The NFL's "Sunday Ticket" Lawsuit
LOS ANGELES -- On Tuesday, U.S. District Judge Philip Gutierrez openly expressed his dissatisfaction with the handling of a class-action lawsuit against the NFL by "Sunday Ticket" subscribers. The federal case, brought forward by frustrated fans and businesses, questions the league's pricing and distribution methods for out-of-market games.
The Plaintiffs' Case
The lawsuit covers 2.4 million residential subscribers and 48,000 businesses who paid for the "Sunday Ticket" package from the 2011 through 2022 seasons. The plaintiffs assert that the NFL violated antitrust laws by selling its package of Sunday games aired on CBS and Fox at inflated prices. Additionally, they argue that the league restricted competition by offering "Sunday Ticket" exclusively through a satellite provider.
Judge Gutierrez highlighted the frustrations of a Seattle Seahawks fan living in Los Angeles, unable to watch their favorite team without purchasing a comprehensive subscription for all Sunday afternoon out-of-market games. Despite this seemingly straightforward issue, the plaintiffs' attorneys have struggled to present a concise and compelling case.
The NFL contends that it has the right to sell "Sunday Ticket" under its antitrust exemption for broadcasting. However, the plaintiffs counter that this exemption only applies to over-the-air broadcasts and not to pay TV services. If the NFL is found liable, a jury could award up to $7 billion in damages, a figure that could triple to $21 billion due to the nature of antitrust cases.
Judge's Growing Frustrations
This week was not the first time Judge Gutierrez expressed his frustrations with the plaintiffs' side. On Monday, he admonished their attorneys for wasting time by repeatedly describing past testimony. Before Dallas Cowboys owner Jerry Jones resumed his testimony on Tuesday, Gutierrez voiced his doubts about the plaintiffs’ attorneys referencing Jones' 1995 lawsuit against the NFL, which challenged the league's licensing and sponsorship procedures.
Jones filed the 1994 lawsuit asserting his support for the league's television contract negotiations and revenue-sharing agreements, but contesting its licensing and sponsorship procedures. Ultimately, both sides settled out of court. When asked if teams should be able to sell their out-of-market television rights, Jones replied that they should not, as it "would undermine the free TV model we have now."
Broadcasting Rights and Market Issues
Retired CBS Sports chairman Sean McManus also took the stand, reiterating his opposition to "Sunday Ticket" and the NFL's Red Zone channel. McManus believes that "Sunday Ticket" infringes on the exclusivity rights CBS holds in local markets. During negotiations, CBS and Fox both requested that "Sunday Ticket" be sold as a premium package. DirecTV, not the NFL, set the prices during the period in question.
The NFL's television contracts with CBS and Fox include language that mandates "Sunday Ticket" to be marketed as a premium product for avid league fans, complementing the in-market game offerings. These contracts prohibit selling individual games on a pay-per-view basis. From 1994 through 2022, the NFL received a rights fee from DirecTV for the package. Starting last year, Google's YouTube TV acquired the rights for "Sunday Ticket" for the next seven seasons.
During a deposition, DirecTV marketing official Jamie Dyckes mentioned that MLB, the NBA, and the NHL have a suggested retail price for their out-of-market packages. Dyckes added that revenue sharing existed between these leagues and the carriers, as their packages were distributed across multiple platforms.
Looking Ahead
Testimony will continue on Thursday, with closing statements scheduled for early next week. Judge Gutierrez mentioned he might consider a rule that allows the court to determine if a jury lacks sufficient evidence to rule for a party in the case. The judge candidly admitted, "I'm struggling with the plaintiffs' case." His comments throughout the proceedings reflect mounting frustrations, stating, "The way you have tried this case is far from simple" and describing the case as "25 hours of depositions and gobbledygook."
As the case continues to unfold, all eyes will be on the courtroom, anticipating whether the plaintiffs' attorneys can present a convincing argument that aligns with the straightforward premise Judge Gutierrez initially outlined. With potentially billions of dollars at stake, the outcome could significantly impact the NFL's future handling of broadcasting rights and fan access to out-of-market games.