A federal jury has concluded that the NFL must pay about $5 billion in damages for artificially inflating the prices of DirecTV's Sunday Ticket subscription service, which broadcasts out-of-market games. The decision was made Thursday in Los Angeles.
The ruling, which caps a month-long class-action lawsuit and nearly a decade of legal battles, includes about $96 million in damages to bars and restaurants that subscribed to the service and more than $4.6 billion in damages to about 2.4 million retail subscribers. The league could have to pay more than $14 billion because the law triples damages in such antitrust cases.
The damages awarded by the jury were much more than what the plaintiffs' lawyers had sought. “This is a great day for consumers around the world,” said Bill Carmody, one of the plaintiffs' lawyers.
The NFL is expected to appeal the ruling.
“We are disappointed with today's jury verdict in the NFL Sunday Ticket class action lawsuit,” NFL spokesman Brian McCarthy said in a statement. “We believe the class action claims in this lawsuit are frivolous and without merit, and we certainly intend to contest this verdict.”
U.S. District Judge Philip Gutierrez, who publicly scolded the plaintiffs' lawyers during the trial, is scheduled to hear post-trial motions next month. He could theoretically find that the jury reached an unjust verdict. An appeals court could also change the damages amount.
Still, the ruling poses a big risk for the league, which has become a $20 billion behemoth thanks to its media deals.
“Jurors are inherently unpredictable, but whenever they rule against a sports organization, it's significant because leagues rarely take these cases to trial,” said Gabriel Feldman, director of Tulane University's sports law program.
This civil lawsuit strikes at the heart of the NFL's media distribution strategy, which for more than half a century has been based on negotiating contracts with networks on behalf of all 32 teams. More than 90 percent of NFL games are broadcast on free over-the-air television in the participating teams' markets, and many other games are broadcast in primetime on national networks. Contracts with broadcasters such as CBS, Fox and NBC generate more than $10 billion in annual revenue.
Sunday Ticket was unique in that it packaged out-of-market games already aired by CBS and Fox and resold them to fans for about $300 per season. The plaintiffs argued that the price was artificially inflated to limit the number of subscribers. The plaintiffs' lawyers pointed to emails sent by ESPN, the cable sports network, to NFL executives in which the network told them it was willing to offer Sunday Ticket for just $70 and sell single-team packages.
The league rejected the offer and stuck with DirecTV until it could reach a new deal with YouTube TV in 2022.
During the trial, the league acknowledged that CBS and Fox would suffer if Sunday Ticket attracted many subscribers, and Commissioner Roger Goodell, testifying last week, said the service was priced as a premium product.
Jurors and many fans have argued that the NFL can and should offer games at lower prices and with more flexible options, such as team-specific packages. Feldman, the Tulane professor, said the NFL will likely restate its argument on appeal that while it negotiates its contracts collectively, it offers a consumer advantage because it offers many games over the air for free.
The NFL will argue that “we're not like Coca-Cola and Pepsi, we're like Coca-Cola and Coca-Cola Zero,” Feldman said. “We're part of the same company and we share the same goals.”