LOS ANGELES (CN) — The National Football League on Thursday was hit with a $4.7 billion jury verdict in a case brought by a Sunday Ticket subscriber who claimed the league conspired with distributor DirecTV to charge inflated prices for the bundle.
A Los Angeles jury returned its verdict Thursday afternoon after deliberating for less than one day. They awarded about $4.6 billion in damages to residential Sunday Ticket subscribers over a 12-year period, as well as $96 million to commercial subscribers.
Under U.S. antitrust law, damages are automatically trebled — putting the NFL on the hook for more than $14 billion unless the league gets the verdict reversed.
"Justice has been done," Bill Carmody, one of the attorneys representing the subscribers, said after the verdict was read. "It's a great verdict for consumers."
Beth Wilkinson, the NFL's lead lawyer, declined to comment.
Subscribers who purchase the NFL's Sunday Ticket package are able to watch all NFL games played on Sunday afternoons. DirecTV distributes the Sunday Ticket product, while CBS and Fox affiliates broadcast local games.
During a three-week trial, subscribers claimed that the NFL — working with DirecTV, CBS and Fox — conspired to control the price charged for the Sunday Ticket bundle.
Citing internal meeting agendas and emails from NFL, CBS and DirecTV executives, plaintiffs argued the NFL was limiting output of so-called out-of-market Sunday games to safeguard the stream of advertising dollars — and to ensure the networks paid the NFL top dollar for exclusive rights to those games.
Subscribers said the league balked at every attempt by DirecTV to lower Sunday Ticket prices. When the NFL negotiated a new deal for its Sunday Ticket bundle with streaming services and other TV providers a few years ago, they said, the league also rejected an ESPN proposal to charge subscribers just $70 a season — or to offer consumers the option to only subscribe to the team they were interested in.
Instead, the NFL made a deal with Google's YouTube TV, which costs $349 for an add-on subscription on top of the price of YouTube TV.
NFL Commissioner Roger Goodell defended the league’s broadcast strategy at trial, telling jurors that the league’s exclusive deals with CBS and Fox to broadcast the Sunday afternoon games for free is a crucial part in the NFL’s success in growing its fan base.
The Sunday Ticket package, he said, had always been geared towards avid fans who want to watch more football than is available through their local CBS and Fox affiliates.
“We want to reach the largest audience we can, preferably on free TV,” Goodell said.
According to commissioner, the league didn’t want the Sunday Ticket subscription package to undermine TV network broadcasts.
The networks, he said, invest a lot of money in producing high-quality and innovative broadcasts with the best announcers — and the vast majority of fans will be able to see all their hometown teams’ games for free. The revenue from the licensing agreements is shared equally by the teams, Goodell said, which helps keep a competitive balance among them and produces the close and competitive games fans want to see.
The NFL initially won dismissal of the case in 2017, after a different judge agreed with the league that subscribers hadn't made a plausible case that the exclusive distribution deal with DirecTV harmed competition.
The Ninth Circuit found differently and reversed that decision. After the U.S. Supreme Court passed on the opportunity to take up the case in late 2019, the subscribers' claims ended up back in the lower court.
If the more than $14 billion verdict is upheld, the NFL will almost certainly appeal.
On that front, league officials may find encouragement in an observation made by Justice Brett Kavanaugh earlier in this case.
Pointing out that the Supreme Court's decision not to hear the case shouldn't necessarily be viewed as agreement with the legal analysis of the Ninth Circuit, Kavanaugh said the plaintiffs' argument that antitrust law could require each NFL team to negotiate an individualized contract for televising only its own games was in "substantial tension" with antitrust principles and precedents.
"The NFL and its member teams operate as a joint venture," Kavanaugh said. "Antitrust law likely does not require that the NFL and its member teams compete against each other with respect to television rights."
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