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Football players aren’t the only ones preparing for kickoff at the start of this 2024-2025 season. Following a four-week trial of a class action lawsuit, on June 27, 2024, a jury in the U.S. District Court awarded the plaintiffs close to $14.4 billion in damages.[1] The verdict agreed that the National Football League (“NFL”), “rather [than] compete in the multibillion-dollar football broadcasting market, joined forces to restrict supply and raise prices.”[2]
Since 1994, DirecTV was the NFL’s exclusive distribution partner for Sunday Tickets.[3] DirecTV offered a programming package targeted to fans interested in watching regular season NFL games not broadcast by local TV networks (“out-of-market” games), due to the networks’ assumption of lack of viewer interest.[4] However, in December 2022, Google disrupted DirecTV’s almost 30-yearlong hold on the Sunday Ticket by making a deal with the NFL to sell Sunday Tickets via YouTube.[5] Today, the Sunday Ticket includes all out-of-market Sunday regular season NFL games broadcast on FOX and CBS.[6]
The lawsuit, initially filed by a group known as The Mucky Duck in 2015, was dismissed in 2017.[7] In 2019, the Ninth Circuit reinstated the case, and in 2023, U.S. District Judge Philip S. Gutierrez allowed the case to move forward as a class action.[8] Defendants include the NFL and each team within the league.[9] The plaintiffs claim the NFL violated the Sherman Act by selling Sunday Tickets at an inflated price.[10] As a result, the verdict will affect the proposed classes of 48,000 businesses and 2.4 million residential subscribers in the United States who paid for the Sunday Ticket on DirecTV from 2011 through 2022.[11]
For over a century, the government has scrutinized numerous professional sports leagues including the NFL for their conduct under Sections 1 and 2 of the Sherman Antitrust Act.[12] However, the Supreme Court of the United States ruled that Major League Baseball (“MLB”) was exempt from the Sherman Act and made it clear that baseball, America’s favorite sport, plays by different rules.[13]
Conversely, in 2009, the Supreme Court held that NFL teams cannot join forces to restrict products and raise profits.[14] Instead, each team “is a substantial, independently owned, and independently managed business,” competing with their rivals on and off the field.[15] This holding is consistent with the controlling Sherman Act, which outlaws “every contract, combination, or conspiracy in restraint of trade,’ and any ‘monopolization, attempted monopolization, or conspiracy or combination to monopolize.’”[16]
Nevertheless, the NFL claims the Sunday Ticket was exempt from antitrust laws because of a statute passed by Congress in 1961 that allows the league to make broadcasting agreements on behalf of participating teams with networks.[17] However, plaintiffs claim the exemption covers only subscription-based services and not over-the-air broadcast television.[18]
In 1961, Congress passed the Sports Broadcasting Act (“SBA”), creating an antitrust exemption for professional sports teams when they join forces to sell their television rights as a single package to free over-the-air cable channels.[19] The result of the SBA has been a fundamental aspect of the league’s business model, allowing the teams to package some or, like the NFL, all of their television rights and sell them for billions of dollars to the major broadcasters (CBS, ABC, NBC and FOX).[20]
More recently, Judge Gutierrez reached a conclusion that significantly affects the June 2024 award of $14.4 billion in damages. On August 1, 2024, Judge Gutierrez granted the NFL’s motion for judgment as a matter of law and motion to vacate the award, on grounds that plaintiffs’ experts showed misleading evidence to the jury.[21] He further cited that without the experts’ testimonies, “no reasonable jury could have found class-wide injury or damages.”[22] Accordingly, Judge Gutierrez concluded the argument that Sunday Ticket subscribers should be paying lower prices to watch games was “clearly not supported by the evidence.”[23]
On August 20, 2024, Judge Gutierrez finalized the August 1 order that tossed the jury award and made a final judgement in favor of the NFL on all claims.[24] In response to this final judgment, plaintiffs did not waste any time and filed a notice of appeal ten days later.
If plaintiffs prevail in the lawsuit, broadcasting rights may be radically altered as the NFL may be forbidden from offering pay services that limit out-of-market games.[25] Further, the league or each team may begin offering packages to individual markets.[26] This change would benefit fans who want to pay only for the games they watch instead of a bundle of games that likely costs more.[27] A possible solution may be Congress stepping in to expand limitations the SBA placed on the NFL.[28]
Nevertheless, this may not be the last time the Sunday Ticket is up for debate. According to Loyola Law School Adjunct Professor Brandon Leopoldus, “Technology evolves and speeds up, this case possibly being settled doesn’t mean we’re not going to fight the same battle ten years from now.”[29] The game may not be over just yet.
