What the $4.8 billion NFL Sunday Ticket ruling means for football fans

What's the cost of the NFL Sunday Ticket in 2024? Well, for the league, it's nearly 4.8 billion. That's how much a federal jury in California awarded plaintiffs in a class action antitrust lawsuit over how the league handled out of market broadcast as part of a package. The verdict stems from a 2015 complaint from the Mucky Duck, a California sports bar that claims the league violated antitrust laws by bundling all out of market games together, making it impossible to buy a package that featured just one team. For instance, say you're a lonely Los Angeles Chargers fan in the heart of Ohio. You might get the Cincinnati Bengals or the Cleveland Browns games on your local Fox or CBS affiliate, but you would have to buy Sunday Ticket to get access to the whole slate of NFL just to watch your beloved Bolts while getting down to the nuts and bolts of the damages. Of the 4.8 billion, 4.7 billion goes to residential subscribers while nearly 100 million goes to commercial users like the Mucky Duck. Under federal antitrust laws, those sums could be tripled to more than 14 billion. If the judgment is upheld. That works out to around 450 million per team. Well, the league has promised to appeal the decision, and this case could end up before the Supreme Court. Even the federal judge in question didn't like the way this case went. Joining me now to discuss is Nellie Drew, director of the University of Buffalo Center for the Advancement of Sport and professor of practice in sports law. Nellie, we are about to enter a lengthy appeals process, so let's figure this out. What does this mean for fans out there who might think that this ruling could give them better access to their favorite team's games right away? Oh, that's not going to happen this season. The NFL has already committed to an appeal. It will no doubt be a lengthy one. There is a possibility for certain, what's the word I'm looking for post trial motions. So we'll have to see those go. The the challenge always with antitrust cases is that they are so complex and, and it's not something that's going to, you know, as we know, litigation doesn't exactly move at lightning speed anyhow. So this is going to take a while to to, you know, kind of be parsed out. This was a jury trial. But the federal judge in this case did not love where the plaintiffs were going during their arguments. I have a quote that I use specifically because of one word in it. So I think you probably already know which one I'm going for here. I said the case has turned into 25 hours of depositions and gobbledygook. This case has gone in a direction it shouldn't have gone. Could the federal judge throw out the verdict and side with the NFL? Oh, I suppose it's possible. The judge may, you know, there'll probably be a motion for, you know, to overturn the verdict for sure. What does that what does that mean as a practical matter? Well, it took the jury, what was it, less than three hours to come to this conclusion? That's a pretty significant statement. It's not like they were on the, on the edge of, of not going the either way. I am actually amazed that we went as far as we did. I, it's, you know, my colleague Christine Bartholomew, who is an antitrust expert, you know, has, has mentioned the fact that it's rare for antitrust cases to go all the way to trial and for this one to have completed. It's just mind boggling to me. Absolutely mind boggling. What does this mean for the NF LS antitrust exemption? They argue that this falls under it that allows the league to package games and sell them to networks. The plaintiffs were arguing that it only applies to over the air broadcast, not pay TV like satellite. I'm so curious. It's a new world we're living in. So what does that mean? So, so this is not new, new law. And, and, and, you know, so the sports broadcasting exemption goes back to Richard Nixon wine to watch, you know, the then Washington Redskins on TV. Quite honestly, I mean, that's how old this is. And and the Sports Broadcasting Exemption Act specifically was drawn for over the air broadcasts and that was emphasized very heavily. And you also have to remember that as a matter of, of practice, the courts construe any exemptions to the antitrust laws extraordinarily narrowly. The idea is that the antitrust framework is, you know, supposed to be inclusive, right, as much as as possible. And any exemptions are supposed to be very, very narrow and very, very specific, which is what the Sports Broadcasting Act is. And if you review the legislative history of the Sports Broadcasting Act, that is very, very clear. So I was quite honestly very surprised to see the NFL take that position, although I guess there's not much else they could possibly say. Well, and it's assuming that that's just going to continue in a different form. What do we do now with that given how the like television streaming, what it what this all looks like? It's so different than it was in the 60s. Sure, when it was first intended. Yeah, certainly it's a very different, you know, context in in the since, you know, Richard Nixon's days, right. But but having said that, the underlying, you know, point is access. And, and so I don't know how much of an NFL fan you are, but you know, the, the complaint I heard from a number of people over the course of the past year is you can't just own. It's, it's gotten to a point where you have to own multiple platforms to be able to follow your team. And so it's almost going the other way. And, and part of me also wonders, just as a practical manner, when is the NFL going to realize that the lifeblood of the league and, and the source of all its revenue is the fans? So if the fans aren't able to consume the product they want to consume, eventually they're going to go like, maybe soccer's better, right? Is this going to have an effect on, you know, cable companies that rely on bundled packages? Yes, Although how that's going to to play out, I think remains to be seen. It depends upon what the ultimate outcome of this is. Right? And, and was interesting too, as you may have read that the, you know, the NFL tried to posit this as a premium subscription, right? This is only for a very small portion of our fan base. When in reality, you know, given the society we live in now, you know, I've got 7 kids, half of whom are out of the area and adore the Buffalo Bills. But you know, they can't watch them on a regular basis under the current construct, right? Let me ask you this then. Did the NFL mess up in its arguments? You know, on the stand, Goodell called it a supplemental package for the biggest fans, just like you said. But the NFL Sunday Ticket, they, they pitched it basically as this place to watch your favorite teams. Did they mess up in how it was all communicated for the past couple of decades? Really Well, I think what the, the challenge for the NFL council was that the messaging, the the, the advertising messaging was one thing. And then they had to try to spin it a different way when they got into court. And why antitrust counsel, which is always there in league meetings, right? Because, you know, almost everything, literally everything the league does has potentially some antitrust implications. We know now, in the wake of the Supreme Court case in American Needle some years ago, that for sure, when each of the teams in the league, you know, discusses anything with any other team, you have the potential for Section 1 Sherman Act violation because you have two potential competitors collaborating. Now, some of this collaboration is necessary for the league to function, and that's been recognized by the courts, right? You know, somebody has to set the schedule. Somebody has to agree upon what the rules are gonna be, what the new kickoff rule's gonna be, for example, right? That type of collaboration is, generally speaking, aloud under the NI Trust laws. It's when you'd use that position and, you know, combine it with sort of the monopoly, if you will, that the NFL has over its product to extract, you know, unreasonable profits. That's when you start running into trouble. And the key here was that consumer choice was definitely being constrained by this artificial construct. Let's talk about consumer choice. I know this isn't really a legal question. It's definitely more of a business question. But do you think if the NFL were to pitch this product by individual teams, I get to pay for just the Chargers. I get to watch every Chargers game from wherever in the country I am. Don't you think that would be a very, very popular product? It is. But the challenge then is what does that do to the broadcast partners? And that's their bread and butter. They're trying to protect them, right? So that's, I mean, they had they have this, this very, you know, it's it's greed, right? They wanted to use a Sunday ticket to extract an extra little bit. But in the process, they know that they have to protect their broadcast partners because, you know, my kids in Boston aren't watching the Patriots. They're watching the bills if they can get them, right. And and so that's the challenge. All right. Thank you so much. Nellie Drew, professor of practice in sports law, really appreciate your insight on this. I know a lot of football fans are watching this one. We are. Thank you so much.