What the $4.8 billion NFL Sunday Ticket ruling means for football fans

Simone Del Rosario:

What’s the cost of the NFL Sunday Ticket in 2024? Well, for the league it’s nearly $4.8 billion.

That’s how much a federal jury in California awarded plaintiffs in a class-action antitrust lawsuit over how the league handled out-of-market broadcasts as part of the package.

The verdict stems from a 2015 complaint from the Mucky Duck, a California sports bar that claimed the league violated antitrust laws by bundling all out-of-market games together, making it impossible to buy a package that featured just one team.

For instance, say you’re a lonely Los Angeles Chargers fan in the heart of Ohio. You might get the Cincinnati Bengals or Cleveland Browns games on your local Fox or CBS affiliate … But you would have to buy Sunday Ticket to get access to the whole slate of NFL just to watch your beloved Bolts.

Getting down to the nuts and bolts of the damages: Of the $4.8 billion, $4.7 billion goes to residential subscribers, while nearly $100 million goes to commercial users like the Mucky Duck. Under federal antitrust laws, those sums could be tripled to more than $14 billion if the judgment is upheld. That works out to around $450 million per team.

The league has promised to appeal the decision, and this case could end up before the Supreme Court. Even the federal judge in question didn’t like the way this case went.

Joining me now to discuss is Nelly, Drew director of the University of Buffalo Center for the Advancement of sport, and Professor of Practice in sports law. Nelly, we are about to enter a lengthy appeals process, so let’s figure this out. What does this mean for fans out there who might think that this ruling could give them better access to their favorite teams games right away?

Nellie Drew: Oh, that’s not going to happen this season. The NFL is already committed to an appeal. It will no doubt be a lengthy one. There is a possibility for certain post-trial motions, so we’ll have to see those go. But the challenge always with antitrust cases is that they are so complex, and as we know, litigation doesn’t exactly move at lightning speed, anyhow, so this is going to take a while to be parsed out.

Simone Del Rosario: This was a jury trial, but the federal judge in this case did not love where the plaintiffs were going during their arguments. I have a quote that I use specifically because of one word in it, so I think you probably already know which one I’m going for here. He said the case has turned into 25 hours of depositions and gobbledygook. This case has gone in a direction it shouldn’t have gone. Could the federal judge throw out the verdict and side with the NFL?

Nellie Drew: Oh, I suppose it’s possible. There’ll probably be a motion to overturn the verdict for sure. What does that mean as a practical matter? Well, took the jury. What was it less than three hours to come to this conclusion. That’s a pretty significant statement. It’s not like they were on the on the edge of not going the other way. I am actually amazed that we went as far as we did. My colleague, Christine Bartholomew, who’s an antitrust expert has mentioned the fact that it’s rare for antitrust cases to go all the way to trial and for this one to have completed, it’s just mind boggling to me, absolutely mind boggling.

Simone Del Rosario: What does this mean for the nfl’s antitrust exemption? They argue that this falls under it that allows the league to package games and sell them to networks. The plaintiffs were arguing that it only applies to over the air broadcast. Pay TV, like satellite. I’m so curious. It’s a new world we’re living in. So what does that mean?

Nellie Drew: So, this is not new law. So the sports broadcasting exemption goes back to Richard Dixon wine to watch the, then Washington Redskins on TV, quite honestly. I mean, that’s how old this is and and the sports broadcasting exemption Act specifically was drawn for over the air broadcasts, and that was emphasized very heavily. And you also have to remember that as a matter of practice, the courts construe any exemptions to the antitrust laws extraordinarily narrowly. The idea is that the antitrust framework is supposed to be inclusive, as much as possible, and any exemptions are supposed to be very, very narrow and very, very specific, which is what the sports broadcasting act is. And if you review the legislative history of the sports broadcasting act, that is very, very clear. So I was quite honestly, very surprised to see the NFL take that position, although I guess there’s not much else I could possibly say well,

Simone Del Rosario: And it’s assuming that that’s just going to continue in a different form. What do we do now with that, given how the like television streaming, what this all looks like. It’s so different than it was in the 60s?

Nellie Drew: it’s a very different context, since Richard Nixon’s days, right? But, but having said that, the underlying point is access and so I’m not much of an NFL fan you are, but the complaint I heard for a number of people over the course of the past year is, it’s gotten to a point where you have to own multiple platforms be able to follow your team. And so it’s almost going the other way. And and part of me also wonders, just as a practical matter, when is the NFL going to realize that the lifeblood of the league, and the source of all its revenue is the fans. So if the fans aren’t able to consume the product they want to consume, eventually they’re going to go like, ‘maybe soccer is better’, right?

Simone Del Rosario: Is this going to have an effect on cable companies that rely on bundled packages?

Nellie Drew: Yes, although how that’s going to play out remains to be seen. It depends upon what the ultimate outcome of this is, right? And was interesting, too. As you may have read that, you know, the NFL tried to posit this as a premium subscription, right? This is only for a very small portion of our fan base, when in reality given the society we live in now… I’ve got seven kids, half of them are out of the area and adore the Buffalo Bills, but they can’t watch them on a regular basis under the current construct, right?

Simone Del Rosario: Let me ask you this. Then, did the NFL mess up in its arguments? You know, on the stand? Goodell called it a supplemental package for the biggest fans, just like you said. But the NFL Sunday Ticket they they pitched it basically as this place to watch your favorite teams. Did they mess up and how it was all communicated for the past couple of decades? Really

Nellie Drew: well. I think the challenge for the NFL council was that the advertising messaging, was one thing, and then they had to try to spin it a different way when they got into court. And antitrust counsel, which is always there in league meetings because almost everything the league does, has potentially some antitrust implications. We know now, in the wake of the Supreme Court case some years ago, that for sure, when each of the teams in the league discusses anything with any other team. You have the potential for Section One Sherman Act violation, because you have two potential competitors collaborating. Now, some of this collaboration is necessary for the league to function that’s been recognized by the courts, right? You know, somebody has to set the schedule, somebody has to agree upon what the rules are going to be, what the new kickoff rule is going to be, for example, right? That type of collaboration is generally speaking allowed under the antitrust laws. It’s when you’d use that position, and combine that with sort of monopoly, if you will, that the NFL has over its product to extract unreasonable profits. That’s when you start running into trouble. And the key here was that consumer choice was definitely being constrained by this artificial construct.

Simone Del Rosario: Let’s talk about consumer choice. I know this isn’t really a legal question. It’s definitely more of a business question. But do you think if the NFL were to pitch this product by individual teams, I get to pay for just the Chargers. I get to watch every chargers game from wherever in the country I am. Don’t you think that would be a very, very popular product.

Nellie Drew: It is. But the challenge then is, what does that do to the broadcast partners? And that’s their bread and butter they’re trying to protect there, right? I mean they have this… It’s greed, right? They wanted to use the Sunday Ticket to extract an extra little bit, but in the process, they know that they have to protect their broadcast partners. Because, you know, my kids in Boston aren’t watching the Patriots. They’re watching the bills, if they can get them right? And so that’s the challenge.

Simone Del Rosario: All right. Thank you so much. Nelly Drew, professor of practice and sports law, really appreciate your insight on this. I know a lot of football fans are watching this one.

Nellie Drew: We are. Thank you so much.