A class-action lawsuit, once believed to have been non-venomous, has emerged once again, and this time, it could cost the NFL a whopping $21 billion+ in damages. Initiated in 2015, the case surely raises questions about the NFL’s compliance with the antitrust laws. Notably, the saga traces back to 1994, when the league began offering “Sunday Ticket” as an alternate ticketing option.
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For those out of the loop, before 1994, fans didn’t have the option to watch their favorite team on TV if they were out of town during that game. For example, if a Baltimore Ravens fan was in Texas during a Ravens home game, he wouldn’t be able to watch it, as the local network affiliates of Texas didn’t air a Baltimore match and vice versa.
Considering every city had its own local affiliates, traveling fans found it difficult to catch their teams in action. Hence, in 1994, the NFL launched an out-of-market sports package that broadcasted all the regional matchups produced by Fox and CBS. This package by the NFL and its media partners was called the “Sunday Ticket.”
In theory, the solution was an excellent problem solver for a niche audience. Therefore, the NFL made it a top-of-the-shelf product and priced it quite high, considering it was seen as a premium offering from their side. But in 2015, the plaintiffs of the lawsuit concluded that the “Sunday Ticket” was unaffordable for most consumers.
The plaintiffs argued that the media networks along with the NFL benefited immensely from this deal, as it allowed them to charge high while cutting the local affiliates. The plaintiffs saw this as a violation of antitrust laws, which led to the class-action lawsuit.
“NFL, Fox, CBS and DirecTV agreed to make an expensive toll road that very few people would be able to afford,” said the plaintiffs’ attorney, via the Associated Press. “Every single competitor in this scheme benefited.”
The plaintiffs citing the violation of the laws are, therefore, seeking $7.1 billion in damages. But considering this comes under the federal antitrust laws, the legal code requires the compensation amount to be tripled. So if the NFL were to lose this legal battle, they would have to ship out a humongous $21.3 billion out of their pockets.
As rich as the league is, $21 billion is a massive amount of money. Fortunately, however, the league has historically never let legal matters go this far.
History Predicts That the NFL Will Win the Case, but It Is Not as Easy as It Looks Like
While it is true that the NFL has had a fair share of luck in legal matters, what goes against them is the fact that the lawsuit covers nearly 2.5 million people. This is because it counts every residential and commercial customer who purchased the “Sunday Ticket” from 2012 to 2022, as reported by CBS Sports.
Moreover, the main propagator from 1994 to 2022 has been one single partner, DirecTV, further strengthening the plaintiffs’ case. But on the flip side, this is $21 billion we are talking about. Globally, it’s very rare for big conglomerates to shell out such money in legal matters.
Moreover, the NFL’s attorneys so far have defended themselves by calling it a premium exclusive offering. In their eyes, they see it as Starbucks charging extra money for the same product that one might get from their local barista for a much cheaper price. In the NFL’s eyes, the 2.5 million+ subscribed by choice.
“The case is about choice. This is a valuable, premium product. Think about all the choices available to fans. We want as many people as possible to watch the free broadcasts,” said the league’s attorney, via the AP.
That being said, it will be interesting to see how this lawsuit shapes up in the coming weeks. It is an interesting story to keep one’s eyes on because not many expected the league to lose its case around the relocation of the Rams.
Not only did they lose the case, but they were forced to settle with the city of St. Louis and other entities by paying off a whopping $790 million. Safe to say, we have a few crucial court hearings ahead of us.
