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The U.S. Supreme Court won’t review an antitrust case that could have outsized influence on the future of the television industry. On Monday, the high court announced it wouldn’t be hearing National Football League v. Ninth Inning, a lawsuit against the professional football league that challenges how teams currently pool telecast rights and collectively negotiate a licensing package for out-of-market games.
The lawsuit comes from bars, restaurants and other retail establishments who say they are paying supracompetitive prices for DirecTV’s “Sunday Ticket.” But for alleged collusion and other restrictions, these plaintiffs believe that the NFL’s 32 teams might compete with each other by streaming games. In Aug. 2019, the 9th Circuit Court of Appeals surprised many observers by reviving the case. Afterwards, the NFL petitioned for review at the Supreme Court.
Within the next couple of years, the NFL’s current TV deals expire. The league will likely garner hundreds of billions — perhaps trillions — of more dollars selling a product that garners the biggest ratings on television. Those negotiations will take place with a huge legal showdown in the background.
At a time when more and more consumers continue to cut the cord, live football telecasts are also perhaps the reason for not wholesale and immediate revolution.That could change. As the 9th Circuit concluded, “Defendants have failed to identify, and we are unaware of, any binding precedent requiring the teams and the NFL to cooperate in order to produce the telecasts.”
The NFL, which suffered a big legal defeat a decade ago when the Supreme Court held that teams were capable of conspiring with each other in licensing, believes the lower appeals court should have recognized the pro-competitiveness of its joint venture. A petition nodded to the Supreme Court’s 1984 holding that the NCAA’s TV rights restraints violated antitrust law.
“The panel read NCAA to stand for the proposition that no legal or practical constraint ‘requir[es] the teams and the NFL to cooperate in order to produce’ NFL game telecasts,” states the NFL’s cert petition. “Accordingly, the panel (i) held that the Sunday Ticket licensing arrangements could be deemed a ‘naked’ restriction on output, (ii) excused plaintiffs from their burden to plead injury to competition, and (iii) held that ‘plaintiffs were not required to establish a relevant market.’ NCAA, however, did not involve an economically integrated venture that created, licensed, or distributed a joint venture product. This is a critical distinction.”
The NFL will try to offer its pro competitive justifications later in this case — perhaps at trial. But it won’t immediately be going to the high court. Justice Kavanaugh offered a statement on the denial. He appears inclined to accept the NFL’s joint venture argument and additionally is skeptical of the plaintiffs’ standing in the case. He wrote, “In sum, the defendants—the NFL, its teams, and DirecTV—have substantial arguments on the law. If the defendants do not prevail at summary judgment or at trial, they may raise those legal arguments again in a new petition for certiorari, as appropriate.”
Today’s announcement is also notable as it represents Justice Amy Coney Barrett’s first day on the bench. She will be hearing U.S. Fish and Wildlife Service v. Sierra Club, which examines whether a federal agency’s draft document is exempted from disclosure under the Freedom of Information Act.
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