To the surprise of many, the NFL has not settled an antitrust class action lawsuit over Sunday Ticket and is instead defending the league’s broadcasting practices in a trial currently taking place in federal district court in Los Angeles.
The court’s impressions suggest the league’s gamble is paying off.
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According to journalists present at the trial, U.S. District Judge Philip Gutierrez repeatedly expressed skepticism regarding the plaintiffs’ case. He could even grant a motion for judgment as a matter of law. Before the case goes to the jury, a judge may conclude that no reasonable jury could reach a different conclusion.
According to The Wall Street Journal’Joe Flint, Gutierrez counted The plaintiffs’ lawyers “really have nothing” and are overwhelmed by a “total disconnect” between their arguments and what was expressed during the trial. Joe Reedy’s Associated Press reported Gutiérrez criticizing the plaintiffs’ attempt to connect the Dallas Cowboys who sought independence from the NFL licensing for merchandise and sponsorships in the 1990s with TV broadcast rights.
As explained in more detail in Sportin test viewthe main antitrust issue presented by In Re: NFL “Sunday Ticket” Antitrust Litigation is whether individual NFL teams can agree to license their broadcasts without competing with each other. NFL teams are competing companies. Antitrust law typically requires competitors to compete.
Instead of a world where, for example, the Chicago Bears license their broadcast rights to a television station in San Diego so that Bears fans living there can watch Bears games, possibly at no cost or at least paying less than they pay for Sunday Ticket, the Bears and the other 31 teams agree to share their broadcast rights through Sunday Ticket. The service is available on YouTube TV for $349/year (discounts, promotions, and add-ons can reduce this price).
This bundling has been good for local fans, who can usually watch their favorite NFL team without having to subscribe to a paid cable or satellite service — unlike local fans of NBA, NHL, and MLB teams, who usually have to pay to watch their teams’ games on TV. But out-of-town NFL fans have to pay.
Of course, there is no legal “right” to watch an NFL game on TV for free. The NFL, like other sports leagues and entertainment companies, is a private entity. Private entities can transfer broadcast and streaming content to paid services and charge prices that they consider to be market commands. The relevant legal question is not about the NFL, but about the NFL teamsas competing companies, agreeing not to compete in broadcast licensing.
The class action began nine years ago and serves more than 2.4 million residential subscribers and more than 48,000 restaurants, bars and other commercial establishments that have purchased Sunday Ticket. Potential damages could reach $20 billion, as antitrust damages are typically tripled.
But the NFL’s decision to go to trial indicates the league has great confidence it will prevail. The NFL rarely goes to trial. If the league is unable to settle the case, it will have the financial resources to negotiate settlements. This was seen in the NFL concussion litigation, where the league negotiated a $1 billion settlement that will be paid out over a 65-year period.
In addition to potential harm, the league may have been concerned that NFL officials and owners would testify and answer questions under oath from qualified litigants seeking to agitate and mislead them. Cowboys owner Jerry Jones testified; he faced questions about his team’s performance litigation against the NFL in the 1990s involving sponsorship deals.
It’s telling that the NFL hasn’t found its footing despite these risks. The league likely believes its legal defenses are sufficiently persuasive.
The NFL defended the Sports Broadcasting Act of 1961, a law that exempts professional football, basketball, baseball and hockey leagues from antitrust scrutiny when they negotiate a national TV contract with a network that provides “sponsored broadcast” (i.e., free and free). -air) of games, applies. While Sunday Ticket, as a paid service, is not protected by the SBA, it is part of a larger TV deal that includes fans watching NFL home games over the air for free.
The NFL also emphasized that Sunday Ticket ensures fans can watch any game. If out-of-town fans were to rely on individual team agreements to broadcast games where they live, some fans might live in areas where games would not be available.
In the example above, with the Bears fan living in San Diego, that fan would hope that the Bears would find it economically advantageous – and find a willing partner – to broadcast Bears games in San Diego. Disrupting the league’s TV model could also undermine what has been an extremely popular product among fans: Last year, the N.F.L. accounted for for 93 of the 100 most-watched TV broadcasts of the year in the US. Even the NFL’s harshest critics would have to admit that the league has no equal when it comes to broadcasts.
The trial is expected to conclude early next week. Assuming Gutierrez sends the case to the jury, it remains to be seen how the jurors will decide. The NFL is likely optimistic that not reaching a deal to end the case will be the right decision.
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