LOS ANGELES — The NFL was exploring a world without “Sunday Ticket” in 2017, where cable channels would air Sunday afternoon out-of-market games not shown on Fox or CBS.
The league memo was shown by plaintiffs during their closing arguments Wednesday as the jury in the class-action lawsuit filed by “Sunday Ticket” subscribers began deliberations.
After receiving instructions from U.S. District Judge Philip Gutierrez, the jury heard the plaintiffs’ closing statement in the morning. Following lunch, the NFL gave its final remarks before the plaintiffs had 20 minutes for rebuttal.
The jury met for 90 minutes before wrapping up for the day. Deliberations will continue Thursday.
In a trial that has lasted three weeks and featured testimony from NFL commissioner Roger Goodell and Dallas Cowboys owner Jerry Jones, the April 21, 2017, memo — titled the “NFL New Frontier” — provided one of the biggest highlights.
The memo was a reimagining of Sunday afternoons in which every game would be on a broadcast or cable network. Fox and CBS would have paid 25% less per game (approximately $10 million per game) while cable networks would have paid $9 million per game, which was the average doled out by DirecTV in its contract with the league.
The figures were for the rights that expired after the 2022 season. Those averages would be higher now with agreements that started last season.
The league memo showed early games on FS1, ESPN, ESPN2, TBS, TNT, NFL Network and CBS Sports Network with late games on FS1, TBS and TNT.
Bill Carmody, one of the plaintiffs’ attorneys, called the memo “one of the hottest documents in the case” during his closing arguments.
“It’s so important because this is a document that says everything that our damages model is based upon the NFL looked at and approved of, and in real life, behind the scenes,” Carmody said. “What the NFL’s talking about here … is they’re talking about moving forward with the same network games on Fox and CBS, but, instead of a subscription, why don’t we put it on basic cable? That’s what we’re talking about. Lose the subscription price, compete, be fair, let’s see what happens.”
Some of the out-of-market games under the NFL’s memo, though, would not be on basic cable. Fans and cable companies would also absorb some of the costs through higher subscription fees.
The lawsuit covers 2.4 million residential subscribers and 48,000 businesses that paid for the package of out-of-market games from the 2011 through 2022 seasons on DirecTV. It claims the league broke antitrust laws by selling its package of Sunday games at an inflated price. The subscribers also say the league restricted competition by offering “Sunday Ticket” only on a satellite provider.
“This case transcends football. This case matters,” Carmody said. “It’s about justice. It’s about telling the 32 team owners who collectively own all the big TV rights, the most popular content in the history of TV — that’s what they have. It’s about telling them that even you cannot ignore the antitrust laws. Even you cannot collude to overcharge consumers. Even you can’t hide the truth and think you’re going to get away with it.”
The league maintains it has the right to sell “Sunday Ticket” under its antitrust exemption for broadcasting. The plaintiffs say that only covers over-the-air broadcasts and not pay TV.
Beth Wilkinson, the lead attorney for the NFL, said the league has not disputed that “Sunday Ticket” is a premium product and that it has always been marketed that way.
“That was never in dispute in this case because none of this is secret. None of it is a surprise,” Wilkinson said in her closing argument. “Nobody in this broadcast world thinks there’s anything wrong with it. They failed to bring any witnesses into this courtroom that agree with them.”
Even if the jury of five men and three women rules for the plaintiffs, Gutierrez could still rule in favor of the NFL and say the plaintiffs did not prove their case.
DirecTV had “Sunday Ticket” from its inception in 1994 through 2022. The league signed a seven-year deal with Google’s YouTube TV that began with the 2023 season.
If the NFL is found liable, a jury could award $7 billion in damages, but that number could balloon to $21 billion because antitrust cases can triple damages. It would also change how the league would have to distribute its out-of-market broadcasts and could lead to renegotiated contracts with Fox and CBS. The current agreements with the league run through the 2033 season.
CBS and Fox pay a combined average of $4.3 billion per season for Sunday afternoon games while YouTube TV pays an average of $2 billion per season for the “Sunday Ticket” rights.
The lawsuit was originally filed in 2015 by the Mucky Duck sports bar in San Francisco but was dismissed in 2017. Two years later, the 9th U.S. Circuit Court of Appeals, which has jurisdiction over California and eight other states, reinstated the case. Gutierrez ruled last year the case could proceed as a class action.
Whatever the decision ends up being, the losing side is expected to appeal to the 9th Circuit and then possibly the Supreme Court.
Source: www.espn.com