The National Football League (NFL) suffered a significant defeat in a federal court on Thursday as a judge ruled against the league in a longstanding class-action lawsuit. The court ordered the NFL to pay $4.7 billion in residential class damages and an additional $96 million in commercial class damages.
This decision marks a pivotal moment in a lawsuit that has been pending for nearly a decade. The legal battle, initially filed in 2015, centers around the NFL's "Sunday Ticket" package, a service launched in 1994 allowing out-of-market fans to watch their favorite teams. The plaintiffs argued that the NFL violated antitrust laws by bundling this exclusive content, effectively limiting the choices available to consumers and driving up prices.
The Class-Action Lawsuit
Originally targeting damages of $7 billion, the lawsuit scrutinized the NFL's practices from 2012 to 2022. During this period, "Sunday Ticket" subscribers, roughly 2.5 million residential and commercial customers, were affected by what the plaintiffs alleged to be anti-competitive behavior. The judge's decision could have broader implications for exclusive sports broadcasting packages, pending the NFL's appeal to the 9th Circuit.
Amanda Bonn, representing the plaintiffs, argued that "NFL, Fox, and DirecTV agreed to make an expensive toll road that very few people would be able to afford," indicating that the deal benefited every party involved in the scheme while disadvantaging the consumers. This sentiment underscores the core of the antitrust allegations.
NFL's Stance and Future Actions
Despite the ruling, the NFL remains defiant, maintaining that their media distribution strategy is the most fan-friendly model in sports and entertainment. In a statement released following the verdict, the league expressed disappointment, stating, "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."
Steve Bornstein, who played a significant role in the development of "Sunday Ticket," commented on the package’s inception: "The NFL always wanted 'Sunday Ticket' to be an additional package. That is how it was designed since its inception." This historical perspective emphasizes the league's original intent to provide a premium product to fans, which has now come under legal scrutiny.
Potential Industry Implications
The outcome of this case may lead to increased scrutiny of exclusive sports broadcasting packages across the industry. As Beth Wilkinson, another notable voice in the case, pointed out, "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."
DirecTV, which held the rights to "Sunday Ticket" from its inception in 1994 until 2022, saw those rights transferred to YouTube TV last season. The shifting of these rights highlights an evolving landscape in how sports content is distributed and consumed.
Additionally, the NFL's history of settlements also comes into focus. In 2021, the league settled with the city of St. Louis and several other entities for $790 million related to the relocation of the Rams. This precedent of significant financial settlements adds context to their current legal battles.
Next Steps in the Legal Process
The NFL plans to appeal the decision, and a hearing is scheduled for July 31 to address post-trial motions, including a potential overturning of the verdict. This next phase in the legal process will be closely watched as the NFL seeks to mitigate financial and reputational damage.
The outcome of this appeal could redefine the parameters of sports broadcasting agreements, impacting not only the NFL but potentially all major sports leagues and broadcast partners. For now, fans, legal experts, and industry stakeholders await further developments in this landmark case.