Statements
LOS ANGELES -- On Tuesday, U.S. District Judge Philip Gutierrez expressed his growing frustrations over the handling of a class-action lawsuit brought against the NFL by "Sunday Ticket" subscribers. This case encompasses a staggering 2.4 million residential subscribers and 48,000 businesses who paid for out-of-market games packages spanning from the 2011 through the 2022 seasons.
A Simple Premise Complicated
Before Dallas Cowboys owner Jerry Jones resumed his testimony on the second day, Judge Gutierrez reiterated that the fundamental issue at hand was straightforward. He empathized with fans like a Seattle Seahawks supporter living in Los Angeles, who would have to purchase a costly subscription to watch their favorite team’s games along with all other Sunday afternoon out-of-market matches.
The lawsuit accuses the NFL of violating antitrust laws by inflating prices for the package of Sunday games aired on CBS and Fox. Additionally, the plaintiffs argue that the NFL stifled competition by limiting "Sunday Ticket" availability to just one satellite provider.
The NFL defends its actions, asserting it is well within its rights to sell "Sunday Ticket" under its antitrust exemption for broadcasting. The plaintiffs counter this by insisting that the exemption is only applicable to over-the-air broadcasts, not to pay TV.
If found liable, the NFL could face damages up to $7 billion, a figure that could potentially triple to $21 billion due to the nature of antitrust cases.
Judge Gutierrez's Frustrations
Tuesday was not the first instance of Judge Gutierrez voicing his frustrations with the plaintiffs' attorneys. On Monday, he chastised them for repeatedly summarizing past testimonies, deeming this a waste of time.
Before Jones continued his testimony, the judge doubted the plaintiffs' attorneys' reference to Jerry Jones' lawsuit against the NFL in 1995. That case, which disputed the league's licensing and sponsorship practices, eventually concluded with an out-of-court settlement. Jones initially filed the lawsuit in 1994, maintaining that he agreed with the league’s TV contracts and revenue-sharing arrangements but contested its approach to licensing and sponsorship.
Testimonies Highlight Key Issues
During Tuesday's proceedings, Jones was questioned about whether teams should be allowed to sell their out-of-market TV rights. He argued against it, suggesting that doing so "would undermine the free TV model we have now."
Retired CBS Sports chairman Sean McManus also testified, reiterating his opposition to "Sunday Ticket" and the NFL’s Red Zone channel. McManus believes that "Sunday Ticket" encroaches upon CBS’s exclusive rights in local markets.
Negotiation records reveal that both CBS and Fox requested "Sunday Ticket" be marketed as a premium package. During the disputed period, DirecTV—not the NFL—set the pricing for these packages.
The NFL’s television contracts with CBS and Fox include language that mandates the resale packages, like "Sunday Ticket," should cater to avid league fans and complement in-market game offerings. The contracts also prohibit selling individual games on a pay-per-view basis.
From 1994 through 2022, DirecTV paid the NFL a rights fee for the "Sunday Ticket" package. Starting last year, Google's YouTube TV acquired the rights to "Sunday Ticket" for a seven-season term.
Market Standards and Revenue Sharing
During a deposition, DirecTV marketing official Jamie Dyckes noted that MLB, the NBA, and the NHL all had suggested retail prices for their out-of-market packages and also engaged in revenue sharing between the leagues and carriers, distributing their packages across several platforms.
The trial will continue on Thursday, with closing arguments expected early next week. Judge Gutierrez has hinted at the potential of invoking a rule that would allow the court to determine that a jury might lack sufficient evidence to rule in favor of a party in this case.
Quotes
Judge Gutierrez did not hide his exasperation, bluntly stating, "I’m struggling with the plaintiffs' case." Throughout the trial, his remarks have demonstrated his mounting frustrations: "The way you have tried this case is far from simple." He further elaborated, "This case has turned into 25 hours of depositions and gobbledygook," adding, "This case has gone in a direction it shouldn't have gone."
As the case nears its conclusion, all eyes remain on the courtroom, waiting to see if the plaintiffs' attorneys can realign their arguments with the straightforward premise that Judge Gutierrez outlined from the start.