Judge Expresses Frustration in 'Sunday Ticket' Antitrust Case Against NFL
LOS ANGELES -- The federal judge overseeing the high-profile class-action lawsuit filed by "Sunday Ticket" subscribers against the NFL voiced his frustrations Tuesday regarding the performance of the plaintiffs' attorneys. Before Dallas Cowboys owner Jerry Jones took the stand for a second day of testimony, U.S. District Judge Philip Gutierrez emphasized the straightforward nature of the case.
Subscriber Challenges
Judge Gutierrez illustrated the simplicity of the case by highlighting the frustration of a Seattle Seahawks fan residing in Los Angeles who cannot watch their favorite team without purchasing a subscription for all the Sunday afternoon out-of-market games. The class-action lawsuit represents 2.4 million residential subscribers and 48,000 businesses who bought the package of out-of-market games from the NFL for the 2011 through 2022 seasons.
The lawsuit alleges that the NFL violated antitrust laws by selling its package of Sunday games aired on CBS and Fox at inflated prices. Moreover, the subscribers contend that the NFL restricted competition by offering "Sunday Ticket" exclusively through a single satellite provider.
The NFL staunchly defends its right to sell "Sunday Ticket" under its antitrust exemption for broadcasting. However, the plaintiffs argue that this exemption only applies to over-the-air broadcasts and does not extend to pay TV.
Potential Consequences
If the NFL is found liable, a jury could award up to $7 billion in damages. This figure could potentially triple to $21 billion, as antitrust cases can result in treble damages. Tuesday was not the first instance of Judge Gutierrez expressing frustration with the plaintiffs' legal team. On Monday, he reprimanded their attorneys for excessively recounting past testimony, which he deemed a waste of time.
Historical Context
As Jerry Jones resumed his testimony, Judge Gutierrez expressed skepticism about the relevance of the plaintiffs' attorneys citing Jones' 1994 lawsuit against the NFL. That lawsuit challenged the league's licensing and sponsorship procedures, although Jones supported the league's television contract negotiation model and revenue-sharing agreements. The lawsuit was eventually settled out of court.
When questioned on Tuesday about whether teams should be able to sell their out-of-market television rights, Jones replied that they should not, arguing that it "would undermine the free TV model we have now."
Network Objections
Former CBS Sports chairman Sean McManus also testified, reiterating his long-standing opposition to the "Sunday Ticket" and the NFL's Red Zone channel. McManus claimed that "Sunday Ticket" infringes on the exclusivity CBS holds in local markets, and that both CBS and Fox requested during negotiations that "Sunday Ticket" be sold as a premium package. Notably, it was DirecTV, not the NFL, that set the prices during the period covered by the class-action lawsuit.
The NFL's television contracts with CBS and Fox include language specifying that "resale packages (Sunday Ticket) are to be marketed as premium products for avid league fans that satisfy complementary demand to the offering of in-market games." Additional clauses in these contracts prohibit selling individual games on a pay-per-view basis.
Transition to New Provider
From 1994 through 2022, the NFL received a rights fee from DirecTV for the "Sunday Ticket" package. Starting last year, Google's YouTube TV acquired "Sunday Ticket" rights for seven seasons. During a deposition, DirecTV marketing official Jamie Dyckes noted that MLB, the NBA, and the NHL had a suggested retail price for their out-of-market packages and that there was revenue sharing between the leagues and the carriers, as their packages were distributed across multiple platforms.
Upcoming Testimony
Testimony in the case will continue Thursday, with closing statements scheduled for early next week. Judge Gutierrez has hinted that he might consider invoking a rule that allows the court to conclude that a jury lacks sufficient evidence to rule in favor of a party in the case.
Judicial Frustration
Throughout the proceedings, Judge Gutierrez has been candid about his frustrations. "I'm struggling with the plaintiffs' case," he admitted. His comments frequently underscored his mounting exasperation, as he noted, "The way you have tried this case is far from simple." He also remarked, "This case has turned into 25 hours of depositions and gobbledygook," adding, "This case has gone in a direction it shouldn't have gone."
As the case progresses, keen observers will be closely watching the courtroom to see if the plaintiffs' attorneys can present a compelling argument that aligns with the straightforward premise Judge Gutierrez initially outlined.