Multiple aspects of the NFL Sunday Ticket package seems to constitute a violation of antitrust laws. One specific aspect of that arrangement continues to be challenged in court — and a federal appeals court issued a key ruling on Tuesday against the NFL and DirecTV.
The full ruling and opinion, all 44 pages of it, can be read here. The goal of this remainder of this blurb will be to translate those 44 pages into English, or something close to it.
The case, which had been dimissed by a federal district court, alleges that the Sunday Ticket package eliminates competition in a given market for the live telecast of NFL games. Absent the global, buy-all-or-buy-none Sunday Ticket option, the NFL’s teams could make individual games available through other platforms, from free TV to cable to satellite to Internet, competing against each other and making the specific game(s) that a given customer wants to watch easier and cheaper to obtain. The U.S. Court of Appeals for the Ninth Circuit decided to reinstate the case, and to allow it to proceed.
It’s a potentially significant development, given that (as observed by the appeals court) the NFL’s broadcast antitrust exemption does not apply to cable, satellite, or Internet broadcasts. This means that any effort by the NFL to sell global rights to cable, satellite, and/or Internet companies will be subject to potential antitrust liability.
When this argument was made several decades ago against the NCAA, which is not protected from antitrust liability when it comes to the broadcasting of college football games, it led to the proliferation of televised college football. If the current litigation against the NFL prevails, it’s unclear what will happen next.
The league could retain its current market-by-market TV arrangements, relying on the antitrust exemption to justify broadcating a handle of Sunday afternoon games. Alternatively, the league could embrace the potential revenue gains that would come from making all games available in one or more available platforms in every market.
Whether that would offset the $1.5 billion per year that the league receives from DirecTV remains to be seen. Whether that would cause the revenue-sharing arrangement among all teams to potentially implode also would fall into the to-be-determined category.
But if, in the end, the teams whose games are not available for free in a given market could sell the rights to watch those games one by one, without customers committing to all out-of-market games and all weeks by purchasing Sunday Ticket, the customers win — because the customers would get to purchase only what the customers want to watch, getting for example all Seahawks games in Cincinnati without having to pay for any Jaguars, Titans, and Lions games.
It could take many more years for this to play out in court. Indeed, it took more than eight months for the current case to go from briefs and oral arguments to a final decision. But a business model that could be a plain-sight antitust violation remains under legal attack, and the winner could be anyone who simply wants to watch one team’s games without having to buy all of them.