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Football fans are one step closer to finding out whether DirecTV’s Sunday Ticket deal with the NFL unfairly restricts competition and raises prices, after a California federal judge heard arguments on Monday.
Sports bars and restaurants across the country began filing lawsuits in 2015, claiming the NFL’s deal with DirecTV violates the Sherman Antitrust Act by restraining broadcasts of out-of-market games and charging “supracompetitive premiums.” Currently, NFL Sunday Ticket subscribers are the only ones able to view those games and DirecTV is the only television provider who offers the package.
The NFL filed a motion to dismiss the suit in August, arguing that the league isn’t obligated to distribute any out-of-market games and prior to Sunday Ticket those games weren’t available to fans at all. The same day, DirecTV filed a motion to compel arbitration in the case, arguing that its service agreement contains an arbitration provision that customers agree to when signing up.
U.S. District Judge Beverly Reid O’Connell on Monday took the matters under submission following two hours of arguments.
It seems she’s leaning toward denying DirecTV’s motion. The judge described the situation as “a conundrum” because the NFL can’t be compelled into arbitration. “This case can’t be completed without the NFL,” O’Connell said, adding that she questions whether the plaintiffs would be able to obtain the relief they seek, specifically an injunction, in an arbitration with only DirecTV.
The media company’s attorney Michael Baumann tried to assure the judge that plaintiffs would be able to attain any relief to which they are entitled from DirecTV in arbitration. Meanwhile, plaintiffs’ attorney Christopher Lebsock attempted to show that there was no agreement to arbitrate, arguing that a company can’t prospectively waive a statutory remedy and also that his clients could be considered “private attorneys general,” for which there is a carve-out in the contract.
O’Connell then turned to the potentially landmark task of defining what constitutes a “blackout” and whether not being able to “see every game everywhere” is really a restriction on output. The NFL and DirecTV argue that every single professional football game is available to watch every week somewhere and multiple games are available each week for free everywhere — therefore there really is no blackout. The plaintiffs argue that isn’t good enough, and there should be a way for consumers to access the specific out-of-market games they want to see no matter where they are without paying the Sunday Ticket premium.
The NFL and DirecTV also argue that the plaintiffs lack standing to sue, because they’re not in the business of licensing, producing or distributing football games. The judge agreed that if the horizontal agreement that pools licensing rights for each NFL club and the vertical agreement that gives DirecTV exclusive distribution rights are considered separately — as is the norm for antitrust cases — it appears the plaintiffs don’t have standing. However, O’Connell is considering the plaintiffs’ argument that these are a “web of agreements” that can’t be separated for consideration.
In other entertainment law news:
— A Christmas sweater that spoofs a Kim Kardashian West photo is at the center of a copyright infringement lawsuit. In the image, Kardashian West is holding a bottle of champagne and is defying gravity by pouring it up over her head and into a glass that’s balanced on her rear end. The Christmas version is similar, but with Santa and milk. Tipsy Elves, which designed the sweater, is suing Macy’s for selling an alleged rip-off of its design made by Mighty Fine, an apparel company that is also being sued. According to the complaint, Tipsy Elves informed Macy’s of the issue and asked the retailer to remove the knock-offs from its stores and website, but it hasn’t yet complied. (Read the complaint in full here.)
—The Weinstein Co. dealmaker David Glasser will be spending the day after the Academy Awards in court. Gunnlaugur Petur Erlendsson sued Glasser in 2012 to collect on a 2011 summary judgment awarded in his favor in New York. According to court records, Glasser guaranteed a corporate loan for 300,000 euros to Hi-Def Entertainment which resulted in a default. The court hearing seeks to force Glasser to repay the debt, which is now upwards of $1 million.
— Former ESPN tennis commentator Doug Adler is suing the sports network for wrongful termination after he was fired for allegedly making racist comments about Venus Williams during the 2017 Australian Open, according to a complaint filed Tuesday in Los Angeles County Superior Court. “Adler described Venus Williams using ‘guerrilla’ tactics, a description that is commonly used in tennis to describe a form of aggressive play,” states the complaint. “ESPN bowed to pressure from those using social media, including Twitter, who mistakenly believed Adler used the word ‘gorilla’ to describe Venus Williams.” Adler says he’s been shunned since his firing and is also pursuing a claim for intentional inflection of emotional distress. (Read the full complaint here.)
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