frustration with the plaintiffs’ attorneys midway through the trial, but the closing argument by Carmody was clear and easy to understand.
The NFL might be the king of American sports and one of the most powerful leagues in the world but it often loses in court, especially in Los Angeles. It was in an LA federal court in 1982 that a jury ruled the league violated antitrust rules by not allowing Al Davis to move the Raiders from Oakland to Los Angeles.
All eyes turn to July 31 when Gutierrez is scheduled to hear post-trial motions. That will include the NFL’s request to have him rule in favor of the league because the judge determined the plaintiffs did not prove their case.
All the major leagues offer out-of-market packages they are keeping an eye on this case because individual teams selling their out-of-market streaming rights, especially in baseball, would further separate the haves from the have nots.
A major difference though is that MLB, the NBA and the NHL sell their out-of-market packages on multiple distributors and share in the revenue per subscriber instead of receiving an outright rights fee.
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