Recently, a jury in U.S. District Court delivered a groundbreaking decision, ordering the NFL to pay over $4.7 billion in damages. This ruling came after the jury found that the league had violated antitrust laws by distributing out-of-market Sunday afternoon games through a premium subscription service. The damages awarded included $4.7 billion for the residential class and $96 million for the commercial class. The potential total liability for the NFL could amount to $14.39 billion due to the tripling of damages under federal antitrust laws.
The lawsuit at the center of this legal battle covered 2.4 million residential subscribers and 48,000 businesses in the United States who had paid for the package of out-of-market games from 2011 through 2022 on DirecTV. The plaintiffs alleged that the league had engaged in anticompetitive behavior by selling its package of Sunday games at an inflated price and restricting competition by offering “Sunday Ticket” exclusively through a satellite provider.
NFL’s Response and Appeal
In response to the jury’s verdict, the NFL announced its plans to appeal the decision. The league expressed disappointment with the outcome and maintained its belief in the fan-friendly nature of its media distribution strategy. The NFL emphasized that all games are broadcast on free over-the-air television in the participating teams’ markets and nationally, along with additional options like RedZone, Sunday Ticket, and NFL+. The league vowed to contest the decision, asserting that the class action claims were baseless and lacking in merit.
If the verdict stands and the NFL is required to pay damages, each of the 32 teams could be on the hook for approximately $449.6 million. Despite the impending financial burden, the league is prepared to challenge the decision through post-trial motions and appeals to the Ninth Circuit Court. The potential changes to the “Sunday Ticket” package and the distribution of Sunday afternoon games are currently stayed pending the resolution of all appeals.
Significance for Professional Sports Leagues
This landmark case has significant implications not only for the NFL but also for other professional sports leagues that offer out-of-market packages. Major leagues like MLB, the NBA, and the NHL were closely monitoring the proceedings, as their own out-of-market distribution practices could come under scrutiny. A key difference highlighted in the case was that these leagues share revenue per subscriber rather than receiving an outright rights fee for their packages.
DirecTV had been the exclusive carrier of “Sunday Ticket” from its inception in 1994 until the 2022 season. However, the NFL recently entered into a new partnership with Google’s YouTube TV starting in the 2023 season, signaling a shift in the distribution of out-of-market games. The lawsuit, initially filed in 2015 by a San Francisco sports bar, faced dismissal in 2017 but was later reinstated by the 9th Circuit in 2019, setting the stage for the legal battle that unfolded in court.
The jury’s verdict against the NFL for violating antitrust laws and the subsequent order to pay billions in damages have far-reaching implications for the sports industry. The outcome of this legal battle could reshape how professional sports leagues distribute out-of-market games and could set a precedent for future antitrust challenges in the sports media landscape.
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