LOS ANGELES (CN) — National Football League Commissioner Roger Goodell took the stand Monday to defend the league’s broadcast strategy against claims by Sunday Ticket subscribers that they were forced to pay inflated prices to watch out-of-market games on DirecTV.
Goodell told the jury in downtown Los Angeles that the league’s exclusive deals with CBS and Fox to broadcast the Sunday afternoon games for free is a crucial part in the NFL’s success in growing its fan base. The Sunday Ticket package, he said, had always been a complimentary product for avid fans who want to watch more football than is available through their local CBS and Fox affiliates.
“We want to reach the largest audience we can, preferably on free TV,” Goodell said under questioning from Beth Wilkinson, an attorney for the NFL.
According to commissioner, it has never been a secret that the league didn’t want the Sunday Ticket subscription package, which is now on Google’s YouTube TV, to undermine TV network broadcasts.
The networks, he said, invest a lot of money in producing high quality and innovative broadcasts with the best announcers, and the vast majority of fans will be able to see all their hometown teams’ games for free. The revenue from the licensing agreements with the networks in turn is shared equally by the teams, which Goodell said, helps keep a competitive balance among them and produces the close and competitive games fans want to see.
According to the suing subscribers, the NFL received $23 billion in licensing revenue from CBS and Fox over the 11-year period that their lawsuit covers, as well as $18 billion from DirecTV.
However, Goodell argued that the exclusive deals with the networks benefit the fans because the quality of their broadcasts is “incredible.” The same live broadcasts are repackaged in the Sunday Ticket bundle and shown simultaneously outside the local teams’ markets.
“I think it’s very pro-consumer and pro-fan,” Goodell told the jurors, noting that NFL football is the only professional sport where fans can see their local team’s games play for free.
The commissioner also rebuffed the argument by one of the subscribers’ expert witnesses, who testified last week that the NFL wanted the Sunday Ticket package on DirecTV only because the satellite TV provider has a smaller subscriber base than the large cable networks and wouldn’t cut into the viewership of the networks’ broadcasts.
Goodell counters that the NFL went with DirecTV because it had a national network as opposed to the cable TV providers, whose distribution was limited to their specific geographical areas. The satellite service is also available in rural communities that don’t have cable, he said.
And under cross-examination by Bill Carmody, one of the plaintiffs’ attorneys, Goodell defended the league’s position that the Sunday Ticket bundle should be premium priced, even though he insisted the NFL didn’t set the price and that DirecTV was able to offer it for free.
“We think it’s a premium product and should be priced as such,” he said.
The Sunday Ticket subscribers are seeking as much as $7 billion in damages, which under U.S. antitrust law is subject to mandatory trebling, putting the NFL potentially on the hook for $21 billion.
They claim that if the NFL had made the out-of-market games available to more distributors, as it has to do in Canada under that country’s regulations, the price would have been a fraction of what they had to pay under the league’s exclusive arrangement with DirecTV.
Earlier Monday, the trial had gotten bogged down in testimony about the economic models the subscribers rely on to support their damages claim. U.S. District Judge Philip Gutierrez finally lost patience with a plaintiff attorney’s cross-examination of the NFL’s rebuttal expert, sending the jury out of courtroom so he could instruct the lawyer to stop wasting time by repeatedly regurgitating the same information.
“We all know the plaintiffs’ allegations,” the judge said. “You are wasting time.”
The case covers residential and commercial Sunday Ticket subscribers over an almost 12 year period, from June 17, 2011 to Feb. 7, 2023, when the judge certified the classes. While DirecTV, which was the exclusive Sunday Ticket distributor during this time, is also a defendant in the case, Gutierrez agreed to send the claims against the satellite TV provider to arbitration.
Three interrelated agreements between the teams and the NFL, between the NFL and CBS and Fox, and between the NFL and DirecTV — and now Google whose YouTube TV, since last ,year exclusively provides the Sunday Ticket package for residential subscribers — reduce choice and increase prices, the plaintiffs claim.
The jury will have to decide whether these agreements unreasonably restrain trade in violation of Section 1 of the Sherman Act and whether they allow the NFL to unlawfully monopolize the market for live video presentation of professional football games in violation of Section 2 of the Sherman Act.
Follow @edpettersson
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