On August 1, a significant legal development unfolded when a U.S. judge in California overturned a $4.7 billion verdict against the National Football League (NFL). The lawsuit claimed that the NFL had overcharged subscribers for its Sunday Ticket game telecasts for more than a decade.
Key Points:
- The ruling was made by Los Angeles-based U.S. District Judge Philip Gutierrez.
- The NFL argued that the original verdict was unjustified and resulted from a “runaway” jury.
- The NFL welcomed the judge’s ruling, stating, “We believe that the NFL’s media distribution model provides our fans with an array of options to follow the game they love.”
Background of the Case
“Sunday Ticket” is a unique broadcast option for NFL fans who wish to watch out-of-market games. Subscribers alleged that the prices for “Sunday Ticket” were artificially inflated to limit subscriptions and protect the distribution rights fees that broadcast networks paid to air games in local markets.
Detailed Insights:
- Judge Gutierrez’s 16-page order dismissed the testimony from two key witnesses for the subscribers.
- He ruled that the jury’s damages verdict was unsupported by evidence and identified too many defects in the case for it to proceed further.
- Gutierrez stated, “Plaintiffs failed to provide evidence from which a reasonable jury could make a finding of injury and an award of actual damages.”
Impact of the Ruling
The court’s ruling grants judgment as a matter of law to the NFL, but it can be appealed to the San Francisco-based 9th U.S. Circuit Court of Appeals.
Legal and Financial Context:
- A Los Angeles federal jury had previously found on June 27 that the NFL had restricted the availability of “Sunday Ticket,” allowing DirecTV, its former sole distributor, to charge higher prices.
- The jury awarded $4.6 billion based on 24.1 million residential subscriptions over a 12-year class period and $96.9 million for about 506,780 commercial subscriptions for bars and restaurants.
- DirecTV was not on trial during this case.
NFL’s Response
In a court filing, the NFL described the damages amount as “nonsensical” based on the evidence considered by the jury. The NFL also denied that subscribers were overcharged.
Subscribers’ Counterarguments:
- The subscribers contended that the NFL’s arguments were based on “pure conjecture” regarding the jury’s reasoning.
- They argued that there was no evidence the jurors relied on any evidence they were told to ignore.
Potential Consequences
Under U.S. antitrust law, the damages awards could be tripled, potentially increasing the verdict’s value to $14 billion.
This ruling marks a pivotal moment in the legal battle over the NFL’s “Sunday Ticket” pricing and distribution practices, highlighting the complexities and high stakes involved in antitrust litigation within the sports industry. The case’s outcome will likely have significant implications for the NFL and its media distribution strategies moving forward.