The Supreme Court may soon rule on whether an appeals court decision that revived a class-action lawsuit claiming that DirecTV’s NFL Sunday Ticket, which bundles all NFL games into a package available exclusively to subscribers of the company’s satellite television service, runs afoul of federal antitrust laws.
The court could decide as soon as March 6 if it will hear the appeal, cited as National Football League v. Ninth Inning Inc. The NFL, an unincorporated association of 32 member clubs, and DirecTV, were sued by plaintiffs Ninth Inning Inc., 1465 Third Avenue Restaurant Corp., Robert Gary Lippincott Jr., and Michael Holinko.
The NFL and DirecTV are urging the Supreme Court to consider their appeal.
Attorneys for both organizations argue that the 9th U.S. Circuit Court of Appeals made a legal mistake when on Aug. 13, 2019, it ordered a class-action suit reopened that claims the Sunday Ticket package forces football fans to “pay more for games than they want,” contrary to a federal law known as the Sherman Act.
The law forbids competing businesses from working together to raise prices and limit consumer choice. The appeals court undid a lower court’s dismissal of an action brought in 2015 by a group of fans, bars, and restaurants who purchased the Sunday Ticket package.
According to court documents, each of the NFL teams signed an agreement with the NFL to pool their telecasting rights and provide the NFL the authority to exercise those rights. Acting on behalf of the teams, the NFL made two additional agreements licensing the teams’ telecast rights with CBS and Fox. The two television networks are permitted to broadcast a limited number of games through free, over-the-air television.
The agreement between the NFL and the two networks allows DirecTV to package those telecasts as bundled feeds to Sunday Ticket subscribers. The plaintiffs say these agreements function to limit competition for the sale of professional football game telecasts.
Watching football on the small screen on Sundays can get expensive.
“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,” ESPN reports.
In the opinion written by Judge Sandra S. Ikuta last year, the circuit court seemed to express sympathy for TV viewers as it found there may be an antitrust law violation.
“Every Sunday during football season, millions of National Football League (NFL) fans tune in to watch their team play. If they live in the same area as their favorite team—such as Los Angeles Rams fans who live in Los Angeles—they can tune into their local Fox or CBS station to enjoy their team’s game on free, over-the-air television. But if NFL fans happen to live far away from their favorite team—such as Seattle Seahawks fans residing in Los Angeles—they can watch every Seahawks game only if they purchase DirecTV’s NFL Sunday Ticket, a bundled package of all NFL games available exclusively to subscribers of DirecTV’s satellite television service.”
The plaintiffs, Ikuta noted, claim that if this restrictive arrangement didn’t exist, “the 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.”
An NFL loss in the litigation would help consumers, one expert told ESPN.
“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,” Stefan Szymanski, a sports economist at the University of Michigan, was quoted as saying. “But it should be good news for consumers because they should be paying less” for games outside their market.
