The NFL faced a significant legal defeat on Thursday as a federal judge ruled against the league, mandating the NFL to pay $4.7 billion in residential class damages and an additional $96 million in commercial class damages. This ruling is the culmination of a class-action lawsuit that has been navigating the courts since it was filed in 2015. The lawsuit centers on the NFL's "Sunday Ticket" package, questioning whether the league violated antitrust laws in its distribution approach.
"Sunday Ticket," launched in 1994, was conceptualized as a unique offering for out-of-market fans eager to watch their home teams. However, the class-action lawsuit's scrutiny covers all residential and commercial subscribers who used the service between 2012 and 2022—a demographic totaling nearly 2.5 million customers. Initially, plaintiffs aimed to secure $7 billion in damages, but the judge's ruling brought a somewhat lesser yet still substantial penalty.
The crux of the lawsuit argues that the NFL, along with Fox and DirecTV, orchestrated an exclusive distribution scheme that limited consumer choice and inflated prices. Amanda Bonn, representing the plaintiffs, criticized the arrangement, stating, "NFL, Fox, and DirecTV agreed to make an expensive toll road that very few people would be able to afford," emphasizing that "every single competitor in this scheme benefited."
The NFL, on the other hand, staunchly defended its media distribution strategy. In a statement, the league expressed its dissatisfaction with the verdict: "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."
Legal ramifications aside, the outcome of the case could herald broader implications for exclusive sports broadcasting packages. Beth Wilkinson, representing the defense, argued the NFL's position, highlighting the variety of options available to 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." Indeed, the NFL's stance has always been that "Sunday Ticket" was intended as an additional package rather than a restrictive necessity, as outlined by Steve Bornstein: "The NFL always wanted 'Sunday Ticket' to be an additional package. That is how it was designed since its inception."
DirecTV, which held the "Sunday Ticket" rights from 1994 through 2022, recently transferred these rights to YouTube TV last season, signaling a new chapter in the package's distribution. This transition might have influenced the timing and outcome of the lawsuit, as the shift in distribution model could potentially address some of the plaintiffs' concerns regarding market monopolization and pricing.
The verdict arrives on the heels of another significant settlement involving the NFL. In 2021, the league agreed to pay $790 million to the city of St. Louis and other entities related to the relocation of the Rams. These high-stakes financial penalties underscore the ongoing legal and financial challenges the NFL faces.
A hearing is scheduled for July 31 to address post-trial motions, including the potential to overturn the verdict. With the NFL planning to appeal to the 9th Circuit, the case is far from over. Pending this appeal, the decision renders an essential moment for sports law, potentially prompting further scrutiny over exclusive broadcasting deals within the industry.
For the nearly 2.5 million "Sunday Ticket" subscribers and the broader sports community, the lawsuit serves as a critical examination of how exclusive rights and fan access can coexist. The final outcome may not only redefine the NFL's future media strategies but also set a precedent for how sports packages are marketed and sold across all major leagues.