NFL-DirecTV Sunday Ticket: (Maybe) Too Big To Fail

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In November 2020, the Supreme Court denied review of the Ninth Circuit’s decision to reinstate the antitrust lawsuit against NFL-DirecTV Sunday Ticket, allowing the case to move forward to discovery.2 The lawsuit challenges the NFL’s practice of bundling all game telecasts in the single Sunday Ticket package sold through DirecTV to cable and satellite subscribers.3 Many football fans easily access their favorite team’s game broadcasts because they live in the same market and the games are aired on local stations.4 However, for fans who do not live near their team of choice, the only way to watch out-of-market games is by purchasing Sunday Ticket.5 Sunday Ticket subscribers complain that this forces them to pay for games they don’t want at higher prices than if each NFL team were allowed to individually license their game telecasts.

For most of the television age, the 32 NFL teams have pooled their broadcast rights and authorized the NFL to sell those rights as a single package.6 Thus, NFL teams have agreed not to individually deal any network, TV provider, or streaming service.7 Such pooling agreements are exempt from antitrust scrutiny under the Sports Broadcasting Act, as long as they involve “sponsored telecasting,” that is, games on free over-the-air networks like CBS and Fox.8 However, the NFL-DirecTV Agreement involves cable and satellite telecasts, which the Ninth Circuit found are not covered by the SBA.9

The home viewing and sports bar Sunday Ticket subscribers in this case claim that the NFL-DirecTV Agreement harms NFL fans because it eliminates competition in the market for live telecasts of NFL Games.10 They argue that without this arrangement, the individual teams would create multiple telecasts of each game and compete against each other by distributing the games through various channels.11 The Ninth Circuit determined that the subscribers have sufficiently stated a cause of action for a violation of Sections 1 and 2 of the Sherman Act that survives a motion to dismiss.12 With the case moving forward, this article examines how the subscribers will attempt to impose antitrust liability on defendants.

Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States.”13 Whether a restraint of trade is unreasonable is analyzed under the rule of reason.14 A plaintiff must plead facts that prove “(1) a contract, combination or conspiracy among two or more persons or distinct business entities; (2) by which the persons or entities intended to harm or restrain trade or commerce among the several States, or with foreign nations; (3) which actually injures competition.”15 Additionally, an antitrust plaintiff has standing to bring the action only if actually harmed by the defendants’ anti-competitive conduct.16 The Ninth Circuit concluded that the plaintiff’s complaint “adequately alleges that DirecTV conspired with the NFL and the NFL Teams to limit the production of telecasts to one per game, and that plaintiffs suffered antitrust injury due to this conspiracy to limit output.”17

Section 2 imposes liability on “[e]very person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States.”18 To establish a conspiracy to monopolize claim, plaintiffs must plead: “(1) the existence of a combination or conspiracy to monopolize; (2) an overt act in furtherance of the conspiracy; (3) the specific intent to monopolize; and (4) causal antitrust injury.”19 To plead a monopolization claim, plaintiffs must allege: “(a) the possession of monopoly power in the relevant market; (b) the willful acquisition or maintenance of that power; and (c) causal antitrust injury.”20 The Ninth Circuit concluded that the plaintiffs adequately alleged injury to competition and that defendants have power in the market for professional football telecasts.21 Additionally, the plaintiffs adequately alleged that the NFL’s agreements with its member clubs and with DirecTV were meant to maintain market power.22

Although the Supreme Court denied review of the Ninth Circuit’s decision, Justice Kavanaugh wrote a separate opinion that denial of cert should not be construed as agreeing with the Ninth Circuit’s legal analysis.23 He further opined about two key legal arguments that remain available to the NFL defendants.24 First, antitrust law may not require that the NFL and its teams compete against each other with respect to television rights. Second, plaintiffs may ultimately fail to establish antitrust standing to sue the NFL and its teams as they are indirect purchasers, through DirecTV, of the game telecasts.25

Moving forward, the NFL may also try to resurrect the argument that Sunday Ticket is exempt under the Sports Broadcasting Act. The exemption provides:

