An antitrust lawsuit against NFL Sunday Ticket, the National Football League’s out-of-market game package, will again proceed after the US 9th Circuit Court of Appeals reversed a prior decision dismissing the lawsuit.
A group of subscribers of the leaguewide game package, distributed exclusively by AT&T-owned DirecTV, allege the bundled subscription sold by the single provider illegally constricts consumer choice, in turn leading to higher prices.
A federal district court judge had previously rejected that argument. But 9th Circuit Court Judge Sandra Ikuta led a majority decision issued Aug. 13 reversing that prior dismissal, once again allowing the lawsuit to proceed, saying the plaintiffs have a claim that should be heard for a potential Sherman Antitrust Act violation.
“Looking holistically at the alleged conduct, we conclude that the complaint adequately pleads that the vertical NFL-DirecTV agreement works in tandem with [NFL teams pooling telecast rights] to restrain competition,” the opinion reads in part. “Defendants have failed to identify, and we are unaware of, any binding precedent requiring the teams and the NFL to cooperate in order to produce the telecasts.”
The ruling arrives as AT&T and the NFL are entering the final two years of an eight-year, $12 billion deal for NFL Sunday Ticket signed in 2014. Each side had prior options to exit the deal following the upcoming 2019 season, but opted not to exercise them.
The current base price for NFL Sunday Ticket is $293.94 per season, representing one of the most expensive a la carte sports content options across all of US media. Commercial establishments such as sports bars and restaurants pay even higher rates for the package that depending on the size of the individual site can soar into the tens of thousands of dollars per season.
That cost comes into play regularly as fans living in a different media market than their favorite team must buy the entire NFL Sunday Ticket package, while fans living in the same market as their preferred team can see them every week for free.
Even outside the ongoing legal drama, what the league opts to do next with its out-of-market rights is fraught with uncertainty. The NFL has shown increased willingness to work with digitally focused outlets, such as its ongoing deal with Amazon for non-exclusive streaming rights to Thursday night games. But it is unknown whether one of those digital outlets will pay rights fees near or more than what DirectTV is currently paying, particularly if the league’s out-of-market rights are split among multiple distributors in the next term.
AT&T, meanwhile, reported a net loss of nearly a million TV subscribers across DirecTV, DirecTV Now and U-verse in its most recent fiscal quarter, and will likely face further subscriber hemorrhaging without its exclusive hold on the top-tier NFL content.