The NFL's Legal Battle Over "Sunday Ticket": A Complex Case Unfolds
LOS ANGELES -- The class-action lawsuit against the NFL, brought forward by "Sunday Ticket" subscribers, took a critical turn on Tuesday as the presiding federal judge voiced his frustrations with the plaintiffs' attorneys. This complex legal battle revolves around the alleged anti-competitive practices of the NFL, affecting millions of football fans and thousands of businesses.
Judge's Frustration
Before Dallas Cowboys owner Jerry Jones resumed his testimony, U.S. District Judge Philip Gutierrez highlighted the straightforward nature of the case. He empathized with the frustration of a Seattle Seahawks fan living in Los Angeles, who is unable to watch their favorite team without purchasing a subscription for all Sunday afternoon out-of-market games.
The lawsuit, covering 2.4 million residential subscribers and 48,000 businesses, claims the NFL violated antitrust laws by selling its package of Sunday games aired on CBS and Fox at an inflated price. Moreover, the plaintiffs argue that the league restricted competition by offering "Sunday Ticket" exclusively through a satellite provider.
NFL’s Defense
The NFL firmly defends its right to sell "Sunday Ticket" under its antitrust exemption for broadcasting. The plaintiffs counter that this exemption only applies to over-the-air broadcasts and not pay TV. Should the NFL be found liable, the jury could award up to $7 billion in damages, a figure that could triple to $21 billion due to the nature of antitrust cases.
This is not the first time Judge Gutierrez has expressed dissatisfaction with the plaintiffs. On Monday, he chastised their attorneys for repeatedly rehashing past testimony, which he deemed inefficient and unnecessary. The Judge also expressed doubts about the relevance of a 1995 lawsuit filed by Jerry Jones against the NFL, which challenged the league's licensing and sponsorship procedures.
Insights from Jerry Jones and Sean McManus
Jerry Jones filed his 1994 lawsuit contesting the NFL’s licensing and sponsorship procedures, despite supporting the league’s television contracts and revenue-sharing models. On Tuesday, Jones testified that teams should not be allowed to sell their out-of-market television rights as it "would undermine the free TV model we have now."
Sean McManus, retired CBS Sports chairman, took the stand to voice his long-standing opposition to "Sunday Ticket" and the NFL’s Red Zone channel. McManus believes that "Sunday Ticket" infringes on CBS's exclusivity in local markets. He revealed that both CBS and Fox requested during negotiations that "Sunday Ticket" be sold as a premium package. Notably, DirecTV, not the NFL, set the prices during the class-action period.
Contractual Language and Market Practices
The NFL’s contracts with CBS and Fox include language stipulating that "resale packages (Sunday Ticket) are to be marketed as premium products for avid league fans that satisfy complementary demand to the offering of in-market games." Additionally, 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. Last year, Google's YouTube TV acquired "Sunday Ticket" rights for seven seasons.
During a deposition, DirecTV marketing official Jamie Dyckes mentioned that MLB, the NBA, and the NHL had suggested retail prices for their out-of-market packages. Dyckes added that there was revenue sharing between the leagues and the carriers, as their packages were distributed across multiple platforms.
Looking Ahead
Testimony is set to continue on Thursday, with closing statements scheduled for early next week. Judge Gutierrez has hinted at the possibility of invoking a rule that allows the court to find that a jury lacks sufficient evidence to rule in favor of a party in a case.
Quotes from the Bench
Judge Gutierrez candidly admitted, "I'm struggling with the plaintiffs' case." Throughout the proceedings, his comments have underscored his mounting frustrations, stating, "The way you have tried this case is far from simple." He also remarked, "This case has turned into 25 hours of depositions and gobbledygook," adding, "This case has gone in a direction it shouldn't have gone."
As the case continues, all eyes will remain on the courtroom, anticipating whether the plaintiffs' attorneys can present a compelling argument that aligns with the straightforward premise Judge Gutierrez initially outlined.