The antitrust laws… shall not apply to any joint agreement by or among persons engaging in or conducting the organized professional team sports of football, baseball, basketball, or hockey, by which any league of clubs participating in professional football, baseball, basketball, or hockey contests sells or otherwise transfers all or any part of the rights of such league’s member clubs in the sponsored telecasting of the games of football, baseball, basketball, or hockey, as the case may be, engaged in or conducted by such clubs.26

“Sponsored telecasting” has previously been interpreted to include only advertising supported available free over-the air. Thus, the Third Circuit held in a 1999 decision that the SBA’s antitrust exemption does not cover Sunday Ticket.27 In the current case, the NFL will likely argue that since they still own partial rights to the games available on broadcast television, Sunday Ticket is merely a vehicle for selling these rights.28

Whether the suit settles, results in a liability verdict, or makes its way back to the Supreme Court, the NFL may restructure their broadcast deals to respond to technological developments and changing consumer habits. With many consumers “cord-cutting” and canceling their cable subscriptions in favor of streaming services, the NFL might decide to exit their deal with a satellite provider like DirecTV and attempt to reach a broader market through streaming services. For example, Hulu currently offers more than 65 channels with live sports and may seek further expansion to cement themselves as a threat to the traditional sports telecast market.

Additionally, the NFL could follow the NBA or MLB’s model and create their own NFL streaming service. This option eliminates the antitrust risk because it does not require the purchaser to use any specific television service, but rather serves as an additional streaming provider available to all of the public. The ability for any fan around the country to watch every game from all markets would justify the multi-hundred-dollar price that they would charge. In order to maintain a relationship, and continue securing the billion-dollar TV deals, with CBS and Fox, they could restrict games that are available to local or national markets. This follows the model where, for instance, a Chicago Cubs fan is not able to watch a Cubs game through if they are located in Chicago or if the game is nationally broadcasted.29 However, Justice Kavanaugh’s comments may encourage the NFL to litigate through Supreme Court review to obtain a high court ruling that confirms league prerogatives in pooling broadcast rights.

Alternatively, a negative outcome, and with it the destruction of the NFL-DirecTV Agreement, would change the sports telecasting industry. All major sports leagues and fans should be monitoring this suit as it may affect how sports are consumed for the foreseeable future.

Written by: Jordan Goldstein1

1 Jordan is a 2L at Brooklyn Law School.
2 In re Nat’l Football League’s Sunday Ticket Antitrust Litigation, 933 F.3d 1136 (9th Cir. 2019), cert. denied, 141 S. Ct. 56 (U.S. Nov. 2, 2020)(No. 19-1098)
3 In re Nat’l Football League’s Sunday Ticket Antitrust Litigation, 933 F.3d 1136 (9th Cir. 2019).
4 Id.
5 Id.
6 In re Nat’l Football League’s Sunday Ticket Antitrust Litigation, 933 F.3d at 1148 (9th Cir. 2019)
7 Id.
8 15 U.S.C. § 1291.
9 Id.
10 Id. at 1143.
11 Id. at 1143-1144.
12 Id. at 1144.
13 15 U.S.C. § 1
14 In re Nat’l Football League’s Sunday Ticket Antitrust Litigation, 933 F.3d at 1150
15 Brantley v. NBC Universal, Inc., 675 F.3d 1192, 1197 (9th Cir. 2012)
16 In re Nat’l Football League’s Sunday Ticket Antitrust Litigation, 933 F.3d at 1150
17 Id. at 1158
18 15 U.S.C. § 2
19 Paladin Assoc. Inc. v. Montana Power Co., 328 F.3d 1145, 1158 (9th Cir. 2003)
20 Somers v. Apple, Inc., 729 F.3d 953, 963 (9th Cir. 2013)
21 In re Nat’l Football League’s Sunday Ticket Antitrust Litigation, 933 F.3d 1136, 1159 (9th Cir. 2019)
22 Id.
23 Nat’l Football League v. Ninth Inning, Inc., No. CV-19-01098, 2020 WL 6385696, at *1 (U.S. Nov. 2, 2020) 24 Id.
25 Id. (emphasis in original)
26 15 U.S.C. § 1291.
27 Shaw v. Dallas Cowboys Football Club, Ltd., 172 F.3d 299, 302-303 (3rd Cir. 1999)
29 MLB, (Nov. 14, 2020).

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