8:04am PT by Eriq Gardner
DirecTV's "NFL Sunday Ticket" Is Subject of Antitrust Lawsuit
A big part of the success of DirecTV has been a deal with the National Football League for rights to carry broadcasts of all of the league's out-of-market games. The satellite giant pays $1.5 billion a year for these rights. They are now being challenged in a class-action lawsuit alleging violations of federal antitrust law.
A class of fans led by Thomas Abrahamian launched the lawsuit on Wednesday.
The case follows similar class actions targeting the broadcast arrangements made for professional baseball and hockey leagues. A federal judge agreed to certify those class actions in May, and afterward, the NHL came to a proposed settlement that would result in its fans having the option to purchase their favorite teams' out-of-market games at a discounted price.
Now, it's time for the NFL to face the same sort of antitrust scrutiny over its TV rights deals. The wave of litigation can in some respects be traced to a 2010 Supreme Court ruling that NFL teams are capable of conspiring when making licensing deals.
The newest lawsuit objects to the way that NFL teams divide markets, enforce blackouts, and end up costing consumers who might only wish to see certain games instead of bundles.
"Thus, a Cleveland Browns fan living in California cannot watch the Browns play, except occasional games on network television, unless he purchases the entire package of League games from NFL Sunday Ticket," states the complaint.
DirecTV — which was also a co-defendant in the actions targeting NHL and MLB — is said to have "joined the conspiracy" by enforcing regional blackout agreements. (Last September, the FCC voted to end a rule that gave the NFL cover for its blackouts.)
In the absence of territorial restrictions, the lawsuit suggests that teams would be competing on the licensing front and increasing the availability of games "over a wider range of media, including cable, the internet, and wireless devices."
If the lawsuit follows the path of the NHL case, fans of professional football might have have the option of having a cheaper way to watch their favorite team instead of their current "all-or-nothing" choice.
And if the lawsuit follows the path of the MLB case — which hasn't settled — the NFL could be headed to trial to present the pro-competitive effects of bundled packages. When arguing with the FCC for the continuation of the blackout rule, for instance, the league said that territorial restrictions ensured more games are televised.
The NFL reaps billions from DirecTV for satellite rights, billions more from Verizon for mobile rights, and most recently, a good chunk of money from Yahoo for the streaming rights to a single game between two of the league's worst-performing franchises. The newest lawsuit (read the full complaint here) asks for an injunction that could put this at risk.