Class-Action Lawsuit Against NFL Sparks Judicial Frustration
LOS ANGELES — On Tuesday, U.S. District Judge Philip Gutierrez, overseeing the class-action lawsuit filed by "Sunday Ticket" subscribers against the NFL, expressed his mounting frustrations with the plaintiffs' attorneys. The lawsuit, which encapsulates the grievances of 2.4 million residential subscribers and 48,000 businesses, claims the NFL violated antitrust laws, charging inflated prices for the package of Sunday games aired on CBS and Fox.
A Simple Premise
Before Dallas Cowboys owner Jerry Jones took the stand for a second day of testimony, Judge Gutierrez emphasized the straightforward nature of the case. He pointed out the frustration of a Seattle Seahawks fan living in Los Angeles, unable to watch their favorite team without purchasing a subscription for all Sunday afternoon out-of-market games.
The lawsuit alleges that the NFL unlawfully restricted competition by offering "Sunday Ticket" exclusively through a satellite provider. The plaintiffs argue that the league's antitrust exemption for broadcasting only covers over-the-air broadcasts, not pay TV. The NFL, on the other hand, staunchly maintains its right to sell "Sunday Ticket" under the said exemption.
Enormous Stakes at Play
Should the NFL be found liable, a jury could award damages up to $7 billion, which could potentially triple to $21 billion under antitrust laws. This high-stakes scenario underscores the critical nature of the case and the significant frustration Judge Gutierrez has expressed toward the plaintiffs' presentation.
Judicial Frustration Mounts
Monday's proceedings saw Judge Gutierrez admonishing the plaintiffs' attorneys for repeatedly rehashing past testimony, which he labeled a waste of time. His concerns continued into Tuesday, where he expressed doubts about the relevance of citing Jerry Jones' 1995 lawsuit against the NFL. This previous lawsuit, which contested the league's licensing and sponsorship procedures, had settled out of court and, in Gutierrez's view, appeared tangential to the current issues.
Nonetheless, Jerry Jones testified on Tuesday, confirming his belief that teams should not sell their out-of-market television rights as it "would undermine the free TV model we have now." This statement sheds light on the intricate balance the NFL attempts to maintain between network contracts and additional revenue streams.
Industry Perspectives
Adding another layer to the case, retired CBS Sports chairman Sean McManus took the stand to express his long-standing opposition to "Sunday Ticket" and the NFL's Red Zone channel. McManus argued that "Sunday Ticket" infringes on the exclusivity CBS enjoys in local markets. He revealed that both CBS and Fox had during negotiations requested that "Sunday Ticket" be marketed as a premium package.
DirecTV, not the NFL, was responsible for setting prices during the class-action period. The NFL's television contracts with CBS and Fox mandated 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." Additionally, these contracts prohibit selling individual games on a pay-per-view basis.
From 1994 through 2022, DirecTV paid the NFL a rights fee for the package. Starting last year, Google's YouTube TV acquired "Sunday Ticket" rights for seven seasons. During a deposition, DirecTV marketing official Jamie Dyckes emphasized that MLB, the NBA, and the NHL provided a suggested retail price for their out-of-market packages and engaged in revenue sharing across multiple platforms, highlighting a difference in how these leagues manage similar products.
Proceedings Continue
As the trial progresses, Judge Gutierrez has not veiled his frustration. He candidly admitted, "I'm struggling with the plaintiffs' case," expressing that "The way you have tried this case is far from simple." His discontent was palpable as he described the case proceedings as “25 hours of depositions and gobbledygook,” adding, "This case has gone in a direction it shouldn't have gone."
Testimony is expected to continue on Thursday, with closing statements slated for early next week. Judge Gutierrez has also mentioned the possibility of invoking a rule that allows the court to find that a jury lacks sufficient evidence to rule for a party in a case, a move that could significantly sway the trial's outcome.
As both sides strive to fortify their arguments, the courtroom remains under intense scrutiny. The central question persists: can the plaintiffs' attorneys distill their case into a compelling, straightforward argument that meets Judge Gutierrez's expectations, or will the NFL emerge victorious in defending its long-standing "Sunday Ticket" model?