Kaleigh McCormick
After almost ten years of litigation and a recent $4.7 billion verdict against the National Football League (“NFL”), the Sunday Ticket subscribers will now have to defend their long-awaited win on appeal to the Ninth Circuit.
In 2015, subscribers to DirecTV’s NFL Sunday Ticket Package filed an antitrust class action lawsuit against the NFL, thirty-two NFL teams, and entertainment provider DirecTV.[1] The plaintiff class is composed of over 2.4 million private subscribers and over 48,000 commercial businesses “that purchased Sunday Ticket anytime between 2011 to 2023.”[2] In the complaint, the plaintiffs accused the defendants of engaging in anti-competitive tactics by “pooling” the teams’ individual television broadcast rights and agreeing to license those rights to out-of-market games exclusively through DirecTV’s NFL Sunday Ticket package.[3] The plaintiffs alleged that by prohibiting teams from competing for these deals, smaller networks were unable to bid for broadcasting rights and those markets were therefore unable to watch the games on local channels.[4] On June 27, 2024, a federal jury in California awarded the plaintiffs over $4.7 billion in damages.[5]
However, two orders from U.S. District Judge Philip S. Gutierrez have further delayed the case’s resolution. Judge Gutierrez first ruled that the testimony of the plaintiffs' experts on damages should have been excluded.[6] The court found that one of the plaintiffs’ experts did not employ “sound economic methodology” and the other presented “an invalid model” to the jury.[7] Since the testimony of these experts was the only evidence the jury could have used to “make a finding of injury and an award of actual damages,” the court found that the NFL was entitled to judgment as a matter of law, or that “the evidence and all reasonable inferences in favor of the verdict could lead a reasonable person to only one conclusion, that the [NFL] was entitled to judgment.”[8]
The court also vacated the $4.7 billion award, noting “that the jury’s damages awards were not based on the ‘evidence and reasonable inferences’ but instead were more akin to ‘guesswork or speculation.’”[9] This is in line with Cornell Law School Professor George Hay’s assessment of the verdict, who noted that “[n]one of the various models that were proposed came up with [the $4.7 billion award].”[10]
This appeal will mark the second time this litigation has been heard by the U.S. Court of Appeals for the Ninth Circuit. In 2019, a 2–1 decision reversed the district court’s dismissal for failing to state a claim.[11] The split court found that the subscribers had plausibly pled “that the interlocking NFL-Team and NFL-DirecTV agreements were designed to maintain market power,” which sufficiently constituted an allegation of an intentional injury to the competitive market.[12]
It is unlikely this case will be concluded soon. This case may even make its way to the Supreme Court, even after their initial denial of certiorari in 2020.[13] In that denial, Justice Brett Kavanaugh expressed doubts over the strength of the subscribers’ argument, highlighting that the Court’s denial had more to do with the undeveloped nature of the litigation.[14] He further added that “the defendants…have substantial arguments on the law” and the plaintiffs’ arguments and Court of Appeals’ opinion “appear[] to be in substantial tension with antitrust principles and precedents.”[15]
Whatever the outcome of this litigation, it necessarily affects the future of professional sports broadcasting (although it should be noted that the NBA, NHL, and MLB all currently market their broadcasting rights on multiple entertainment services).[16] Jeffrey A. Cohen, the chair of Flaster Greenberg’s Litigation Department, sees several potential ramifications if the subscribers ultimately prevail. Cohen writes that “[t]he landscape of broadcasting rights could…see a seismic shift, with the NFL possibly being prohibited from offering pay services that restrict out-of-market games…[T]his could [also] lead to each team, or the league, offering packages to individual markets…[and even] Congress…expand[ing] the limited exceptions…under the Sports Broadcasting Act of 1961.”[17]
[1]Complaint at 2, 11–15, In re Nat'l Football League Sunday Ticket Antitrust Litig. (C.D. Cal. Mar. 23, 2022) (No. 15-ml-02668).
