A California court has given the NFL and DirecTV a giant Christmas present this summer. It dismissed a class-action lawsuit regarding the out-of-market package that has been exclusive to DirecTV. Back in 2015, commercial and residential customers alleged that the NFL and the satellite provider was preventing them from buying single-game packages and charging way too much.
Well, that lawsuit was tossed. The judge said while she agreed in theory that there was antitrust standing to challenge the Sunday Ticket, she found what the suit lacked was the standing to challenge the agreement between the NFL and its teams.
Back in February, a federal judge heard arguments on what actually defined a blackout. The NFL and DirecTV argued that every game is available to fans somewhere and free to all thus meaning no blackouts. But the suit claimed that no one should have to pay for Sunday Ticket and the games should be available everywhere.
U.S. District Judge Beverly Reid O’Connell wrote:
“Plaintiffs have failed to establish that the exclusive distributorship arrangement between DirecTV and the NFL reduces output,” writes O’Connell. “Even assuming output was measured by viewership, as Plaintiffs suggest, because Sunday Ticket has increased access to out-of-market games, it has also increased viewership and, thus, Plaintiffs have not established that the agreement limits output under this definition.”
She also said because DirecTV has to renegotiate its agreement with the NFL at every so often and competitors have the right to bid, there is competition for the product. And even if DirecTV charges exhorbitant prices for Sunday Ticket, it’s not harming the competition.
Judge O’Connell said the suit failed to prove that the NFL and DirecTV have the power to increase fees.
“By offering free game broadcasts on CBS and Fox, the NFL Defendants lack the ability to artificially control out-of-market games pricing because consumers may choose to view these free games as alternatives to paid-for out-of-market games, thereby driving market prices down naturally.”
Consumers will argue this point in that DirecTV increased the Sunday Ticket fees by two percent in 2016 and will likely hike the price again this season. The parties that were hoping to see the NFL and DirecTV be forced to offer single-game or single-team packages like the NBA and NHL likely won’t now unless something radical happens.
But the NFL likes to view itself differently than the other leagues and this may have been the best chance for consumers to get change on Sunday Ticket and that chance seems to have passed.