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The National Football League faces approximately $4.7 billion in damages, potentially tripling to $14 billion under federal law, after losing a jury trial over anticompetitive aspects of its Sunday Ticket broadcast package.
What Happened: The verdict was handed down on Thursday by a federal court jury in Los Angeles, Bloomberg reported. The lawsuit, initiated by football enthusiasts, alleged that the NFL and DirecTV conspired to drive up the cost of subscriptions for viewing games played away from home. Instead of settling, the NFL decided to fight the consumer class-action lawsuit in court.
The main contention of the lawsuit was that the NFL and DirecTV compelled viewers to pay for out-of-market games, even if their favorite team wasn’t playing, and at an inflated price. NFL Commissioner Roger Goodell defended the league in court, asserting that DirecTV alone decided the subscription fee.
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However, the attorney representing the fans challenged this assertion during closing arguments, suggesting it was a “company line” and that a distribution model on basic cable would double the average game distribution. The NFL’s legal team contended that their current strategy fosters competition, encourages networks to invest in high-quality broadcasts, and enables revenue sharing among teams.
The NFL also insisted that exclusive TV deals are protected by the Sports Broadcasting Act, which grants an antitrust exemption for the sale of broadcasting rights. DirecTV, which denied any wrongdoing, was not on trial as it had successfully persuaded the judge in 2021 to move customer claims against the company to closed-door arbitration.
Why It Matters: The damages in the Sunday Ticket case were estimated by plaintiffs to be nearly $7 billion. The NFL’s Sunday Ticket has been a hot topic in recent years. In 2022, Apple Inc. (NASDAQ:AAPL) and Google‘s parent company, Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), were in fierce competition for the NFL’s last available TV rights. Eventually, YouTube, owned by Alphabet, secured a seven-year contract worth over $2 billion per season to host the NFL’s out-of-market Sunday afternoon games, a position previously held by DirecTV since 1994.
Image via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