[2]Michael McCann, NFL Must Defend Stunning Sunday Ticket Victory on Appeal, Sportico (Sept. 9, 2024), https://www.sportico.com/law/analysis/2024/nfl-sunday-ticket-lawsuit-appeal-1234796491/ [https://perma.cc/EN3X-WZTQ] [https://web.archive.org/web/20240918114414/https://www.sportico.com/law/analysis/2024/nfl-sunday-ticket-lawsuit-appeal-1234796491/].
[3]Complaint at 4, 24–25, In re Nat'l Football League Sunday Ticket Antitrust Litig. (C.D. Cal. Mar. 23, 2022) (No. 15-ml-02668).
[4]Michael McCann, Why DirecTV’s NFL Sunday Ticket Might Be Illegal Under Antitrust Law, Sports Illustrated (Aug. 14, 2019), https://www.si.com/nfl/2019/08/14/nfl-sunday-ticket-directv-antitrust-violation-lawsuit [https://perma.cc/PP3V-N753] [https://web.archive.org/web/20240918114633/https://www.si.com/nfl/2019/08/14/nfl-sunday-ticket-directv-antitrust-violation-lawsuit].
[5]In re Nat'l Football League's 'Sunday Ticket' Antitrust Litig., 2024 WL 3443897 (C.D.Cal June 27, 2024).
[6]Gina Kim, NFL Hangs Onto Victory in Sunday Ticket Antitrust Fight, LAW360 (Aug. 20, 2024), https://www.law360.com/articles/1871582/nfl-hangs-onto-victory-in-sunday-ticket-antitrust-fight, [https://perma.cc/Z7VG-6M8K] [https://web.archive.org/web/20240923104206/https://www.law360.com/articles/1871582/nfl-hangs-onto-victory-in-sunday-ticket-antitrust-fight].
[7]Order Granting Defendants’ Motion for Judgment as a Matter of Law at 6, 10, In re Nat'l Football League 'Sunday Ticket' Antitrust Litig. (C.D. Cal. Aug. 1, 2024) (No. 15-ml-02668).
[8]Id. at 2–3.
[9]Id. at 15.
[10]Justin Bachman, NFL Says Multiple Errors Mar $4.7B Sunday Ticket Jury Award, Legal Dive (July 9, 2024), https://www.legaldive.com/news/nfl-asks-court-set-aside-massive-sunday-ticket-verdict/720886/, [https://perma.cc/S4CX-DTY9] [https://web.archive.org/web/20240918114923/https://www.legaldive.com/news/nfl-asks-court-set-aside-massive-sunday-ticket-verdict/720886/].
[11]In re Natl. Football League's Sunday Ticket Antitrust Litig., 933 F.3d 1136 (9th Cir. 2019).
[12]Id. at 1159.
[13]Nat’l Football League v. Ninth Inning, Inc., 141 S.Ct. 56 (Mem) (2020).
[14]Id. at 56–57.
[15]Id.
[16]Assoc. Press, Jury Orders NFL To Pay Billions in 'Sunday Ticket' Case for Violating Antitrust Laws, NPR (June 28, 2024), https://www.npr.org/2024/06/27/g-s1-6943/nfl-pay-billions-sunday-ticket-antitrust [https://perma.cc/LJ9F-SLNV] [https://web.archive.org/web/20240918115152/https://www.npr.org/2024/06/27/g-s1-6943/nfl-pay-billions-sunday-ticket-antitrust].
[17]Jeff Cohen, Antitrust Blitz: NFL’s Sunday Ticket Ruling Could Have Potentially Broad Implication for All Professional Sports, JDSupra (July 11, 2024), https://www.jdsupra.com/legalnews/antitrust-blitz-nfl-s-sunday-ticket-5461768/ [https://perma.cc/74QV-RM39] [https://web.archive.org/web/20240918115518/https://www.jdsupra.com/legalnews/antitrust-blitz-nfl-s-sunday-ticket-5461768/].