Class-Action Lawsuit Against NFL Faces Scrutiny
The ongoing class-action lawsuit against the NFL, filed by "Sunday Ticket" subscribers, has hit a rocky path under the intense scrutiny of federal judge Philip Gutierrez. The judge's frustrations became evident on Tuesday, just before Dallas Cowboys owner Jerry Jones took the stand for a second consecutive day of testimony.
Judge's Frustration with Plaintiffs
Judge Gutierrez expressed his dissatisfaction with the way plaintiffs' attorneys are presenting their case. Despite the straightforward premise of the lawsuit, which he outlined as easy to understand, the arguments have been muddled and repetitive.
"I'm struggling with the plaintiffs' case," Gutierrez candidly admitted. He further elaborated, "The way you have tried this case is far from simple."
The lawsuit, which covers 2.4 million residential subscribers and 48,000 businesses, claims the NFL broke antitrust laws by selling its package of Sunday games aired on CBS and Fox at inflated prices. Additionally, subscribers argue that the NFL restricted competition by offering "Sunday Ticket" only through a satellite provider.
Antitrust Allegations and NFL’s Stance
The plaintiffs assert that the antitrust exemption the NFL enjoys for broadcasting applies only to over-the-air broadcasts and not to pay TV. Should the NFL be found liable, the potential damages could significantly impact the league. A jury could award up to $7 billion in damages, a figure that could balloon to $21 billion due to the possibility of triple damages in antitrust cases.
On the other hand, the NFL firmly maintains that it has the right to sell "Sunday Ticket" under its existing antitrust exemption for broadcasting. As the trial proceeds, it remains to be seen whether the plaintiffs' attorneys can clearly demonstrate the merits of their case.
Testimonies of Key Figures
In his testimony, Jerry Jones touched upon his 1994 lawsuit against the NFL, where he challenged the league's licensing and sponsorship procedures while supporting its model for negotiating television contracts and revenue-sharing agreements. Reiterating his stance, Jones remarked that teams should not be able to sell their out-of-market television rights as it "would undermine the free TV model we have now."
Retired CBS Sports chairman Sean McManus also testified, reiterating his opposition to "Sunday Ticket" and the NFL's Red Zone channel. McManus argued that "Sunday Ticket" infringes on the exclusivity CBS enjoys in local markets. During negotiations, both CBS and Fox requested that "Sunday Ticket" be marketed as a premium package.
Financial Arrangements and Agreements
DirecTV, which had been responsible for setting the prices for "Sunday Ticket" during the class-action period, paid the NFL a rights fee for the package from 1994 through 2022. Language in the NFL's contracts with CBS and Fox explicitly states that resale packages, like "Sunday Ticket," should be marketed as premium products for avid fans to complement the offering of in-market games. It also prohibits selling individual games on a pay-per-view basis.
Starting last year, Google's YouTube TV acquired the "Sunday Ticket" rights for seven seasons, marking a significant shift in how the package is offered to consumers.
During a deposition, Jamie Dyckes, a DirecTV marketing official, highlighted that other major leagues like MLB, the NBA, and the NHL had suggested retail prices for their out-of-market packages and engaged in revenue sharing between the leagues and carriers, as their packages were distributed across multiple platforms.
Looking Forward
As the testimony continues on Thursday, the plaintiffs' attorneys will need to refine their arguments and present a more compelling case that aligns with the straightforward premise initially outlined by Judge Gutierrez. Despite his mounting frustrations, Gutierrez noted he would consider invoking a rule allowing the court to find that a jury lacks sufficient evidence to rule for a party in a case, should the need arise.
"This case has turned into 25 hours of depositions and gobbledygook," Gutierrez remarked, adding, "This case has gone in a direction it shouldn't have gone."
With closing statements scheduled for early next week, all eyes remain on the courtroom as the legal battle over "Sunday Ticket" and the NFL's alleged antitrust violations continues to unfold.