NFL seeks U.S. Supreme Court review of case aimed at Sunday Ticket
If Baltimore Ravens fans living in Miami want to see a live telecast of their team's game on any given Sunday, the only option is to buy an entire season of DirecTV's NFL Sunday Ticket for $293. The same is true for Eagles fans in Los Angeles, Patriots fans in Chicago, or any NFL fan rooting for a faraway team.
In a world of regional sports networks, satellite television providers and a multitude of streaming platforms, should that be legal? Or would fans be better served if each team, rather than the NFL, decided how to make live telecasts of its games available to the public?
These are among the questions arising from a long-running class-action case that lawyers for the NFL and DirecTV have asked the U.S. Supreme Court to review. A decision on whether the high court will take up the case is expected as early as this week.
The litigation could eventually change how out-of-market telecasts are made available to NFL fans, although any final ruling forcing the league's hand is likely years away.
The case does not affect NFL games broadcast on networks that are available over the air -- including Fox, NBC and CBS -- which enjoy a federal antitrust exemption. But it threatens to upend the Sunday Ticket model, and it could also have implications for other NFL games aired exclusively on pay satellite or cable television networks such as ESPN and the NFL Network.
"If the NFL were to lose, I don't think it is necessarily so dramatic in terms of the way you will watch NFL on satellite or cable," said Stefan Szymanski, a sports economist at the University of Michigan. "But it should be good news for consumers because they should be paying less" for out-of-market games.
The legal battle is unfolding even as the Sunday Ticket package, which premiered in 1994, could be in for big changes brought about by evolving technology and consumer tastes. With many fans cutting their cable and satellite TV subscriptions in favor of streaming platforms, NFL commissioner Roger Goodell has hinted at breaking up the exclusive, $1.5 billion-a-year Sunday Ticket deal with DirecTV, which expires after the 2022 regular season. "We are looking to see how we can change the delivery," Goodell told Bloomberg in an interview last year. "We want it delivered on several different platforms." An NFL spokesperson declined to comment on the case when contacted by ESPN this week.
NBC News has reported that the league has shopped the package to a variety of streaming platforms, while DirecTV, which is owned by AT&T, has been increasingly wary about the cost of deal. AT&T's chief operating officer told The Wall Street Journal in September that the value derived from the package "has peaked and that a renewal -- especially if it comes with a higher price tag -- will be hard to justify at a time when consumers are canceling pay TV connections." It is also possible for the NFL to follow the lead of other professional sports leagues, including the National Hockey League and Major League Baseball, and offer piecemeal direct-to-consumer viewing options.
In their petition for Supreme Court review, lawyers for the NFL and DirecTV argued that the 9th U.S. Circuit Court of Appeals erred last August when it reopened a class-action suit alleging that the Sunday Ticket package requires consumers to "pay more for games than they want" and violates federal antitrust statutes.
The law bars competing businesses from working together in a way that limits choices and raises prices for consumers. The appeals court ruling reversed a lower court dismissal of a case brought in 2015 by a group of bars, restaurants and individual fans who bought the Sunday Ticket.
The basic Sunday Ticket package is advertised to individuals at a cost of $293 a season, though the 9th Circuit's opinion said that in 2015, restaurants and bars were charged between $2,300 and $120,000 per season, depending on their capacity. Sunday Ticket subscriptions can be purchased only as a bundle, meaning fans have to buy every game, even if they are interested in watching only one team.
The lawyers who brought the initial case alleged that Sunday Ticket violates federal antitrust provisions because it prevents NFL teams from competing against one another for television viewers of out-of-market games. Under the existing broadcast model, the NFL owns the rights to the games of its 32 teams. The league allows games to be aired in home teams' local markets, while scheduling a limited slate of "free" national broadcasts. The result is that on football Sunday afternoons, no more than three NFL games are aired on broadcast television in a particular market. If fans want to watch a live broadcast of a Sunday afternoon game not being aired locally, they have to watch it on Sunday Ticket.
As those challenging that model see it, consumers like the hypothetical Ravens fans in Miami are being deprived of the possibility that a local Miami television station, a regional sports network or lower-cost streaming platform might air Ravens games -- a prospect that would exist if NFL teams were not banned from producing and selling broadcasts of their own games.
The appeals court ruling would have sent the case back to a lower court for further proceedings. But the NFL and DirecTV are now petitioning the Supreme Court to review that decision.
In that petition, DirecTV and the league argue that NFL games are the product of a joint venture between the teams playing and the NFL itself, and that its control of the distribution of the broadcasts does not amount to an antitrust violation. If the high court chooses not to take the case -- a statistical likelihood because only about 80 of the 8,000 appeal petitions filed each year are accepted by the justices -- the case would be sent back to the federal trial court for a fuller hearing. Meanwhile, pending a final decision on the merits of the case, the NFL and DirecTV may continue to offer the Sunday Ticket package as is.
A third possibility is that the court hears the case and sides with the 9th Circuit, which would impose the 9th Circuit's limitations on permissible joint-venture activity on the rest of the country. The case could also conceivably affect the NFL's cable-only television deals, as well as joint ventures operated by businesses in other industries. Even if that happens, the case would have to return to a trial court to be hashed out.
"The process of litigating that kind of claim is time-consuming and expensive and often results in a pretrial disposition potentially through settlement," said Jodi S. Balsam, a former NFL attorney who is now a professor at Brooklyn Law School. "But we're a long way off from a court ruling that the NFL has to dismantle NFL Sunday Ticket."
The ongoing wrangling over Sunday Ticket in many ways reprises legal battles over broadcast rights waged as the NFL began to emerge as a national sporting passion some 70 years ago. The federal government brought an antitrust complaint against the league in the 1950s in an effort to get the league to loosen its restrictions on broadcast rights.
In 1953, a federal judge concluded that teams could form their own television deals and have their games broadcast into other teams' home cities. Consequently, most NFL teams signed their own television contracts with broadcasters, while the Cleveland Browns launched their own network.
That arrangement changed after the advent of the American Football League, which in 1960 signed a national television contract for all of its games. Congress soon passed legislation that gave the NFL and other major sports leagues limited antitrust protection, which allows them to pool and sell broadcast rights for all their teams. The antitrust exemption, however, covers only games aired on broadcast television. In their petition seeking Supreme Court review, lawyers for the NFL and DirecTV say that, far from limiting fan choices, the Sunday Ticket model has led to increases in fan interest and viewership.
Moreover, their petition argues, the NFL is not just 32 teams in competition but also an "integrated joint venture" whose games and telecasts cannot be produced "without agreements and joint action with every other team."
The argument is that no one team can produce an NFL contest by itself. Instead, the contest has added value because it is part of a league that plays under a set of rules and standards. "The copyrighted telecast is by necessity a collaboration of at least three parties," Balsam said, explaining the league's argument. "The two teams playing the game, with the third party being the league itself."
Michael A. Fletcher is a senior writer for ESPN's Investigative Unit.
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