NFL back in court over antitrust case over Sunday Ticket bundle

LOS ANGELES (CN) — The National Football League was back in court Monday to try to end an antitrust lawsuit by subscribers to its Sunday Ticket package who claim they were forced to pay top dollar for out-of-market games because of the various agreements between the NFL teams, the league and DirecTV.

The lawsuit goes back to 2015, when DirecTV still offered the Sunday Ticket bundle, which has since migrated to YouTube TV. The purported class action case on behalf of residential and commercial subscribers to NFL Sunday Ticket alleges that the arrangement set up by the NFL eliminates competition for live broadcasts of out-of-market games, resulting in inflated prices for the Sunday Ticket package.

The NFL initially won dismissal of the case in 2017 when a federal judge in Los Angeles agreed with the league that the subscribers hadn't made a plausible case that the exclusive distribution deal with DirecTV harmed competition. The Ninth Circuit Court of Appeals, however, found differently and reversed that decision.

After the U.S. Supreme Court passed on the opportunity to take up the case in late 2019, given that it was still in the early stages of litigation, the subscribers' claims ended up back in federal court, where the NFL is now seeking to get them thrown out on a motion for summary judgment. For this, the judge looks at the undisputed facts to decide if the claims can be decided as a matter of law or should be brought before a jury.

In its heavily redacted court filing, the NFL argued that the plaintiffs have changed their liability theory of the case since it was before the Ninth Circuit, and now are also challenging the NFL's broadcast agreements with CBS and FOX. Under these deals, the two networks produced the broadcasts of all games, some of which are broadcast for free by the teams' local markets and the other games are bundled in the Sunday Ticket package for paid subscribers.

Specifically, the NFL agued on the basis of alternative models to distribute the NFL games provided by an expert for the plaintiffs that the subscribers' liability theory depends on eliminating or altering those agreements with CBS and FOX.

But those agreements, the NFL argued, are protected under the 1961 Sports Broadcasting Act, which exempts professional sports teams from antitrust claims when they pool the television rights to their games and sell them exclusively for free, over-the-air broadcasts.

"Exclusivity is central to broadcasters," said Rakesh Kilaru, an attorney for the NFL, at Monday's hearing. "Their whole model depends on viewership."

Insofar as the subscribers are challenging the agreements with CBS and FOX — in addition to the agreements between the teams and the NFL and between the NFL and DirecTV, respectively — their whole case fails and should be thrown out, Kilaru argued.

U.S. District Judge Philip Gutierrez took the NFL's motion under submission without tipping his hand as to how he might rule.

The judge, however, expressed some wariness about focusing on the agreements between the NFL and the broadcast networks by themselves, given the 2017 Ninth Circuit decision.

"You are asking me to do what the Ninth Circuit said not to do — to look at these agreements in isolation," Gutierrez told Kilaru. "The Ninth Circuit said to take a holistic view."

Marc Seltzer, an attorney for the subscribers, disputed that the plaintiffs had changed their theory of the case and called the NFL's argument a "giant non sequitur."

Barring a settlement, it is likely that any outcome of the case will be litigated on appeal.

It is also likely that the NFL got some succor from an observation by Justice Brett Kavanaugh, when the Supreme Court decided it wasn't going to weigh in at an early stage of the litigation.

Pointing out that the Supreme Court's denial of certiorari shouldn't necessarily be viewed as agreement with the legal analysis of the Ninth Circuit, Kavanaugh said the plaintiffs' argument that antitrust law may require each NFL team to negotiate an individualized contract for televising only its own games was in "substantial tension" with antitrust principles and precedents.

"The NFL and its member teams operate as a joint venture," Kavanaugh said. "And antitrust law likely does not require that the NFL and its member teams compete against each other with respect to television rights."

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