The NFL encountered a significant legal setback on Thursday when a federal judge ruled against the league in a long-standing class-action lawsuit. The decision mandates the NFL to pay a staggering $4.7 billion in residential class damages, in addition to $96 million for commercial class damages.
A Decade in the Making
This landmark ruling concludes nearly a decade of legal battles, stemming from a class-action lawsuit filed in 2015. The lawsuit centers on the NFL's "Sunday Ticket" package, a service launched in 1994 that allowed out-of-market fans to watch their home teams. Subscribers of this service between 2012 and 2022, totaling almost 2.5 million customers, are at the heart of the legal action.
The core of the lawsuit questions whether the NFL violated antitrust laws with its exclusive distribution arrangement for "Sunday Ticket." Originally held by DirecTV from its inception until 2022, the rights have since been transferred to YouTube TV. The plaintiffs initially sought up to $7 billion in damages, arguing that the package operated as an "expensive toll road that very few people would be able to afford," in the words of attorney Amanda Bonn. Bonn further stated, "Every single competitor in this scheme benefited."
Legal and Financial Ramifications
In response to the verdict, the NFL expressed its discontent. "We are disappointed with the jury's verdict today in the NFL Sunday Ticket class action lawsuit," said the league in an official statement. "We continue to believe that our media distribution strategy...is by far the most fan-friendly distribution model in all of sports and entertainment. We will certainly contest this decision as we believe that the class action claims in this case are baseless and without merit."
The league will indeed appeal the decision to the 9th Circuit, signaling that the legal battle may continue for some time. Pending this appeal, there could be broader implications for exclusive sports broadcasting packages, potentially leading to greater scrutiny and regulatory oversight.
Implications for Fans and Competitors
The "Sunday Ticket" package has always been designed as an additional, premium product, according to Steve Bornstein, who was involved with its early distribution. "The NFL always wanted 'Sunday Ticket' to be an additional package. That is how it was designed since its inception," Bornstein asserted, suggesting that the league's intentions were always transparent.
There are, however, differing perspectives on the matter. Beth Wilkinson, representing the NFL, stressed the variety of viewing options available to fans. "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," Wilkinson remarked, defending the league's strategy.
The Road Ahead
This is not the first significant financial blow the NFL has faced in recent years. In 2021, the league settled with the city of St. Louis and several other entities for $790 million over the relocation of the Rams. The current ruling adds to the league's financial challenges and may result in increased scrutiny over its business practices.
Post-trial motions, including a possible overturning of the verdict, are set to be addressed in a hearing scheduled for July 31. Until then, the NFL's fight is far from over as it navigates these choppy legal waters.