9:50am PT by Eriq Gardner
CBS, Fox, NBC, ESPN Escape Antitrust Lawsuit Over NFL Broadcast Deals
Four major broadcasters with rights to televise NFL games got some good news on Friday when they were dropped from an antitrust lawsuit claiming collusion in the way that professional football broadcast deals have been set up. The putative class action alleging that DirecTV "Sunday Ticket" customers suffer from anti-competitive pricing and restrictive supply continues to rage, but only the NFL, its teams and the satcaster will have to defend it moving forward.
Beginning last summer, Sunday Ticket was the subject of more than a dozen lawsuits including one brought on behalf of bars and restaurants paying as much as $120,000 per year to show its patrons games. The legal onslaught occurred after plaintiffs in a similar case against the MLB, the NHL and their regional sports network partners experienced success via a certification of a class action and settlements.
As a result of the flurry of lawsuits, the "Sunday Ticket" cases were consolidated as part of the multidistrict litigation (MDL) process. Since then, the various plaintiff attorney law firms have been fighting amongst themselves about who would be leading the charge.
In May, the judge settled that issue by deciding which four firms — Hausfeld; Susman Godfrey; Robins Kaplan; and Langer, Grogan & Diver — would be acting as co-lead plaintiffs' counsel. Five other firms including Cohen Milstein were relegated to a steering committee.
That was significant because it was Cohen Milstein that brought the lawsuit that named CBS, NBC, Fox and ESPN as co-defendants, accusing them of participating in the alleged conspiracy by insisting on things like Sunday Ticket being capped at a certain number of subscribers annually and determining which games will be broadcast at a certain time. The fact that broadcast and cable networks were brought into the fold was actually a point made by Cohen Milstein in its attempt to oppose consolidation, but the effort wasn't successful.
On Friday, an amended consolidated complaint was filed and it revealed that CBS, NBC, Fox and ESPN weren't going to be named defendants. Instead, it's the NFL and DirecTV bearing the brunt. That's not to say, though, that the outcome of the dispute won't impact the broadcasters (who may also be subject to discovery demands for contracts and communications). In fact, there remains ample discussion in the lawsuit of the various broadcaster deals and what has and hasn't been allowed.
To the professional football league, the amended complaint states, "No other major sports league in America has such a drastic, total elimination of competition in the broadcasting of its games. While Major League Baseball ('MLB'), the National Hockey League ('NHL'), and the National Basketball League ('NBA') have each allocated markets geographically and pooled so-called out-of-market rights, none has agreed to centralize control and sale of all broadcast rights."
It's argued that if teams were allowed to make deals on their own, there would be more games broadcast through internet streaming and satellite and cable carriage at competitive prices. Instead, the teams work through the league (a subject examined in the 2010 Supreme Court ruling American Needle v. National Football League, which held that NFL teams are capable of conspiring when making licensing deals) and make a package arrangement with DirecTV.
There may very well be solid defenses to the claims including the Sports Broadcasting Act of 1961, but given professional football's place as one of the most valuable properties on television, one that helps preserve the establishment over any rush towards cord cutting, the legal game afoot is a must-watch.
Here's the consolidated amended complaint: