The Buc Zone

NFL 'Sunday Ticket' antitrust trial to kick off in Los Angeles
By Mike Scarcella
June 4, 20241:01 PM CDTUpdated 20 hours ago

June 4 (Reuters) - The National Football League and subscribers to its “Sunday Ticket” televised game package are headed to trial on Wednesday in a Los Angeles courtroom, where jurors will decide if the NFL broke antitrust law and should pay billions of dollars in damages.
The subscribers claim the NFL used agreements with broadcast partners to keep a stranglehold over distribution, allowing DirecTV to charge artificially higher prices as the sole Sunday Ticket distributor for out-of-market games.

The federal class action trial caps more than a decade of litigation over the Sunday broadcasts.
The plaintiffs — representing millions of home viewers and commercial subscribers like bars and restaurants — will ask a jury to find the NFL liable and award as much as $7 billion in damages. The NFL has denied any wrongdoing and called the damages amount “speculative.”
The plaintiffs’ attorneys and the NFL on Tuesday did not immediately respond to requests for comment. Only the NFL and its teams are on trial. Related claims against DirecTV have been paused pending arbitration.

The trial before U.S. District Judge Philip Gutierrez was set to begin with jury selection on Wednesday and could last several weeks.
Attorneys for the league are expected to argue that Sunday Ticket is a "premium" product that expands access to game telecasts rather than restricting it. NFL Commissioner Roger Goodell and other current and former league executives were named in pretrial filings as potential witnesses.

The residential and commercial classes are made up of DirecTV subscribers who bought NFL Sunday Ticket between June 2011 and February 2023.
If their lawyers persuade the jury to hold the NFL liable and award damages, a second phase of the trial would focus on a potential injunction to force changes to the Sunday Ticket distribution model.
Sunday Ticket is now distributed to residential subscribers through Google’s YouTube, which is not a defendant.

SPORTS
Column: An NFL trial kicks off today. Here’s how it could impact baseball’s streaming future


By Bill Shaikin
Staff Writer
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June 6, 2024 3 AM PT

The mission statement is clear. You might not agree with the commissioner of Major League Baseball on everything, but you probably would agree with him on this.

“If there is one thing I could wish for, more than anything else,” Rob Manfred told me two years ago, “it would be the ability to give our fans that frictionless experience of being able to watch what they want to watch, where they want to watch.”

No more blackouts. No more driving yourself crazy trying to figure out whether your favorite team is playing on ESPN or Fox or MLB Network or a local cable channel, or on Apple or Amazon or Netflix or Peacock or Roku or whatever other streaming service might throw a few dollars at major league owners.

Within the past year, amid the collapse of local cable sports channels around the country, Manfred and his lieutenants have been pretty clear about how they would like to accomplish this: An expansion of the league’s streaming service so that you could see every game, for every team, at the same place, for one price.

What if that turned out to be illegal?


The commissioner’s office should be paying close attention to a trial set to start Thursday in U.S. District Court in Los Angeles, in which the NFL is the primary defendant against allegations that its Sunday Ticket package violates antitrust law.

The Sunday Ticket package offers access to every out-of-market game, for every team, at the same place, for one price.


The issues at trial: Bar owners allege they have to pay too much for the package because the NFL lets only one provider carry it; and individual sports fans allege they have to pay too much for the package because they have to pay to watch every team, even if they only want to watch one team.

If the NFL wins, that would be one less challenge for Manfred to worry about, on a long list of challenges before MLB could get its all-in-one place, all-for-one-price streaming service up and running.

However, if the NFL loses, how MLB might have to adjust its plan to comply with the law could depend on why the jury reached its conclusions.


MLB declined to comment on the NFL case or its potential implications for baseball. But, if the NFL loses, the first thing MLB likely would say is, “We have an antitrust exemption, so this wouldn’t apply to us.”

Maybe, or maybe not.

“There was and is a current vulnerability to baseball’s antitrust exemption,” said Christopher Deubert, a Massachusetts-based expert in sports law and the former general counsel for the Major League Soccer team D.C. United.

“Whether the broadcast agreements would be covered by baseball’s antitrust exemption, I think, is uncertain.”

That federal antitrust exemption has survived for more than 100 years, but courts repeatedly have expressed concerns about it, and legislators regularly threaten to repeal it.


