12:02pm PT by Eriq Gardner
'Sunday Ticket' Customers Say NFL Illegally Restrains Broadcasts of Out-of-Market Games
The NFL season is already in full force, but before the third week of games comes arguments in a California federal court why a judge shouldn't dismiss an antitrust lawsuit against the professional football league.
The plaintiffs in the consolidated multidistrict litigation are bars and restaurants that fork over thousands and even tens of thousands of dollars each year for DirecTV's "Sunday Ticket" package, which allows their customers to see not only the games airing on local broadcast television, but also the out-of-market ones. That's become essential at a time of increased employment mobility and the rise of fantasy football. NFL fans have interest beyond their local teams.
The lawsuit claims an antitrust conspiracy at hand arising from the way in which the NFL's 32 member franchises collectively pool their rights and come to agreements with DirecTV and broadcasters restraining the televised exhibition of out-of-market games. But for this, they say, NFL teams might individually stream their games online and the result would be more competitive pricing and content. At the moment, if one wants to see an out-of-market game, he or she needs access to "Sunday Ticket."
On Thursday, the plaintiffs filed opposition papers to the NFL's motion to dismiss. The plaintiffs first look to clarify what their legal action is all about.
"The NFL Defendants’ motion to dismiss rests largely on the false premise that Plaintiffs are challenging the existence of Sunday Ticket itself," states the opposition brief. "But Plaintiffs are not challenging Defendants’ right to bundle NFL telecasts. They are challenging agreements that restrain competition with Sunday Ticket and the telecasts it includes. First, the NFL Defendants and DirecTV have agreed to constrain the number of broadcasts aired on a typical Sunday afternoon to just three games, requiring consumers and businesses to purchase the separate Sunday Ticket bundle if they wish to watch any of the other games aired at that time. Second, Defendants have agreed that telecasts not available on local television ('out-of-market telecasts') shall be available only through DirecTV, preventing subscribers to other services from having access to those games at all."
Attorneys for the suing bars and restaurants point out that until 1961, each NFL team arranged separately for the broadcast of its games and that the NFL is the only major American league that sells its out-of- market package exclusively through a single MVPD (DirecTV).
They recount the history of how today's system came to be with talk of a Justice Department challenge in the 1950s when the NFL attempted to enforce geographical restrictions, the resulting rulings, and Congress' response with the Sports Broadcasting Act.
The plaintiffs argue that the statute was "carefully tailored" to allow joint licensing in the "sponsored telecasting of the games," which they interpret to mean free over-the-air television, but not immunity from a challenge to geographical restraints with the exception of protecting ticket sales. And they nod to a 1984 Supreme Court case involving the NCAA's control of college football broadcasts to support their proposition that limitations on game licensing can constitute a "naked restraint" on competition.
Here's the full oppositional brief, which might lead to an entirely different perspective on those football fans crowding into a bar this weekend.