There are 4.8 billion reasons why other leagues are watching the fallout from 'Sunday Ticket' case

LOS ANGELES (AP) — After a U.S. District Court ruling against the NFL in the “Sunday Ticket” case, professional sports leagues have a $4.8 billion incentive to reassess their distribution of out-of-market broadcasts.

Christine Bartholomew, vice dean and professor at the University of Buffalo's School of Law, noted, “Other leagues will need to scrutinize their models to ensure they truly offer consumer choice. The jury found that the NFL suppressed consumer choice by steering them toward satellite TV, requiring the purchase of an entire package.”

A jury of five men and three women concluded that the NFL breached antitrust laws by offering Sunday afternoon games not broadcast locally on Fox or CBS exclusively through a premium subscription service with a single distributor. This arrangement kept the package cost high and limited subscriptions, preserving local ratings.

The class-action lawsuit included 2.4 million residential and 48,000 commercial subscribers in the U.S. who purchased the out-of-market games package on DirecTV from 2011 to 2022. The jury awarded $4.7 billion in damages to the residential class and $96 million to the commercial class. Given that federal antitrust laws allow for tripling damages, the NFL could owe $14.39 billion.

Major League Baseball, the National Basketball Association, and the National Hockey League also offer out-of-market packages but do so differently than the NFL, utilizing cable, satellite, and streaming services. MLB and NBA provide various options, including team-specific packages and a pay-by-game option. The NHL's digital package in the U.S. is part of an ESPN+ subscription. These packages are generally less expensive than the “NFL Sunday Ticket” despite longer seasons.

Ari Lightman, a professor at Carnegie Mellon University, emphasized the NFL’s need to align more with consumer preferences. “They need to understand different audiences, their interactions, and desires. Fans want personalized options and are turned off by excessive costs, which was a major issue with the 'Sunday Ticket' package.”

There was surprise that the NFL let the case proceed without settling, given its poor track record in antitrust cases. Historically, the league has settled most such disputes before trial. In 2010, the Supreme Court ruled against the NFL in American Needle's antitrust lawsuit regarding an exclusive deal with Reebok.

Judge Philip S. Gutierrez will address post-trial motions on July 31, including the NFL’s request for a ruling in its favor due to insufficient evidence from the plaintiffs. The NFL intends to appeal the verdict, which will go to the 9th Circuit Court of Appeals and possibly the Supreme Court. Any payment of damages or changes to the “Sunday Ticket” package will be delayed until appeals are resolved.

During closing arguments, plaintiffs presented a 2017 memo where the NFL considered placing games not shown on Fox or CBS on cable channels. It’s also possible that the NFL might settle the case later. Initially filed by the Mucky Duck sports bar in San Francisco in 2015 and dismissed in 2017, the 9th Circuit reinstated the lawsuit in 2019.

Irwin Kishner, co-chair of the Sports Law Group at Herrick, commented, “The plaintiffs' complex case strategy ultimately proved successful. The NFL’s approach of highlighting wealthy owners might not have been effective. Hindsight is 20/20.”