LOS ANGELES (CN) — The National Football League scoffed at claims by former subscribers to DirecTV's Sunday Ticket package that it secretly schemed to set inflated prices for the bundle as the billion-dollar antitrust case went to the jury.
"It's got to be the most ridiculous conspiracy dreamed up by the plaintiffs," Beth Wilkinson, one of the NFL's lawyers told the jury in downtown Los Angeles during her closing argument Wednesday afternoon. "Either it was a really crappy conspiracy or that was no conspiracy at all."
While the subscribers argue the league controlled the price DirecTV charged subscribers each season to watch so-called out-of-market games that weren't available on their local CBS and Fox affiliates on Sunday afternoon, their evidence that the NFL "pushed back" at DirecTV's pricing strategy and the fact that the satellite-TV provider gave the bundle away for free to new subscribers undermines their claim, Wilkinson said.
Moreover, she noted, NFL Commissioner Roger Goodell openly told the Federal Communications Commission that the league designed the Sunday Ticket package as an add-on, premium offering so as not to undermine the free, over-the-air broadcasts of local games by CBS and Fox on Sunday afternoons.
"None of this is secret," Wilkinson said. "None of this is a surprise."
The residential and commercial subscribers seek as much as $7 billion in damages for paying purportedly inflated prices because of the league's anticompetitive arrangement with DirecTV over a 12-year period. Under U.S. antirust law, damages will be automatically trebled if the jury finds liability, putting the NFL potentially on the hook for as much as $21 billion.
According to the plaintiffs, the league conspired to limit distribution of Sunday Ticket by setting a premium price for the package to protect its lucrative licensing agreements with CBS and Fox. If Sunday Ticket had been cheaper and more widely available, they claim, the networks' ratings for their broadcasts could go down because more viewers would watch other NFL games available on DirecTV at the same time.
Lower ratings in turn would cut in their advertising revenue and would make the networks unwilling to pay the same amount of money to the NFL to broadcast the games.
This, the subscribers' attorney Bill Carmody told the jury in his closing argument earlier Wednesday, is exactly what New England Patriots owner Robert Kraft said in his disposition played during the three-week trial.
"It would devalue our over-the-air partners packages," Kraft said of making Sunday Ticket more widely available. "They wouldn't be incentivized to continue to pay us what they pay us."
"It's about money," Carmody said, citing the $23 billion the NFL has received from CBS and Fox for the Sunday afternoon games during the class period. "Whether you're a football fan or not, antitrust law in the United States empowers you to send a message to the 32 team owners that it's not OK to collude."
The eight jurors will decide whether the NFL and its individual teams violated the Sherman Act by conspiring with DirecTV to unreasonably constrain trade and to monopolize the market for the out-of-market games.
A big part of their job, as U.S. District Judge Philip Gutierrez explained in his jury instructions, is to evaluate whether the Sunday Ticket arrangement has any procompetitive benefits that outweigh the purported anticompetitive harm to consumers.
The NFL has maintained throughout the trial that free availability of the Sunday afternoon games on local TV is a key contributor to the league's popularity and that Sunday Ticket has always been intended as a supplementary offering for avid fans who want to watch more football than their local team's games.
Moreover, the league has said, the teams share the revenue from their exclusive licensing deals with CBS and Fox equally, which is crucial to keeping the competitive balance between the teams and results in close and exciting games.
The exclusive deals with CBS and Fox aren't challenged at trial because they have been sanctioned by the 1961 Sports Broadcast Act that allows the teams to pool their TV rights and sell them collectively for free, over-the-air television.
Rather, the plaintiffs argue that the teams broke the law by pooling the broadcast rights to the out-of-market games for paid television and making an exclusive deal with DirecTV to sell subscriptions to those games.
According to the subscribers, if the teams had competed among themselves to sell their out-of-market telecasting rights, those games would have been available for free as part of a basic cable subscription just as college football games are. In college football, the individual conferences negotiate their TV deals.
In response, the NFL has said that unlike any other professional league or the NCAA, fans can watch every game of their local team free, whereas only 24% of the NCAA's popular Southeastern Conference and Big 10 Conference are available free locally, and only 15% of Major League Baseball games.
In addition, Wilkinson told the jury there has been no testimony from competing broadcasters, such as ABC, NBC or Apple's streaming service, that they have been wronged by the NFL's broadcast strategy.
Since last season, Sunday Ticket is no longer available through DircecTV, but exclusively on Google's YouTube TV.
The NFL initially won dismissal of the case in 2017 when the judge previously presiding over the case agreed with the league that the subscribers hadn't made a plausible case that the exclusive distribution deal with DirecTV harmed competition. The Ninth Circuit found differently and reversed that decision.
After the U.S. Supreme Court passed on the opportunity to take up the case in late 2019, the subscribers' claims ended up back in the lower court.
However, given that the league will inevitably appeal an adverse verdict, the NFL will likely be encouraged by an observation Justice Brett Kavanaugh made when the Supreme Court decided it wasn't going to weigh in at an early stage of the litigation.
Pointing out that the Supreme Court's denial of certiorari shouldn't necessarily be viewed as agreement with the legal analysis of the Ninth Circuit, Kavanaugh said the plaintiffs' argument that antitrust law may require each NFL team to negotiate an individualized contract for televising only its own games was in "substantial tension" with antitrust principles and precedents.
"The NFL and its member teams operate as a joint venture," Kavanaugh said. "And antitrust law likely does not require that the NFL and its member teams compete against each other with respect to television rights."
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