Foundation of the Legal Battle
The long-running class-action lawsuit filed by "Sunday Ticket" subscribers against the NFL has taken another significant turn. The federal judge presiding over the case, U.S. District Judge Philip Gutierrez, expressed his mounting frustrations on Tuesday with how the plaintiffs' attorneys are managing their side of the lawsuit.
Before Dallas Cowboys owner Jerry Jones took the stand for a second day of testimony, Judge Gutierrez underscored the straightforward nature of the case's premise. He highlighted the understandable frustration of a Seattle Seahawks fan residing in Los Angeles, unable to watch their favorite team without subscribing to an entire package of Sunday afternoon out-of-market games.
The Lawsuit's Scope and Claims
The class-action lawsuit encompasses 2.4 million residential subscribers and 48,000 businesses that purchased the package of out-of-market games from the 2011 through 2022 seasons. The plaintiffs allege that the NFL violated antitrust laws by selling its package of Sunday games aired on CBS and Fox at an inflated price. Moreover, they argue that the league restricted competition by offering "Sunday Ticket" exclusively through a satellite provider.
In response, the NFL steadfastly maintains that it retains the right to sell "Sunday Ticket" under its antitrust exemption for broadcasting. The plaintiffs counter that this exemption applies solely to over-the-air broadcasts and not to pay TV.
Should the NFL be found liable, a jury could award up to $7 billion in damages. Given the nature of antitrust cases that can result in triple damages, this figure has the potential to balloon to $21 billion.
Judge's Frustrations and Legal Precedents
Tuesday was not the first instance of Judge Gutierrez expressing his frustration with the plaintiffs' legal approach. On Monday, he admonished their attorneys for repeatedly referencing past testimony, which he deemed a waste of time.
Prior to Jones resuming his testimony, Gutierrez cast doubts about the plaintiffs' attorneys referencing Jerry Jones' 1995 lawsuit against the NFL, which contested the league's licensing and sponsorship procedures. Eventually, both sides settled out of court.
The 1994 lawsuit filed by Jones declared his support for the league's model for negotiating television contracts and sharing revenue but challenged its licensing and sponsorship procedures. When asked Tuesday if teams should be able to sell their out-of-market television rights, Jones asserted they should not, arguing it "would undermine the free TV model we have now."
Broadcasting Dynamics and Market Exclusivity
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, claiming that "Sunday Ticket" infringes on CBS's local market exclusivity.
During negotiations, both CBS and Fox requested that "Sunday Ticket" be marketed as a premium package. DirecTV, not the NFL, was responsible for setting the prices during the class-action period. The league's television contracts with CBS and Fox specify that "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 contractual 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.
Competitive Landscape and Revenue Sharing
During a deposition, DirecTV marketing official Jamie Dyckes stated that MLB, the NBA, and the NHL suggested retail prices for their out-of-market packages. Dyckes added that revenue sharing existed between the leagues and the carriers, given that their packages were distributed across multiple platforms.
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 the case.
Judicial Commentary
Gutierrez candidly admitted, "I'm struggling with the plaintiffs' case." Reflecting his growing frustrations throughout the proceedings, he noted, "The way you have tried this case is far from simple." He added, "This case has turned into 25 hours of depositions and gobbledygook," pointing out, "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 Judge Gutierrez's initial straightforward premise.