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LOS ANGELES (CN) — A federal judge indicated Wednesday that he’s likely to overturn the $4.7 billion verdict a jury returned last month in favor of NFL Sunday Ticket subscribers over claims the National Football League conspired with DirecTV to artificially inflate the price for the bundle.
U.S. District Judge Philip Gutierrez didn’t issue a ruling during the hearing in downtown Los Angeles on the NFL’s motion for judgment as a matter of law or for a new trial. However, he agreed with the league that the jury’s damages award wasn’t supported by the evidence.
The jury calculated the precise amount of damages to be $4,707,259,944.62 using a theory that had never been presented during the trial, the judge said.
“There’s no doubt about what they did,” Gutierrez said. “They didn’t follow the instructions.”
The question now is whether the judge will enter judgment in favor of the NFL or order a new trial.
Brian Stekloff, an attorney for the NFL, argued that the case should be closed without a retrial because the plaintiffs’ damages experts failed to provide an adequate model for jurors to decide the actual damages Sunday Ticket subscribers sustained.
“You can’t take unreliable methodologies that don’t fit the facts and let the jury decide what is reasonable,” Stekloff said.
The NFL focused on the testimony of Daniel Rascher, a sports economist at the University of San Francisco, who told the jury that without the NFL’s anti-competitive practices, and if Sunday Ticket were made available through multiple distributors, subscribers wouldn’t have to pay anything beyond what they pay for their cable, satellite or streaming service.
According to Stekloff, Rascher created a “fantasy world” in comparing the NFL to college football, including by cherry-picking elements of college football’s marketing of TV rights to fit his narrative and failing to explain how NFL teams would make individual broadcasting deals for their games rather than pooling their TV rights for the Sunday afternoon games.
The jury, Stekloff said, rejected Rascher’s damages calculation of $7 billion as well as the alternative models the plaintiffs presented at trial, and in the end created its own model.
The league’s attorney reasoned that the jurors had taken the listed price of Sunday Ticket Basic in 2018 and 2019, which was $294 a year, and subtracted $102.74, the average price subscribers actually paid, to arrive at a “discount” — then multiplied that amount by the number of commercial and residential subscribers. This damages theory was never introduced at trial, and it conflates commercial and residential subscribers who paid very different rates.
The judge agreed while in most cases it isn’t appropriate to speculate about how the jury arrives at a damages award, in this case there was no question about how they came up with the amount.
“Is it rational to say the damages are the discounts?” Gutierrez asked Mark Seltzer, an attorney representing the subscribers. “It’s not even a discount that applies to this case. That’s even more irrational.”
Seltzer argued that jurors have the ability and the right to negotiate among themselves what a fair damages award is as long as it falls within a range supported by the evidence.
He also told the judge that even if college football isn’t a perfect comparison for the NFL, the fact that the National Collegiate Athletics Association was able to quickly switch from pooling all of its TV rights to letting individual conferences and teams negotiate their own deals supported the plaintiff expert’s position that the NFL could do the same.
“The yardstick model can’t be perfect,” Seltzer said. “But you can’t dream up a closer comparison than college football.”
Gutierrez, however, didn’t seem persuaded by the plaintiffs’ premise that all college football games were available at no extra cost. As a Notre Dame fan, he said, he needs to get a separate subscription to watch at least some of the team’s games.
During the three-week trial, the subscribers built their case that the NFL — working with DirecTV, CBS and Fox — conspired to control the price charged for the Sunday Ticket bundle.
They cited internal meeting agendas and emails from NFL, CBS and DirecTV executives as they argued the NFL was limiting the output of so-called out-of-market Sunday games to safeguard its stream of advertising dollars — and to ensure the networks paid the NFL top dollar for exclusive rights to those games.
The subscribers said the league balked at every attempt by DirecTV to lower Sunday Ticket prices. When the NFL negotiated a new deal for its Sunday Ticket bundle with streaming services and other TV providers a few years ago, they said, the league also rejected an ESPN proposal to charge subscribers just $70 a season — or to offer consumers the option to only subscribe to the team they were interested in.
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