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The 2nd U.S. Circuit Court of Appeals won’t intervene in an antitrust lawsuit that has the potential of shaking up the way that professional sports games are packaged and distributed.
Last August, U.S. District Judge Shira Scheindlin issued a surprising decision in a proposed class-action lawsuit brought by fans of Major League Baseball and the National Hockey League upset at the high cost of out-of-market games on television and digital blackouts for in-market games. She rejected defendants’ summary judgment motion and also decided that MLB’s nearly century-old antitrust exemption doesn’t apply to television broadcasting rights.
Aghast, MLB asked the judge for permission for an interlocutory appeal — one before trial — and when she refused, the league sought a writ of mandamus to get the 2nd Circuit’s permission for an appeal anyway. The league seemed to be bolstered by a favorable outcome on January 15 at the 9th Circuit that interpreted its antitrust exemption with wide scope.
But on Wednesday, the 2nd Circuit came out with its order to deny MLB a chance to immediately appeal because it hadn’t “demonstrated that exceptional circumstances warrant the requested relief.”
At the district court level in New York, proceedings have continued and both sides are gearing up for a hearing next month over whether the judge should certify a class action.
The plaintiffs contend in a lawsuit that also names Comcast and DirecTV as defendants that there’s enough commonality among those “overcharged for their out-of-market package” to certify a class while the leagues suggest the harm is on an individualized basis and that fans of distant teams might not even be able to see their favorite teams on television if it wasn’t for the deals the league has been making with regional sports networks and national cable and satellite TV distributors.
As the antitrust lawsuit proceeds toward trial, it will also examine issues of contract exclusivity and the Internet distribution of games, and while the judge decided not to give the leagues and TV companies a pre-trial victory in the lawsuit, the plaintiffs still have work ahead of them. In the August ruling, the judge wrote, “It is not immediately clear whether the restrictions help or harm competitive balance overall.”
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