In 2021, Supreme Court Justice Brett M. Kavanagh all but invited a challenge. In an opinion about a college sports case, he pointedly wrote that the baseball exemption had not been extended to other sports and had been based on the notion that “exhibitions” of “base ball” did not involve interstate commerce “even though teams regularly crossed state lines (as they do today) to make money and enhance their commercial success.”

In 2022, in a case involving the contraction of four minor league teams, the Department of Justice urged a federal court to “define the exemption narrowly.” MLB and the four minor league teams settled the case this year, before the Supreme Court could decide whether to address the issue.

What would be an example of defining the exemption narrowly? This is what Manfred told me two years ago: “I can’t think of a place where the exemption is really meaningful, other than franchise relocation, right now.”

The NFL claims an antitrust exemption for broadcasting, citing a 1961 law that allows America’s four major sports leagues to sell their rights for “sponsored telecasting” as a league, rather than on a team-by-team basis. The plaintiffs challenging the NFL allege that “sponsored telecasting” means free, over-the-air commercial broadcasts, not pay-TV options such as satellite and streaming. If the jury agrees, that could imperil Manfred’s streaming vision.

And so could this: In a case against MLB and the NHL, one that was ultimately settled, U.S. District Judge Shira Scheindlin wrote in 2012: “Making all games available as part of a package, while it may increase output overall, does not, as a matter of law, eliminate the harm to competition wrought by preventing the individual teams from competing to sell their games outside their home territories in the first place.”

Your eyes are starting to glaze over. I get it. So here’s the point, because this is the point of antitrust law: On balance, would the courts consider Manfred’s plan good or bad for consumers?

There would be little argument that putting all the games on one streaming service certainly would be convenient for fans.

“Having to search around for where the game is every day is a pain in the butt,” said Penn State professor Steve Ross, who has written extensively about sports and antitrust law.

“I do it every single day. I go online and say, ‘Where is this game? Is it on MLB Network? Is it subject to blackout restrictions? Where do I go to watch it? ’ ”

But would the convenience of an exclusive home for baseball provide fans with a good deal?

“Would a complete takeover by Major League Baseball actually increase output by making this available everywhere at a decent price,” Ross said, “or reduce output because Major League Baseball would just be charging a boatload of money?

“That is a factual question that would be subject to antitrust challenge.”

The current MLB streaming package offers access to out-of-market games: $119.99 per year for games of all 30 teams, or $104.99 per year for the games of whatever one team you want to watch.

That may or may not be a better deal than letting each team sell its own streaming rights.

“Maybe the Yankees would charge $500 and the Twins would charge $20,” said Deubert, the expert in sports law.

It is impossible to know what baseball’s broadcast future might look like next year, let alone over the next decade. Bally Sports, home to the Angels and 11 other MLB teams, is mired in bankruptcy proceedings and might not exist next year.

It is impossible to know whether the Yankees and Twins might ever agree to pool streaming revenues, given how much more the rights to air Yankees games might be worth.

The Angels will be playing at Angel Stadium in Anaheim at least through the 2020 season.
SPORTS

Q&A: What the future may hold for Angels broadcasts with the uncertainty of Bally Sports
Feb. 15, 2023

Still, Deubert said, every major American sports league will follow the legal proceedings in Los Angeles very closely.

“If the NFL loses,” he said, “all the other leagues for sure will be forced to change their packages in some way.

“Major League Baseball would have some hard decisions to make in evaluating the degree to which they wanted to change their package or assert that it is exempted by the antitrust exemption. They could potentially be challenged on that, and then you would have a real live issue.”

For now, you have a real live quandary: Could a law intended to protect consumers somehow prevent Manfred from giving baseball fans what they say they want?

BY JOE REEDY
Updated 7:08 PM CDT, June 6, 2024
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LOS ANGELES (AP) — A class-action lawsuit filed by “Sunday Ticket” subscribers claiming the NFL broke antitrust laws got underway in federal court Thursday with the league’s attorney telling jurors that fans have a choice when it comes to watching games and the “Sunday Ticket” package is a premium product.

“The case is about choice. This is a valuable, premium product. Think about all the choices available to fans. We want as many people as possible to watch the free broadcasts,” said Beth Wilkinson, who is representing the NFL.

The lawsuit, which was filed in 2015 and has withstood numerous challenges, says the NFL broke antitrust law when it allowed DirecTV to exclusively sell the “Sunday Ticket” package of out-of-market Sunday afternoon games airing on CBS and Fox at what it says was an inflated price and restricted competition.

