N.F.L. Ordered to Pay Billions in Sunday Ticket Lawsuit
The N.F.L. is now a $20 billion business, and its success is due in part to the sharing of its media rights deals.
The N.F.L. must pay almost $5 billion in damages for artificially inflating the price of Sunday Ticket, a subscription service offered by DirecTV that showed out-of-market games, a federal jury in Los Angeles decided on Thursday.
The verdict, which capped a monthlong class-action trial and almost a decade of legal wrangling, includes about $96 million in damages for the bars and restaurants that subscribed to the service, and more than $4.6 billion for roughly 2.4 million residential subscribers. Damages in antitrust cases like this are tripled by law, which means the league may have to pay more than $14 billion.
The jury’s damages were most of what the plaintiffs lawyers were seeking. “It’s a great day for consumers everywhere,” said Bill Carmody, one of the plaintiffs’ lawyers.
The N.F.L. is expected to appeal the verdict.
“We are disappointed with the jury’s verdict today in the N.F.L. Sunday Ticket class action lawsuit,” Brian McCarthy, a league spokesman, said in a statement. “We will certainly contest this decision as we believe that the class action claims in this case are baseless and without merit.”
U.S. District Court Judge Philip Gutierrez, who openly admonished the plaintiffs’ lawyers during the trial, will hear post-trial motions next month. He could, in theory, decide that the jury reached an improper verdict. An appeals court could also alter the size of the damages.
Still, the verdict poses a substantial risk to the league, which is a $20 billion juggernaut in large part because of its media deals.
“Juries are inherently unpredictable, but any time there’s a ruling against a sports entity, it’s significant because leagues rarely takes these cases all the way to trial,” said Gabriel Feldman, the director of the sports law program at Tulane University.
The civil case cut to the heart of the league’s media distribution strategy, which for more than a half-century has been based on negotiating contracts with networks on behalf of all 32 teams. More than 90 percent of N.F.L. games are shown on free over-the-air television in the markets of the teams in the games, and many other games are shown in prime time on national networks. The league’s contracts with CBS, Fox, NBC and other broadcasters generate more than $10 billion a year.
Sunday Ticket was a unique product because it packaged out-of-market games already being shown by CBS and Fox and resold them to fans for about $300 a season. The plaintiffs argued that the price was deliberately inflated to limit the number of subscribers. The plaintiffs’ lawyers pointed to an email to N.F.L. executives from ESPN that said the cable sports network was willing to offer Sunday Ticket for only $70 and sell single-team packages.
The league spurned the offer and stuck with DirecTV until 2022, when it struck a new deal with YouTube TV.
During the trial, the league acknowledged that CBS and Fox would be hurt if Sunday Ticket attracted too many subscribers. Commissioner Roger Goodell, who testified last week, said the service was priced as a premium product.
The jury — and many fans — contend that the league can and should offer its games at a lower price, and with more flexible options, like team-only packages. Feldman, the Tulane professor, said the N.F.L. would likely on appeal restate its case that while it negotiates contracts collectively, it is pro-consumer because it offers so many games over-the-air for free.
The N.F.L. will argue that “we are not like Coke and Pepsi, we are more like Coke and Coke Zero,” Feldman said. “We are part of the same company and part of the same goals.”