If the NFL thought the Sunday Ticket antitrust litigation—which has been in federal court since 2015—would move to the rearview mirror now that Sunday Ticket is set to move from DirecTV to YouTube TV, a federal judge’s ruling on Tuesday squashed that notion.
In a 27-page decision obtained by Sportico, Judge Philip Gutierrez certified the lawsuit on behalf of two classes that include millions of subscribers. The first class, which projects to have at least 2.4 million members, includes residential subscribers who bought the Sunday Ticket after June 17, 2011. The second class includes at least 48,000 commercial establishments, such as restaurants and bars, that have subscribed during the same period.
The expansion of the case to a class action means if the league loses, it could be forced to pay a massive bill—especially since antitrust damages are subject to being automatically multiplied by three. Court records indicate damages would total $6.1 billion. The threat of such a massive judgment could motivate the league to seek a settlement.
Although the case involves multilayered questions of antitrust law and broadcasting economics, Gutierrez succinctly summarized its gist. “[F]ans who want to watch out-of-market games,” he wrote, “must choose either Sunday Ticket or nothing—they cannot, for example, purchase out-of-market games individually or by team. This is the basis for Plaintiffs’ antitrust action: absent the anticompetitive agreements, the telecasts solely available on Sunday Ticket would be available through other means, which would result in a greater number of telecasts of NFL games that would be more accessible to more viewers at lower prices.”
To further understand In Re: NFL’s “Sunday Ticket” Antitrust Litigation, consider an alternative arrangement where each NFL team could decide to sell broadcast rights to other teams’ markets. The Dallas Cowboys, for example, could negotiate with networks and stations in cities across the U.S. that might have enough Cowboys fans to make it worthwhile to broadcast games there. That can’t happen, however, because NFL teams agree to not poach each other’s markets and instead encourage out-of-town fans to pay about $294 a year for the Sunday Ticket.
The fact that NFL teams, which are competing businesses, agree to limit how they compete in the broadcast of games is the alleged antitrust problem. In a more competitive market, more games might become available to out-of-town fans at a cheaper price.
To be clear, the NFL rejects that argument as factually wrong and economically irrational. It contends fans would be worse off in a setting where some out-of-town fans might not be able to watch their favorite team play if no broadcasts are available where they reside. Viewing options for out-of-town fans might become more chaotic, less reliable and more expensive.
The plaintiffs seek not only monetary compensation for what they say are “overcharges” but also a court-ordered injunction that would restrain the NFL from continuing its so-called anti-competitive conduct. The league argued that an injunction would be moot by the time the case is resolved since the NFL’s deal with DirecTV ends with the end of the 2022 season. The Sunday Ticket will move to YouTube TV, behind a paywall, for the 2023 season.
Gutierrez bluntly rejected the NFL’s mootness argument as “myopic and unconvincing” since “the challenged conduct driving this antitrust case remains ongoing, without a commitment from Defendants that it will end.” He reasoned that, contrary to the NFL’s assertions, an injunction would “benefit the entire class because it would alleviate the anticompetitive harm across the board for the football-viewing class members—that is, an injunction would put an end to the alleged restraints on NFL football telecasts that result in inflated market prices.”
Even if YouTube’s owner, Google/Alphabet, isn’t named as a defendant once the Sunday Ticket deal begins, it could suffer from an injunction against Sunday Ticket. An injunction could potentially require modifications to Sunday Ticket in terms of the distribution of games and price point. How that type of risk impacts the NFL’s relationship with its new Sunday Ticket partner remains to be seen.
Barring a settlement, the case will likely remain in the courts for years. A ruling at the district court would be subject to appeals. But make no mistake: the NFL’s dominance of TV is now more vulnerable to a potentially costly and disruptive legal challenge.