The NFL suffered a major defeat in a California federal court on Thursday.
A jury has sided with plaintiffs in a class action lawsuit over NFL television rights, awarding $4.7 billion (C$6.4 billion) in damages to subscribers of the Sunday Ticket television package.
The league said it was disappointed with the verdict and said it would appeal.
After the trial, which included testifying by Commissioner Roger Goodell and Dallas Cowboys owner Jerry Jones, the jury awarded $4.7 billion in damages to residential customers and just under $100 million to commercial customers. The amount could be tripled to just under $14 billion under antitrust law if the judgment is upheld.
That’s nearly two-thirds of what the NFL takes in annually, and the implications for the sports world are significant.
Good for fans
In a statement, the NFL argued that its distribution strategy was “by far the most fan-friendly distribution model in sports and entertainment. We will certainly challenge this decision as we believe this class action is without merit.”
This is a new twist in a saga that has lasted since 2015 when a San Francisco pub, the Mucky Duck, filed a lawsuit accusing the NFL of violating antitrust law and penalizing consumers with its Sunday Ticket package.
For a circuit that rakes in more than $20 billion annually, the verdict is threatening because it could upend the circuit’s business model in which broadcast agreements generate the bulk of the NFL’s profits.
The case pits the NFL against its own fans. The plaintiffs argue that the way teams come together to collectively sell their broadcast rights through the Sunday Ticket is unfair because they are forced to pay hundreds of dollars for a product that also includes games they don’t want and whose prices can be inflated.
Regional
On Sunday afternoons, CBS and Fox broadcast games locally, while games in other markets are available on Sunday Ticket.
This means that Dallas Cowboys games are broadcast in Texas, but fans from Philadelphia and living in Texas, for example, must subscribe to Sunday Ticket to watch Eagles games. The package was sold on DirectTV until last year when it migrated to YouTubeTV.
The NFL has argued that it is one of the only leagues that broadcasts nearly all of its games on traditional television. In testimony last week, Commissioner Goodell characterized Sunday Ticket as an “add-on package” for the most passionate fans and acknowledged that CBS and Fox had expressed concerns that the package would dilute the value of their respective deals.
As for Jerry Jones, he mentioned during his testimony that the Cowboys would make more money if they sold their own broadcast rights because of their popularity, but he also indicated that doing so would hurt the league in its entirety.
According to the Wall Street Journal
2024-06-27 22:22:14
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