Judicial Frustration in NFL Sunday Ticket Antitrust Case
LOS ANGELES -- The class-action lawsuit filed against the NFL by "Sunday Ticket" subscribers has hit a contentious phase, marked by the federal judge's growing impatience with the plaintiffs' legal team. The lawsuit, representing 2.4 million residential subscribers and 48,000 businesses who purchased the out-of-market games package from 2011 through 2022, alleges that the NFL violated antitrust laws by inflating prices and restricting competition.
Straightforward Case, Complex Proceedings
U.S. District Judge Philip Gutierrez emphasized that the premise of the case was simple. He illustrated the frustration a Seattle Seahawks fan in Los Angeles might feel when forced to buy an entire subscription package to watch their favorite team. This user-friendly example, however, contrasts sharply with the actual legal proceedings, which he described as convoluted and mismanaged by the plaintiffs' attorneys.
The plaintiffs argue that the NFL breached antitrust laws by selling the package of Sunday games broadcasted on CBS and Fox at inflated prices and limiting "Sunday Ticket" availability to a single satellite provider, DirecTV. In response, the NFL maintains that it possesses the right to sell the package under its antitrust exemption for broadcasting rights.
A Battle Over Broadcasting Rights
The heart of the dispute lies in the interpretation of the NFL's antitrust exemption. The league insists that this exemption covers all broadcasting rights, while the plaintiffs claim it only applies to over-the-air broadcasts, not pay TV. If the court finds the NFL liable, the jury could award up to $7 billion in damages. This amount could triple to $21 billion under antitrust laws, which allow for treble damages.
Adding to the complexity, Judge Gutierrez previously reprimanded plaintiffs' attorneys for unnecessarily reiterating past testimonies, which he deemed a waste of time. He also expressed skepticism regarding the relevance of mentioning Dallas Cowboys owner Jerry Jones’s 1995 lawsuit against the NFL over licensing and sponsorship procedures. Jones had filed the lawsuit in 1994, stating that although he supported the NFL's television contract model and revenue-sharing arrangements, he opposed its licensing practices.
When questioned this Tuesday about the potential for teams to sell their out-of-market television rights individually, Jones opposed the idea, arguing that it would undermine the current free TV model.
Opposition from CBS and DirecTV's Pricing Strategy
Retired CBS Sports chairman Sean McManus also testified, reiterating his long-standing objections to "Sunday Ticket" and the NFL's Red Zone channel. McManus contended that "Sunday Ticket" infringes on CBS’s exclusive rights in local markets. Both CBS and Fox had earlier insisted that "Sunday Ticket" be marketed as a premium package during contractual negotiations.
During the class-action period, DirecTV, not the NFL, set the pricing for "Sunday Ticket." The NFL's deals with CBS and Fox contained clauses designating the resale packages as premium products intended for avid fans that complement in-market game offerings. Moreover, the contract language prohibited selling individual games on a pay-per-view basis.
From 1994 to 2022, the NFL received a rights fee from DirecTV. Last year, Google's YouTube TV acquired "Sunday Ticket" rights for the next seven seasons, adding another layer of change to the situation.
In a deposition, DirecTV marketing official Jamie Dyckes mentioned that other major leagues, including MLB, the NBA, and the NHL, had suggested retail prices for their out-of-market packages. According to Dyckes, these leagues engaged in revenue sharing with carriers due to their packages being distributed across multiple platforms.
Future Proceedings and Judicial Considerations
Testimony is set to continue on Thursday, with closing statements expected early next week. Judge Gutierrez hinted at the possibility of invoking a rule that allows the court to determine that a jury lacks sufficient evidence to rule in favor of one party or the other if the trial doesn't adhere to its straightforward premise.
Judge's Growing Frustration
Gutierrez has not held back his critiques during the proceedings. He candidly admitted, “I’m struggling with the plaintiffs' case,” reflecting his mounting frustrations. "The way you have tried this case is far from simple," he observed, further describing the situation as "25 hours of depositions and gobbledygook." He concluded by saying, "This case has gone in a direction it shouldn’t have gone."
As the legal battle continues, all attention remains on the courtroom, where the plaintiffs' attorneys need to present a more compelling and straightforward argument to align with Judge Gutierrez’s expectations.