NEWS
The $21 Billion Lawsuit That Could Break the NFL: A class-action case over the NFL’s “Sunday Ticket” package is finally headed to trial in a fundamental challenge to the league’s media-rights model in a case that could become one of the most explosive lawsuit in America History
The case that could prove to be one of the most explosive lawsuits in the history of American sports didn’t start out looking like a blockbuster.
Back in 2015, when a San Francisco pub called the Mucky Duck filed a complaint about how the National Football League handles its out-of-market broadcasts, it was viewed as little more than a nuisance. Over the next nine years, the case snaked its way through the courts, producing endless filings, repeated false starts and even a dismissal that was eventually overturned.
No one is dismissing it as a mere nuisance anymore. This week, inside a Los Angeles courtroom, the case against the NFL is finally headed to trial, putting billions of dollars on the line and the business model that underpins America’s richest sports league at stake.
The class-action suit, which alleges that the NFL violated antitrust law and harmed consumers through the sale of its exclusive “Sunday Ticket” telecast package of games, is a direct challenge to the league’s lucrative media rights deals. Those who could be summoned to testify include commissioner Roger Goodell and Dallas Cowboys owner Jerry Jones, while documents shown during the trial could provide a rare glimpse into how the NFL conducts its business behind closed doors.
The case essentially pits the league against a class composed of millions of its own fans who shelled out big bucks for a premium product.
People familiar with the NFL’s thinking say the league’s media model is the best one in sports for fans, with the majority of games—and all local ones—shown on broadcast television. They also believe that upending the current dynamic would harm fans, instead of helping them, and would warp the game’s competitive equity.
Even for a fabulously rich sports league, the case carries an enormous risk. On the high end of their modeling, the plaintiffs estimate the damages at $7 billion. And in antitrust cases, those get tripled—meaning that in a doomsday scenario, the NFL could be staring down a $21 billion bill.
“This matters for two reasons. First, there is a large sum of money involved here that realistically may be transferred from the NFL teams to consumers,” said Marc Edelman, a professor of sports and antitrust law at Baruch College’s business school. “Second, in terms of the NFL’s business practices moving forward, the decision here will play a role in determining whether individual NFL teams must compete against each other in the sale of rights to broadcast their games.”
The case boils down to how NFL teams pool together and then collectively sell their media rights, and a jury will have to decide whether aspects of that arrangement are anticompetitive.
On Sunday afternoons during the season, CBS and Fox air games regionally, while out-of-market games are available through the Sunday Ticket package, which was available through DirecTV before last season, and is now sold through YouTube TV. In other words, New Yorkers can watch every Jets game on television, but a Carolina Panthers fan living in New York must subscribe to Sunday Ticket to watch every one of their games.
The plaintiffs contend that the league and its teams made anticompetitive agreements that limited fans’ ability to access out-of-market games without forking over hundreds of dollars for Sunday Ticket, which also required them to sign up for a bunch of games they didn’t want.
Without the agreements, they argue, teams would sell those rights individually or in smaller groups—more in line with college football’s model, which produces games on an array of different networks. They say this would create more telecasts of NFL games that would be accessible to more viewers at a lower price.
The plaintiffs also allege that the NFL engaged in a price-fixing scheme that inflated the cost of the Sunday Ticket package. In a heavily redacted legal filing earlier this year, the plaintiffs say that among the 1.2 million pages of discovery produced by the league, they identified two “smoking-gun” documents that provide evidence of this.
“The documents show that the NFL discussed retail price with prospective bidders, rejected proposals to offer cheaper alternatives, and ultimately chose the partner who would agree to the existing restrictions,” the plaintiffs say in one filing.
People familiar with the NFL’s thinking say there’s no smoking gun because the league never did anything wrong. They say its model is the most fan-friendly in sports, a claim that’s backed up by the popularity of the league’s broadcasts: NFL games accounted for 93 of the 100 most-watched television programs last year.