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Are Fans Losing Out (Illegally) Through NFL Sunday Ticket?

Close up of players from 2018 NFC Championship Game
By Joseph Fawbush, Esq. on August 21, 2019 9:49 AM

Everything involving the National Football League is now televised, including all seven rounds of the NFL draft. Because, apparently, we care about which collegiate athlete we’ve never heard of has the chance to become a backup in the NFL. Media speculation about trades, offseason workouts and even the players’ off-the-field activities is ubiquitous. You never need to go long without hearing about how your favorite team is doing.

Despite the NFL’s focus on being constantly in front of fans, however, it remains difficult for out-of-market fans to watch NFL games involving their favorite team. That is because NFL teams have agreed to pool telecasting rights, which the NFL then distributes as it sees fit. The NFL sees fit to prevent a “home” team from having to compete against other franchises for a local television audience.

While that initially was found to violate U.S. antitrust law, Congress carved out an exemption to Section I of the Sherman Act for professional teams through the Sports Broadcast Act of 1961. The NFL lobbied hard to have that bill passed.

Individual Teams Cannot Enter into Telecasting Rights Agreements

The SBA only applies to network games (i.e., games on CBS, Fox and NBC). Cable, satellite and streaming services are different. As such, the NFL gives DirecTV the exclusive right to broadcast all NFL games in all markets through DirecTV’s “NFL Sunday Ticket”. AT&T, which owns DirecTV, contracted with the NFL for these rights through the 2020-21 season. It is an 8-year, $12 billion deal. While the NFL could have opted out this year, for 1.5 billion reasons it chose not to.

But transplanted NFL fans may yet have reason to hope. The 9th Circuit recently revived an antitrust lawsuit against DirecTV. The lawsuit claims that the NFL-DirecTV deal violates section 1 of the Sherman Act. The judges, in reversing the district court’s dismissal, relied heavily on the Supreme Court ruling in NCAA v. Univ. of Oklahoma, which held that collegiate football teams could negotiate for their own television contracts.

The 9th Circuit found that the plaintiffs had alleged enough to move the case forward to discovery. It was not a decision on the merits. It is by no means clear that the NFL-DirecTV deal will be found in violation of the Sherman Act. For one, the NFL will argue that the deal is beneficial to consumers, even if it is expensive. It may argue fewer games at all will be broadcast without a similar national deal in place.

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