The NFL suffered a significant legal defeat on Thursday when a federal judge ruled against the league in a long-standing class-action lawsuit. The ruling mandates the NFL to pay a whopping $4.7 billion in residential class damages, coupled with an additional $96 million for commercial class damages.
The legal battle, which has persisted in courts for nearly a decade, centers around the NFL's "Sunday Ticket" package. Launched in 1994, "Sunday Ticket" has been a unique offering for out-of-market fans eager to watch their home teams. However, the class-action lawsuit, first filed in 2015, questions whether the NFL's exclusive broadcasting package violated antitrust laws.
The lawsuit opened scrutiny on all residential and commercial subscribers who utilized the service between 2012 and 2022. The subscriber base during this period amounts to nearly 2.5 million customers. Initially, the plaintiffs aimed to secure $7 billion in damages, but the judge's decision set the amount at $4.7 billion for residential damages, further adding $96 million for commercial damages.
Antitrust Allegations and Legal Arguments
The crux of the lawsuit is the argument that the NFL, along with Fox and DirecTV, agreed to construct an exclusive, high-priced service that few could afford. Attorney Amanda Bonn highlighted this point, stating, "NFL, Fox, and DirecTV agreed to make an expensive toll road that very few people would be able to afford." Bonn argued that every competitor in this scheme benefited, affirming, "Every single competitor in this scheme benefited."
On the other hand, Beth Wilkinson, defending the NFL, emphasized the wide array of choices available to fans. "The case is about choice. This is a valuable, premium product. Think about all the choices available to fans. We want as many people as possible to watch the free broadcasts," she pointed out.
Echoing this sentiment, Steve Bornstein, who was involved in the development of "Sunday Ticket," maintained that the NFL's intention was always to offer it as an additional package. "The NFL always wanted 'Sunday Ticket' to be an additional package. That is how it was designed since its inception," Bornstein explained.
NFL's Response and Future Actions
Reacting to the verdict, the NFL expressed disappointment and reiterated its belief in the legality and fan-friendliness of its media distribution strategy. "We are disappointed with the jury's verdict today in the NFL Sunday Ticket class action lawsuit. We continue to believe that our media distribution strategy...is by far the most fan-friendly distribution model in all of sports and entertainment. We will certainly contest this decision as we believe that the class action claims in this case are baseless and without merit," the NFL stated.
The NFL has announced plans to appeal the decision to the 9th Circuit as it remains steadfast in its stance. Pending this appeal, the ruling could prompt deeper scrutiny over the exclusivity of sports broadcasting packages.
Broader Implications and Settlements
The "Sunday Ticket" case is not the NFL's first legal hurdle concerning its broadcasting and team management. In 2021, the league settled with the city of St. Louis and other entities for $790 million over the relocation of the Rams, indicating a pattern of high-stakes legal challenges.
Further developments are expected as a hearing is scheduled for July 31 to address post-trial motions, including the possibility of overturning the verdict. This case, hovering over the NFL for nearly ten years, now has the potential to reshape the landscape of sports broadcasting rights and consumer access.
The decision certainly sets the stage for what could be a pivotal moment in how professional sports leagues manage their broadcasting deals and the legal scrutiny surrounding such exclusive arrangements. All eyes will be on the 9th Circuit as the appeal process unfolds, potentially affecting millions of subscribers and the future dynamics of sports viewership.