Dive Brief:
- The National Football League violated antitrust law by overcharging for its Sunday Ticket agreement to distribute out-of-market games over 11 seasons, a federal jury decided Thursday. Plaintiffs had also contended the league restricted competition by offering the games package only via DirecTV satellite.
- The Los Angeles jury awarded $4.6 billion in damages to 2.4 million residential subscribers and $98 million to 48,000 businesses — mostly sports bars and restaurants — that subscribed to the service between June 2011 and February 2023.
- As damages can be tripled, the league could face a nearly $15 billion impact from the litigation. If upheld, the costs would be borne by the NFL’s 32 teams. The NFL said in a statement that it will appeal the verdict, which it said rested upon class-action claims that are “baseless and without merit.” The league signed a new Sunday Ticket distribution deal in 2022 with Google’s YouTube platform.
Dive Insight:
The league maintained it had the right to sell “Sunday Ticket” under its antitrust exemption for broadcasting. The plaintiffs argued that the exemption applies only to traditional over-the-air broadcasts and not to pay television.
The Sunday Ticket subscription cost consumers around $300 per season. It is currently $449 on YouTube, or $100 less bundled with a YouTube TV subscription plan. The case does not affect the current NFL-YouTube agreement.
“We continue to believe that our media distribution strategy, which features all NFL games broadcast on free over-the-air television in the markets of the participating teams and national distribution of our most popular games, supplemented by many additional choices including RedZone, Sunday Ticket and NFL+, is by far the most fan friendly distribution model in all of sports and entertainment,” the league said Friday in a statement to Legal Dive.
The NFL declined to discuss the case further because the litigation is ongoing. The league is likely to ask the court to set aside the verdict by finding that the plaintiffs had not proven their case, said George Hay, who teaches antitrust law and economics at Cornell University.
Other professional sports leagues are watching the case, the Associated Press noted in its coverage of the lawsuit, as they also sell packages for out-of-market fans. However, pro baseball, basketball and hockey leagues market their out-of-market games on multiple distribution platforms and share in revenues based on subscribers, not from a direct fee for the rights.
Jurors learned during the trial that cable channel ESPN had proposed taking the out-of-market games priced at $70, and to include single-team packages, Front Office Sports reported. The NFL has required that all teams’ games be part of Sunday Ticket. Plaintiffs also revealed that in 2017 the NFL had internally proposed ending the Sunday Ticket package and moving out-of-market games to several cable channels.
During the trial, the plaintiffs had shown that broadcasters Fox and CBS had expressed concerns to the NFL that Sunday Ticket sales could damage ratings for local games.
The NFL likely pressured DirecTV about higher pricing in an effort to assuage its broadcast network partners, and that likely affected jurors’ views of how the league was using its lawful monopoly to negotiate distribution rights, said Hay, a former chief economist for the Justice Department’s antitrust division.
“You can infer things but it’s impossible to know what motivated the jury,” Hay said. “My guess is that the most persuasive story was that the league had pressured DirecTV to raise the price of their product to appease networks.”
One lesson for other companies: “Do not reach agreements on pricing that tells other people what pricing they can charge,” Hay said.