NFL Antitrust Suit Revived

Football fans may be a step closer to expanded access to NFL games without having to buy bundled game packages.

The 9th US Circuit Court of Appeals Tuesday reinstated an antitrust case brought by subscribers to DirectTV’s NFL Sunday Ticket, a bundled package of NFL games available only to subscribers of DirectTV’s satellite service.

This is good news for those Sunday football fans who may live far from their favorite team and are thus relegated, by geography, to seeing games only if they buy the DirectTV’s package of games.

The antitrust lawsuit claimed the arrangement hurt NFL fans by eliminating competition in the market for live telecasts of NFL games. The fans in the case say individual teams would create multiple telecasts of each game and would compete against one another by distributing telecasts of their games through various cable, satellite, and internet channels.

The trial judge dismissed the suit but the appeals court panel, with a partial dissent, reinstated the case saying they have stated a claim for Sherman Antitrust Act violation that should be heard.

The NFL argues the plaintiffs “have failed to allege that the defendants had the specific intent to monopolize a relevant market,” the majority states. “We reject this argument,” wrote Judge Sandra Ikuta. The fans have “adequately alleged that defendants have market power in the market for professional football telecasts” and that the TV agreements are designed to maintain that market power,” she said.

She was joined by visiting Judge George Steeh of Michigan and a partial dissent by Judge NR Smith.

NFL Broadcast History

Back in the 1960s the NFL’s contract with CBS to pool NFL teams’ television rights and sell them to CBS. The action was found to be anticompetitive then, but rather than fight the injunction barring the deal, the NFL went to Congress, which passed the Sports Broadcasting Act. It was intended to create parity between the NFL and American Football League (AFL).

It exempted from antitrust law the professional team sports that sell rights to telecast games. For 25 years the NFL sold collective telecast rights to free, over-the-air TV. But as technology changed with cable and internet access, the NFL entered new deals. The first was a 1987 cable deal for Sunday games to ESPN.

Currently, all 32 NFL teams, which are independently owned, pool their telecasting rights and give NFL control over exercise of those rights. This has resulted in limits on viewing “out-of-market games.”

A Seattle Seahawks fan living in Los Angeles must buy the DirectTV package to see the games in the LA area, while a Seahawks fan living in Seattle sees them for free, the court said. In 2015, the Sunday ticket package was $252 a year for residential customers.

Case: In re NFL Sunday Ticket Antitrust Litigation, No. 17-56119

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