The Ongoing Legal Battle: NFL vs. "Sunday Ticket" Subscribers
LOS ANGELES -- The intensity inside the courtroom was palpable on Tuesday as the federal judge presiding over the class-action lawsuit filed by "Sunday Ticket" subscribers against the NFL voiced his frustrations with the plaintiffs' attorneys and their handling of the case. Before Dallas Cowboys owner Jerry Jones took the stand for a second day of testimony, U.S. District Judge Philip Gutierrez made it clear that the case's premise was straightforward.
The Core Issue
Gutierrez pointed out the obvious frustration of a Seattle Seahawks fan living in Los Angeles who cannot watch their favorite team without purchasing a subscription for all the Sunday afternoon out-of-market games. The class-action lawsuit encompasses 2.4 million residential subscribers and 48,000 businesses that paid for the package of out-of-market games from the 2011 through 2022 seasons.
The plaintiffs claim that the league violated antitrust laws by selling its package of Sunday games aired on CBS and Fox at an inflated price. Additionally, they argue that the NFL restricted competition by offering "Sunday Ticket" solely through a satellite provider.
The NFL's Defense
The NFL firmly maintains that it has the right to sell "Sunday Ticket" under its antitrust exemption for broadcasting. However, the plaintiffs counter that this exemption only applies to over-the-air broadcasts and not pay TV. Should the NFL be found liable, a jury could award up to $7 billion in damages, an amount that could potentially triple to $21 billion due to the nature of antitrust cases.
Judge's Frustrations
On Monday, Judge Gutierrez had already expressed irritation with the plaintiffs' attorneys for repeatedly rehashing past testimony, viewing it as a waste of time. Before Jones resumed his testimony, Gutierrez also expressed doubts about the relevance of Jerry Jones' 1994 lawsuit against the NFL, which challenged the league's licensing and sponsorship procedures. That lawsuit eventually settled out of court.
Jones had asserted that while he supported the league's model for negotiating television contracts and revenue-sharing agreements, he was challenging certain licensing and sponsorship procedures. When asked on Tuesday if teams should be able to sell their out-of-market television rights, Jones replied that they should not, as it "would undermine the free TV model we have now."
Broadcast Executives' Testimonies
Retired CBS Sports chairman Sean McManus also took the stand, reiterating his long-standing opposition to "Sunday Ticket" and the NFL's Red Zone channel. McManus believes that "Sunday Ticket" infringes on the exclusivity CBS has in local markets. During negotiations, both CBS and Fox requested that "Sunday Ticket" be sold as a premium package. DirecTV, not the NFL, set the prices during the class-action period.
The league has language in its television contracts with CBS and Fox that stipulates the "resale packages (Sunday Ticket) are to be marketed as premium products for avid league fans that satisfy complementary demand to the offering of in-market games." Additional language prohibits selling individual games on a pay-per-view basis. From 1994 through 2022, the NFL received a rights fee from DirecTV for the package. Starting last year, Google's YouTube TV acquired "Sunday Ticket" rights for seven seasons.
Revenue Sharing and Market Dynamics
During a deposition, DirecTV marketing official Jamie Dyckes stated that MLB, the NBA, and the NHL had a suggested retail price for their out-of-market packages. Dyckes added that there was revenue sharing between the leagues and the carriers, as their packages were distributed across multiple platforms.
Looking Ahead
Testimony will continue Thursday, with closing statements scheduled for early next week. Judge Gutierrez mentioned he would consider invoking a rule allowing the court to determine that a jury lacks sufficient evidence to rule for a party in a case. Throughout the proceedings, Judge Gutierrez has candidly admitted, "I'm struggling with the plaintiffs' case." His comments have reflected his mounting frustrations, stating, "The way you have tried this case is far from simple." He also remarked, "This case has turned into 25 hours of depositions and gobbledygook," adding, "This case has gone in a direction it shouldn't have gone."
As the case progresses, all eyes will remain on the courtroom, anticipating whether the plaintiffs' attorneys can present a compelling argument that aligns with the straightforward premise Judge Gutierrez initially outlined.