The NFL’s $4.7 Billion Ruling: A Game-Changer for the League and Its Teams?
The NFL has rarely been a loser on the field, but a lopsided blowout in an antitrust lawsuit could change how the world’s richest sports league generates and distributes billions of dollars in revenue every year. A Los Angeles jury on Thursday sided with fans who claimed the league conspired with DirecTV to raise the price of subscriptions to watch games broadcast out of their team’s home market. The $4.7 billion in damages could be tripled under federal law.
The NFL’s revenue target of $25 billion by 2027 may be in jeopardy.
A Power Shift in the Making
The verdict is a shock to how sports are offered to consumers, and a major blow to the NFL, so used to having the Midas touch. Even though it will appeal, the league has to plan for the potential costs of losing. The NFL has kept its members happy by signing massive TV deals that make everyone rich. The NFL will get $110 billion from its 11-year TV deal signed in 2021.
The NFL’s Sunday Ticket package has been a cash cow for the league.
If the verdict stands, teams could be granted the opportunity to sell their local rights and out-of-market games on cable or even a streaming service. The temptation could be strengthened if the NFL tried to pass on the cost of the fine to each team — a potential hit that could be anywhere from $150 million to $450 million.
YouTube replaced DirecTV as the home of Sunday Ticket in 2023, paying the NFL $2 billion a year.
A New Era for the NFL?
The next issue — assuming the verdict isn’t overturned — could be a power shift between the NFL and its teams. The NFL has always been special. In 1961, Congress passed the Sports Broadcasting Act, after a US district court ruled the NFL was breaking antitrust rules by pooling rights in a deal with CBS.
Dallas Cowboys owner Jerry Jones is arguably the architect of the NFL being funded by TV revenues.
The Act allowed the NFL to bundle all the teams’ rights together to make the league economically viable. But the Mucky Duck lawsuit focused on whether the NFL broke antitrust laws with the Sunday Ticket package offered by DirecTV, a satellite provider.
The NFL’s 32 teams could be granted more control over their local rights and out-of-market games.
If the verdict stands, it could create more opportunity for people to view the NFL product. But it’s hard to know how much cash the NFL has, as a private company, it doesn’t share its finances. Back in 2010, NFL Commissioner Roger Goodell set a revenue target of $25 billion by 2027.
The NFL’s revenue target of $25 billion by 2027 may be in jeopardy.
The verdict is a shock to how sports are offered to consumers, and a major blow to the NFL, so used to having the Midas touch. Even though it will appeal, the league has to plan for the potential costs of losing. The NFL has kept its members happy by signing massive TV deals that make everyone rich. The NFL will get $110 billion from its 11-year TV deal signed in 2021.
The NFL’s 32 teams could be granted more control over their local rights and out-of-market games.
The NFL’s $4.7 billion ruling is a game-changer for the league and its teams. It’s hard to know how much cash the NFL has, as a private company, it doesn’t share its finances. But one thing is certain, the NFL will have to plan for the potential costs of losing.
