NFL Sunday Ticket Under Judicial Review

 

By: Justin Brascher

The National Football League (NFL) is the most watched sports league in the United States. For example, in 2019 roughly three quarters of the top 100 most-watched broadcasts in America were NFL games. Because of this, the NFL maintains very tight control over its television rights and makes billions every year in Television rights deals with the major networks. However, some of that control may be taken away from the NFL and placed in the hands of the individual teams themselves, depending on the result of a federal suit that is currently being appeal to the Supreme Court.

Since the NFL often has as many as 9 or 10 games going on at any given time, not every game is shown to a national audience. A game between The Seattle Seahawks and the Dallas Cowboys for example, would only be guaranteed to be shown in the Greater Seattle and Dallas media markets. It is up to either CBS or Fox, whomever is broadcasting the game, to determine what other parts of the country the game will be shown in. The NFL is well aware of this. That is why in 1995, the NFL partnered with DirectTV to provide the “NFL Sunday Ticket” package. For one monthly rate paid to DirectTV, an individual can watch all of the games that occur on a Sunday afternoon in the NFL, not just the one or two games carried on CBS and Fox.

However, for many fans who don’t live in the market of their favorite team, they would prefer to just pay to watch their favorite team play on Sundays, without having to pay for all of the other games. In 2015, a class action lawsuit was filed alleging this injury. The suit filed against the NFL and AT&T (who owns DirectTV) alleged the interlocking agreements for Sunday Ticket illegally suppressed the availability of choices to consumers in consuming league games. In 2017, the DirecTV case was dismissed by the District Court, but on appeal the Ninth Circuit reversed the dismissal in 2019, allowing the original lawsuit to proceed. AT&T then asked for a stay so that they could appeal the decision to the Supreme Court.

It is expected that the Supreme Court will decide within the next couple of months whether to hear the case. If it decides not to grant a writ of certiorari, then the case will go back down to the District Court for further fact finding.

The case has generated a large amount of publicity among news outlets because it has the potential to change the way the NFL, the biggest sports league in America, does its TV rights deals. Due to an explicit exception in the Sherman Antitrust Act that came from the Sports Broadcasting Act of 1961, the NFL has monopolistic control over the TV rights of its games. However, the case Shaw v. Dallas Cowboys ruled that the exception was limited to over-the-air broadcast television specifically supported by advertising, and that the exception only applied to broadcasts that were otherwise free to the general public. According to the plaintiffs in this suit, the NFL’s exclusive deal with DirectTV for non-over the air broadcasting establishes an illegal monopoly on these TV rights, in violation of the Sherman Antitrust Act. The plaintiffs allege that if the monopoly no longer existed, then teams themselves could potentially negotiate their own deals for the broadcasts of their games that were not part of the traditional over-the-air rights package. This would grant the NFL teams the ability to negotiate local deals for streaming their games, in a similar way to how Major League baseball and National Basketball Association teams already negotiate their local TV deals separate from the league at large. That is particularly interesting given how the NFL has recently expanded into offering the streaming rights to games to companies like Amazon and Verizon, using the same monopolistic philosophy that they used for their over-the-air rights deals.

The NFL and AT&T defend themselves, stating that because every game is supplied for free to some market (such as Dallas and Seattle in our previous hypothetical), then that is sufficient to avoid a monopoly of the market, and the NFL may do what it pleases with the remaining rights. The Ninth Circuit found this argument unconvincing. Particularly, as part of its decision to overturn the District Court dismissal the Ninth Circuit stated:

“In the absence of a legal requirement that the NFL teams, NFL, and broadcasters coordinate in filming and broadcasting live games, the Los Angeles Rams (for instance) could contract for their own telecast of Rams games and then register the telecasts for those games with the Rams (and perhaps the team against whom they are playing). Only the agreements that are the subject of plaintiffs’ antitrust action prevent such independent actions.”

This has the most potential to alter how fans watch NFL games, and all nationally broadcast sports events for that matter.  If this suit succeeds, it could mean that the Seahawks could not only have their own deal, where a person could pay the team specifically for the rights to stream just their game every Sunday, but they could also produce their own broadcast of the game, separate and apart from the NFL-approved broadcast of the game.

Whether this will actually occur, no one can really know. This suit was originally filed in 2015, and a decision from the Supreme Court is bound to take time. Even then, any decision from the Supreme Court other than affirming the District Court’s dismissal will send the case back to the District Court for further factfinding, and more prolonged litigation. In the meantime, this could be a potential fumble the NFL must consider when negotiating its new TV rights deal in 2022.

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