By Charles Anzalone
Last month’s U.S. District Court ruling ordering the NFL to pay more than $4.7 billion in damages after ruling that the league violated antitrust laws in distributing out-of-market Sunday afternoon games on a premium subscription service known as the Sunday Ticket is an “unprecedented” decision with far-reaching implications, says Helen A. (“Nellie”) Drew, the Director of the Center for the Advancement of Sport at the University at Buffalo School of Law, and an expert in sports law.
The jury ordered the NFL to pay plaintiffs damages over use of the Sunday Ticket, in which consumers were forced to purchase a bundle of games in order to access any game outside of their local market.
After less than two hours of debate and discussion, the jury awarded $4.7 billion in damages to the residential class of plaintiffs and $96 million in damages to the commercial class, consisting of bars and restaurants. Since damages can be tripled under federal antitrust laws, the NFL could end up being liable for $14.39 billion. For reference, the NFL, one of the most profitable sports leagues in the world, brought in approximately $18 billion last year.
“The verdict against the NFL in the Sunday Ticket case is surprising,” says Drew, “not because it is an unexpected outcome in court, but because the NFL has a history of settling cases which might result in anti-trust liability.
“Any NFL fan wishing to follow his/her hometown team from a remote location knows the frustration of having to purchase the entire Sunday Ticket package.”
Drew cites a personal example of how Sunday Ticket posed a difficult choice on how much of the package to buy and which teams to spotlight.
“As the mom of Bills fans away at college in Boston, stuck with Patriots games, I had to wrestle with whether or not to purchase the overpriced entire Sunday Ticket package (who cares about the Cowboys in the AFC East?), because there was no other choice,” says Drew.
“Bottom line: Consumer choice was constrained, and higher prices were imposed because fans had to either buy the entire package – which few, if any wanted – in order to gain access to the product they wanted (the coverage of their favorite team).
“It’s the definition of an anti-trust violation.”
Drew referred to her colleague Christine Bartholomew, vice dean and professor in UB’s School of Law, to interpret the antitrust aspects. Bartholomew noted the “magnitude and rarity” of this decision.
“It is rare to see an antitrust case go to trial,” says Bartholomew. “It is extra rare for it to be an antitrust class action. But for the NFL, this is the second time they have got embroiled in antitrust hot water in a class action.”
Bartholomew admits that this case is likely far from over.
“We should expect an appeal,” she says. “Antitrust cases raise challenging issues, as do class actions. That means lots of room for an appellate court to reverse this decision.
“The potential consequences of this verdict are far-reaching and could have massive implications,” says Bartholomew. “Seeing what happened to the NFL, other organizations could alter or restructure products similar to that of the Sunday Ticket. It is worth monitoring the ramifications of this decision throughout the sports industry.”
Drew says there can be no doubt that in previous negotiations with media partners, the NFL is not a single entity.
“Therefore, the NFL is subject to Section 1 of the Sherman Act,” she says, “which prohibits multiple entities from agreeing to restrain trade.”
