Judicial Frustration Looms Over Sunday Ticket Antitrust Lawsuit
LOS ANGELES -- The federal judge overseeing the class-action lawsuit filed by "Sunday Ticket" subscribers against the NFL expressed his growing frustrations Tuesday regarding the plaintiffs' legal strategy. U.S. District Judge Philip Gutierrez, who is presiding over the case, voiced his concerns before Dallas Cowboys owner Jerry Jones took the stand for a second day of testimony.
Simplifying the Case's Premise
Judge Gutierrez emphasized the simplicity of the case's premise. He pointed out the clear frustration experienced by a Seattle Seahawks fan residing in Los Angeles who cannot watch their favorite team without purchasing a subscription that includes all Sunday afternoon out-of-market games.
The class-action lawsuit involves 2.4 million residential subscribers and 48,000 businesses who paid for the out-of-market games package from the 2011 through 2022 seasons. The plaintiffs allege that the NFL violated antitrust laws by selling the package of Sunday games aired on CBS and Fox at inflated prices. Additionally, they argue that the league restricted competition by offering "Sunday Ticket" exclusively through a satellite provider.
NFL's Antitrust Exemption Defense
The NFL firmly contends that it has the right to sell "Sunday Ticket" under its antitrust exemption for broadcasting. However, the plaintiffs argue that this exemption applies solely to over-the-air broadcasts and not pay TV. If the NFL is found liable, the jury could potentially award up to $7 billion in damages—a figure that could triple to $21 billion, as antitrust cases often result in triple damages.
Tuesday's court session was not the first instance of Judge Gutierrez expressing his dissatisfaction with the plaintiffs' legal representation. On Monday, he chastised their attorneys for redundancy, describing past testimony multiple times, which he considered a waste of time.
Historical Context: Jerry Jones' 1994 Lawsuit
Before Jones resumed his testimony, Judge Gutierrez voiced doubts about the plaintiffs' attorneys referencing Jerry Jones' 1994 lawsuit against the NFL regarding licensing and sponsorship procedures. Jones had filed the lawsuit asserting that while he supported the league's model for negotiating television contracts and revenue-sharing agreements, he contested its licensing and sponsorship procedures. The lawsuit was eventually settled out of court.
When questioned on Tuesday about whether teams should be able to sell their out-of-market television rights, Jones firmly stated that they should not, arguing that it "would undermine the free TV model we have now."
Testimonies Supporting the NFL
Retired CBS Sports chairman Sean McManus also testified, reiterating his long-standing opposition to "Sunday Ticket" and the NFL's Red Zone channel. McManus argued that "Sunday Ticket" infringes on the exclusivity CBS enjoys in local markets. Both CBS and Fox had requested during negotiations that "Sunday Ticket" be marketed as a premium package. DirecTV, not the NFL, set the prices during the class-action period.
The NFL's television contracts with CBS and Fox include provisions stating that the "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 language prohibits selling individual games on a pay-per-view basis.
From 1994 to 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.
Market Comparisons
During a deposition, DirecTV marketing official Jamie Dyckes mentioned that MLB, the NBA, and the NHL had suggested retail prices for their out-of-market packages. Dyckes added that these leagues shared revenue with the carriers, as their packages were distributed across multiple platforms.
As the trial continues, testimony is scheduled to resume Thursday, with closing statements expected early next week. Judge Gutierrez has indicated he might consider invoking a rule that allows the court to determine a jury lacks sufficient evidence to rule for a party in a case.
Quotes from Judge Gutierrez
Judge Gutierrez candidly admitted, "I'm struggling with the plaintiffs' case." Throughout the proceedings, his comments have reflected his mounting frustrations, stating, "The way you have tried this case is far from simple." He also remarked, "This case has turned into 25 hours of depositions and gobbledygook," adding, "This case has gone in a direction it shouldn't have gone."
As the case proceeds, all eyes remain on the courtroom, anticipating whether the plaintiffs' attorneys can present a compelling argument that aligns with the straightforward premise Judge Gutierrez initially outlined.