NFL Hit With $4.8 billion Verdict In NFL Sunday Ticket Antitrust Case

Legal Issues

from the hello-you've-been-ripped-off-for-decades dept

On any given Sunday there’s simply no shortage of U.S. antitrust violations, where some giant predatory corporation leverages its consolidated power to derail price competition and harm consumers.

But because U.S. antitrust enforcement is a feckless and inconsistent mess, in most instances (see: telecom), a company can engage in these kinds of practices for decades and see no meaningful repercussions whatsoever. And most of the time, the government’s rhetoric on antitrust is largely performative (see: the GOP’s recent successful effort to gain political leverage on tech giants).

When companies are occasionally held accountable via regulators and the courts, the targets can sometimes seem scattershot. Take this latest court ruling against the NFL, for example, in which the league has been ordered to pay $4.7 billion in class action penalties over allegations that it artificially drove up the cost of its NFL Sunday ticket out of market streaming service.

The service, historically locked down under one provider (most recently DirecTV/AT&T), has traditionally been prohibitively expensive in comparison to other league streaming services around the world. One reason for that, the class action lawsuit (pdf) alleged, is that the league violated antitrust laws by providing exclusive access to out of market games to a single company (DirecTV).

The NFL had tried to claim that NFL Sunday Ticket was exempted from antitrust protections governing broadcasting, but the class action successfully argued those exemptions only cover over the air broadcasts, not satellite TV or direct to consumer streaming services.

The class action covered 2.4 million residential subscribers and 48,000 businesses in the United States who paid the package between 2011 and 2020. For a while, users who wanted NFL Sunday ticket had to subscribe not just to the package, but to DirecTV as well, resulting in annoyed consumers and lawsuits a decade ago by bars and other businesses complaining they were being ripped off.

The NFL’s deal with DirecTV ended in 2022 after AT&T, imploding and debt-riddled from its pointless and bungled merger with Time Warner, could no longer afford the high price of exclusivity. Google now owns the exclusive, seven-year rights (at a rumored $2 billion every year) to NFL Sunday Ticket starting with the 2023 season.

Damages can technically be tripled under antitrust laws for this lasting ruling, so the NFL could technically be on the hook for as much as $14.39 billion. The league will most certainly file an appeal with the 9th Circuit Court of Appeals and potentially the corporate-friendly right wing Supreme Court.

If the decision holds (and that’s certainly never certain in a corporate-friendly U.S. legal environment) it could potentially force down the price of NFL game streaming access. NBA League Pass and MLB.TV are significantly lower cost, in part because they’re delivered to consumers across a litany of different services (YouTube, Amazon Prime, league-owned apps). But even those options may be expanded:

“It’s going to require other leagues to take a close look at their model and make sure that the means by which they’re providing consumer choice really does ensure true choice,” said Christine Bartholomew, vice dean and professor in the University of Buffalo’s School of Law. “What happened here, at least according to the jury, was that the NFL had really suppressed consumer choice. Not only did they steer the consumers towards using satellite TV, it meant that they had to buy the whole package.”

Class actions are often viewed as utterly worthless lawyer-enrichment efforts, but occasionally they do nudge things in the right direction absent meaningful competition or regulators with working vertebrae.

Filed Under: antitrust, antitrust reform, class action, football, nfl sunday ticket, streaming, video
Companies: nfl