LOS ANGELES – Professional sports leagues have 4.8 billion reasons to review how they distribute out-of-market broadcasts after Thursday’s judgment against the NFL in the “Sunday Ticket” case in U.S. District Court.
“It will be necessary for other leagues to take a hard look at their model and make sure that the means by which they offer consumer choice actually ensure true choice,” said Christine Bartholomew, vice provost and professor at the University at Buffalo School. of law. “What happened here, at least according to the jury, was that the NFL actually suppressed consumer choice. Not only did they direct consumers to use satellite TV, but it also meant they had to buy the whole package.”
The jury of five men and three women determined that the NFL violated antitrust laws by distributing Sunday afternoon games not broadcast locally by Fox or CBS on a premium subscription service that had only one distributor. This kept the cost of the package high and limited who could subscribe so it didn’t impact local ratings.
The class action lawsuit covered 2.4 million residential subscribers and 48,000 businesses in the United States who paid for the out-of-market game package from the 2011 to 2022 seasons on DirecTV.
The jury awarded $4.7 billion in residential class damages and $96 million in commercial class damages. Because damages can be tripled under federal antitrust laws, the NFL could end up being responsible for $14.39 billion.
Major League Baseball, the National Basketball Association, and the National Hockey League also offer out-of-market packages, but they are structured differently compared to the NFL. All three are offered on cable and satellite providers as well as streaming.
With their digital packages, MLB and NBA offer multiple options, including a team-by-team package. The NBA also offers a pay-per-game option.
The NHL in the US digital package is included with your subscription to the ESPN+ streaming service.
The MLB, NHL and NBA packages also have a lower subscription fee than the “NFL Sunday Ticket” despite having longer seasons.
Ari Lightman, a professor of digital media and marketing at Carnegie Mellon University, said the NFL will need to be more aligned with consumer demands in the future.
“They need to understand different audiences in terms of where they exist, how fans interact and what they are looking for,” he said. “They want things that fit and are personalized to their needs, because anything they overpay for is something unwanted, which is the idea of bundling. … The price they were offering on the ‘Sunday Ticket’ package was a little extreme.”
Some were also surprised that the NFL allowed the case to go to court without a settlement. The league has not fared well in antitrust cases and resolved most of them before they reached the courts.
In 2010, the Supreme Court ruled in the case of American Needle against the NFL that the league was a collection of 32 teams and not a single entity. The cap maker sued the NFL in 2004 for violating antitrust laws by reaching an exclusive agreement with Reebok that began in 2001.
Justice John Paul Stevens wrote in his opinion that “Although NFL teams have common interests, such as promoting the NFL brand, they are still separate, profit-maximizing entities.”
The NFL and American Needle finally settled the case in 2015.
Judge Philip S. Gutierrez is scheduled to hear post-trial motions on July 31, including the NFL’s request that he rule in favor of the league because the judge ruled the plaintiffs had not proven their case.
The NFL said it would appeal the verdict. That appeal would go to the 9th Circuit Court of Appeals and possibly the Supreme Court.
Payment of damages, any changes to the “Sunday Ticket” package and/or the way the NFL conducts its Sunday afternoon games would be suspended until all appeals are completed.
During the closing arguments, the plaintiffs showed a 2017 memo where the NFL was exploring putting games not shown on Fox or CBS on cable channels.
The possibility also remains that at some point the NFL will settle the case. The lawsuit was originally filed in 2015 by San Francisco sports bar Mucky Duck, but was dismissed two years later in U.S. District Court in Los Angeles. The 9th Circuit Court reinstated the case in 2019.
“ People were critical the way the plaintiffs’ case was presented due to the complicated nature of the evidence. Apparently it was the right strategy because they came out victorious,” said Irwin Kishner, co-chair of the Sports Law Group at the New York law firm Herrick. “And the NFL trying to create rich owners may not have the best strategy. Hindsight is always 20/20.”
___
This story originally appeared on ABCNews.go.com read the full story
