NFL Faces Major Legal Setback in Court: Ordered to Pay Billions in "Sunday Ticket" Damages
In a significant blow to the National Football League, a federal judge on Thursday ruled against the league in a long-standing class-action lawsuit, ordering it to pay $4.7 billion in residential class damages and an additional $96 million in commercial class damages. This verdict represents a substantial defeat for the NFL, which has been embroiled in legal battles over the distribution of its "Sunday Ticket" package for nearly a decade.
The class-action lawsuit, initially filed in 2015, questions whether the NFL violated antitrust laws by offering the "Sunday Ticket" package exclusively through certain broadcast partners. The "Sunday Ticket," launched in 1994, allowed out-of-market fans to watch games that were not broadcast in their local areas. The lawsuit specifically focuses on all residential and commercial subscribers who used the service between 2012 and 2022, encompassing nearly 2.5 million customers.
The plaintiffs initially sought $7 billion in damages, arguing that the arrangement between the NFL, Fox, and DirecTV formed an expensive and exclusive "toll road" that limited access to a broad audience. Amanda Bonn, representing the plaintiffs, stated, "NFL, Fox, and DirecTV agreed to make an expensive toll road that very few people would be able to afford. Every single competitor in this scheme benefited."
The NFL, however, has pushed back against the allegations. In their official statement, the NFL expressed disappointment with the jury's verdict, stating, "We are disappointed with the jury's verdict today in the NFL Sunday Ticket class action lawsuit. We continue to believe that our media distribution strategy...is by far the most fan-friendly distribution model in all of sports and entertainment. We will certainly contest this decision as we believe that the class action claims in this case are baseless and without merit."
DirecTV held exclusive rights to the "Sunday Ticket" package from its inception in 1994 until last season when the rights were transferred to YouTube TV. This package, always intended by the NFL as an additional offering, afforded fans a way to view games beyond their local broadcasts. Steve Bornstein, former NFL executive, emphasized, "The NFL always wanted 'Sunday Ticket' to be an additional package. That is how it was designed since its inception."
Additionally, Beth Wilkinson, another representative for the defense, highlighted the choices available to football fans, "The case is about choice. This is a valuable, premium product. Think about all the choices available to fans. We want as many people as possible to watch the free broadcasts."
The ramifications of this ruling extend beyond just the financial penalties. The decision could provoke increased scrutiny over exclusive sports broadcasting packages, potentially reshaping how such deals are structured in the future. As the NFL plans to appeal the decision to the Ninth Circuit, the industry will keenly watch for any precedents that might be set regarding antitrust regulations and media distribution rights.
Moreover, this isn't the first time the NFL has found itself navigating legal minefields. In 2021, the league settled with the city of St. Louis and several other entities for $790 million over the controversial relocation of the Rams. These ongoing legal challenges may prompt the NFL to reconsider its strategies and the ramifications of its media deals.
A hearing is scheduled for July 31 to address post-trial motions, one of which includes the possibility of overturning the verdict. Until then, the NFL remains resolute in its defense, maintaining the stance that its distribution model offers unprecedented value and accessibility to fans.
This saga underscores the evolving landscape of sports broadcasting, where legal scrutiny and fan access continually clash against traditional business models and exclusive contracts. As the league navigates these turbulent waters, fans and stakeholders alike will be watching closely to see how this legal battle unfolds and what it means for the future of sports media.