The NFL’s Gamble on Sunday Ticket Antitrust Trial Appears to be Paying Off

The NFL’s decision to take the Sunday Ticket antitrust lawsuit to trial instead of settling is looking like a smart move. Impressions from the courtroom suggest that the league’s gamble is paying off, with U.S. District Judge Philip Gutierrez expressing skepticism about the plaintiffs’ case.

The NFL’s Sunday Ticket service is at the center of the antitrust lawsuit.

According to journalists attending the trial, Gutierrez has repeatedly questioned the plaintiffs’ arguments, even suggesting that he might grant a motion for judgment as a matter of law. This would mean that the judge believes no reasonable jury could reach a different conclusion.

The core antitrust question presented by the lawsuit is whether individual NFL teams can agree to license their broadcasts without competing with each other. NFL teams are competing businesses, and antitrust law ordinarily demands that competitors compete. Instead of a world where, for example, the Chicago Bears license their broadcasting rights to a TV station in San Diego, the Bears and the 31 other teams agree to pool their broadcasting rights through the Sunday Ticket.

The NFL’s 32 teams are competing businesses that agree to pool their broadcasting rights.

The pooling of broadcasting rights has been good for local fans, who can generally watch their favorite NFL team without having to subscribe to cable or a paid satellite service. However, out-of-town NFL fans need to pay for the Sunday Ticket service, which is available through YouTube TV for $349/year.

The class action lawsuit, which began nine years ago, is on behalf of more than 2.4 million residential subscribers and more than 48,000 restaurants, bars, and other commercial establishments that purchased Sunday Ticket. Potential damages could top $20 billion.

The NFL’s decision to go to trial indicates that the league has high confidence it will prevail. The league rarely goes to trial, and if it is unable to get a case dismissed, it has the financial wherewithal to negotiate settlements.

Cowboys owner Jerry Jones has testified in the trial, facing questions about his team’s litigation against the NFL in the 1990s involving sponsorship contracts.

The NFL has argued that the Sports Broadcasting Act of 1961, a law that exempts professional football, basketball, baseball, and hockey leagues from antitrust scrutiny when they negotiate a national TV contract with a network that provides “sponsored telecasting” (meaning free and over-the-air) of games, applies. Although the Sunday Ticket, as a paid service, isn’t itself protected by the SBA, it’s part of a larger TV arrangement that includes fans watching over-the-air NFL home games for free.

The trial is expected to conclude early next week, and assuming Gutierrez sends the case to the jury, it remains to be seen how jurors decide. The NFL is likely optimistic that not cutting a deal to make the case go away will prove to be the right move.

The NFL has no peer when it comes to broadcasts. Last year, the NFL accounted for 93 of the year’s 100 most-watched TV broadcasts in the U.S.