[1] The Associated Press, Jury Orders NFL to Pay Billions in ‘Sunday Ticket’ Case for Violating Antitrust Laws, NPR (June 28, 2024, 12:00 AM), https://www.npr.org/2024/06/27/g-s1-6943/nfl-pay-billions-sunday-ticket-antitrust; Jeff Cohen, Antitrust Blitz: NFL’s Sunday Ticket Ruling Could Have Potentially Broad Implication for All Professional Sports, JD Supra (July 11, 2024), https://www.jdsupra.com/legalnews/antitrust-blitz-nfl-s-sunday-ticket-5461768.
[2] The Associated Press, supra note 1.
[3] Cohen, supra note 1.
[4] Todd Spangler, NFL Socked with $4.7 Billion-Plus Verdict in Sunday Ticket Antitrust Case, League to Appeal Decision, Variety (July 27, 2024, 2:07 PM), https://variety.com/2024/biz/news/nfl-4-7-billion-verdict-sunday-ticket-case-directv-1236055862; Mike Snider, NFL Sunday Ticket: League Worries Football Fans Are Confused On DirecTV, YouTube Situation, USA TODAY (last updated Sept. 17, 2023), https://www.usatoday.com/story/sports/nfl/2023/09/08/nfl-sunday-ticket-youtube-directv-confusion/70786321007.
[5] Id.
[6] Id.
[7] The Associated Press, supra note 1.
[8] Id.
[9] In re NFL “Sunday Ticket” Antitrust Litig.,No. ML 15-02668 PSG (SKX), 2024 WL 3628118, at *1 n.1 (C.D. Cal. Aug. 1, 2024).
[10] Id.
[11] Joe Reedy, NFL is Liable for $4,707,259,944.64 in ‘Sunday Ticket’ Case, The Associated Press (last updated July 3, 2024), https://apnews.com/article/nfl-sunday-ticket-lawsuit-damages-6d1c6fbacadb5c667b410785ce888fd3.
[12] Cohen, supra note 1.
[13]Id.; see Fed. Baseball Club, Inc. v. Nat’l League of Pro. Baseball Clubs, 259 U.S. 200, 208-09 (1922) (making clear baseball is different than other sports by unanimously ruling MLB is outside the scope of the Sports Broadcasting Act and exempt from the Sherman Act); Radovich v. NFL, 352 U.S. 445, 452 (1957) (“Federal Baseball held the business of baseball [is] outside the scope of the [Sports Broadcasting] Act. No other business claiming the coverage of those cases has such an adjudication.”).
[14] Id.
[15] Id.
[16] Federal Trade Commission, The Antitrust Laws, FTC https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/antitrust-laws.
[17] Spangler, supra note 3.
[18] Id.
[19] Chris Deubert, What the NFL’s Sunday Ticket Verdict Might Mean For Fans, Forbes (June 28, 2024, 10:25 AM), https://www.forbes.com/sites/chrisdeubert/2024/06/28/what-the-nfls-sunday-ticket-verdict-might-mean-for-fans/.
[20] Id.
[21] David Steele, Off The Bench: Sunday Ticket Twist, Dartmouth-NLRB Clash, Law360 (Aug. 23, 2024), https://www.law360.com/articles/1873000/off-the-bench-sunday-ticket-twist-dartmouth-nlrb-clash.
[22] In re NFL “Sunday Ticket” Antitrust Litig., 2024 WL 3628118, at *31.
[23] Bernie Pazanowski, NFL’s Win in $4.7 Billion Sunday Ticket Antitrust Suit Finalized, Bloomberg Law (Aug. 21, 2024, 7:09 AM), https://www.bloomberglaw.com/product/blaw/bloomberglawnews/bloomberg-law-news/X48CM9HC000000#jcite.
[24] David Rumsey & A.J. Perez, Court Sides with The NFL Again In $14 Billion Sunday Ticket Lawsuit, Front Office Sports (last updated Aug. 20, 2024, 4:25 PM), https://frontofficesports.com/nfl-sunday-ticket-lawsuit-likely-to-keep-playing-out-this-season/.
[25] Cohen, supra note 1.
[26] Id.
[27] Id.
[28] Id.
[29] Interview with Brandon Leopoldus, Adjunct Law Professor, Loyola Law School (Sept. 25, 2024).