“NFL, Fox, CBS and DirecTV agreed to make an expensive toll road that very few people would be able to afford. Every single competitor in this scheme benefited,” Amanda Bonn, an attorney representing “Sunday Ticket” subscribers, said in her opening remarks Thursday.

DirecTV was the home of “NFL Sunday Ticket” from 1994 until 2022. YouTube will be in the second season this year of a seven-year deal after agreeing to the rights in December 2022.

The class-action case covers more than 2.45 million commercial and residential subscribers from 2012 to 2022 and seeks $7.1 billion in damages. Since damages are tripled under federal rules, the NFL could be liable for up to $21 billion if it loses.

The NFL contends “Sunday Ticket” is an add-on package for the league’s most-devoted and out-of-town fans, along with noting that all games for local teams are available on broadcast networks.

Steve Bornstein, a former NFL executive and the first president of NFL Network, said during afternoon testimony that “Sunday Ticket” was always set up so that it wouldn’t broadly hamper CBS and Fox’s local ratings.

Contracts between DirecTV and the NFL that were entered into evidence on Thursday showed language that “it will marketed and offered in a manner consistent as a high-quality premium subscription sports offering.”

“The NFL always wanted ‘Sunday Ticket’ to be an additional package. That is how it is was designed since its inception,” Bornstein said.

NFL Commissioner Roger Goodell and Dallas Cowboys owner Jerry Jones, a longtime member of the league’s broadcast committee, are expected to testify in a trial that could last up to three weeks.

The trial could bring to light how much YouTube is paying the NFL for “Sunday Ticket” and if it is making money. There also will be documents filed that would show how much networks spend to produce an NFL game.

Bonn showed a 2020 term sheet by Fox Sports demanding the NFL ensure “Sunday Ticket” would be priced above $293.96 per season on streaming platforms in the 11-year rights deal it signed with the NFL in 2021 and that began in 2023. That was the price for the 2020 season.

When the “Sunday Ticket” contract was up for bid in 2022, ESPN wanted to offer the package on its streaming service for $70 per season along with offering a team-by-team product, according to an email shown by Bonn.

This is one of the rare occasions where the NFL has had a high-profile case go to court where league financial matters would become public without settling. In 2021, it settled with St. Louis, St. Louis County and the St. Louis Regional Convention and Sports Complex Authority for $790 million over the relocation of the Rams to Los Angeles.

The “Sunday Ticket” case attracted a large crowd of attorneys and media members to the courtroom of Judge Philip S. Gutierrez. An overflow room was eventually set up 10 minutes into opening statements.

The ongoing NFL Sunday Ticket trial in Los Angeles may be drawing closer to a conclusion entering its fourth week, as the league continues its efforts to fend off an antitrust lawsuit that could ultimately cost $21 billion and, perhaps more important, put a major wrench in a longtime, lucrative media-rights strategy.

Closing statements could come this week, with the last scheduled witness, an economist from Stanford University, set to finish his testimony Monday. Other witnesses who have taken the stand include NFL commissioner Roger Goodell (above) and Cowboys owner Jerry Jones. Patriots owner Robert Kraft was among those to give a deposition.

Trial Twists and Turns
For those getting caught up on the situation, here are some of the major storylines that Front Office Sports has been following:

The NFL wouldn’t let ESPN, which wanted to bid for Sunday Ticket, drastically reduce the price of the package.

Goodell took a shot at the quality of NFL Network game broadcasts.

The league entered the trial with an uphill battle.

Testimony from key figures like Goodell and Jones showed the gravity of the situation.

U.S. District Judge Philip Gutierrez, who is overseeing the case, last week said he was upset with how the plaintiffs have handled the lawsuit, which in his mind has become too complicated.

“This case has gone in a direction it shouldn’t have gone,” Gutierrez said. Should the case go to a jury verdict, and the NFL loses, the league will still be able to appeal all the way up to the Supreme Court, if it chooses to do so.

Where Did This Begin?
The Sunday Ticket lawsuit was originally brought forward by a pub in San Francisco called Mucky Duck in 2015. The bar felt it was being taken advantage of by the league when purchasing the out-of-market package of games. But its owner, Jason Baker, has not testified in the case. Now, it is a class action suit, which can be viewed here, and includes many other restaurant owners and individual citizens as plaintiffs.