LOS ANGELES (CN) — The National Football League's greed and illegal price fixing has kept prices for its Sunday Ticket package at an artificial premium and cost subscribers billions of dollars, jurors were told as an antitrust trial in downtown Los Angeles kicked off Thursday.
The league, in combination with its exclusively broadcast partners CBS and Fox for the Sunday afternoon games and its Sunday Ticket distributor — at the time DirecTV, conspired to control the price DirecTV charged for the bundle that allows subscribers to watch all NFL games played on Sunday afternoon, Amanda Bonn, an attorney for the subscribers told the jury in her opening statement.
"We have a trail of documents that tell the truth of what happened," Bonn said. "They did this for one reason and one reason only: greed, money and profit over people."
Citing internal meeting agendas and emails of NFL, CBS and DirecTV executives, the attorney painted a picture of the NFL trying to limit output of the so-called out-of-market games on Sunday to safeguard the stream of advertising dollars the networks receive for those games that are broadcast free over-the-air in the teams' hometowns, and that guarantee they paid the NFL top dollar for their exclusive rights to those games.
At the same time, according to the plaintiffs' attorney, the NFL balked at every attempt DirecTV tried to make to lower the prices for Sunday Ticket in order to attract more subscribers to its satellite TV service.
The only time DirecTV dropped the Sunday Ticket price was in 2012 and the number of subscribers to the bundle rose 40%, Bonn said.
"The NFL never let prices drop again," she told the jury. "This is how an illegal antitrust scheme works."
When the NFL negotiated a new deal for its Sunday Ticket bundle with streaming services and other TV providers a few years ago, according to Bonn, they rejected an ESPN proposal to charge just $70 a season or to offer subscribers the option to get a package for just the team they were interested in.
Instead, the NFL made a deal with Google's YouTube TV that costs $349 for an add-on subscription on top of the price of YouTube TV.
The class action by residential and commercial subscribers such as sports bars and restaurants seek as much as $7 billion in damages for overpaying for the Sunday Ticket bundle over an almost 12 year period. Under antitrust law, that amount of damages would be automatically trebled to $21 billion.
Beth Wilkinson, an attorney representing the NFL, scoffed at the plaintiffs' damages estimate in her opening statement, arguing that it would mean that they should have paid nothing for receiving a premium service over that period.
For one thing, Wilkinson said, the average price for residential subscribers was no more than $102.70 per season, much less than the retail price, because DirecTV offered free one-year deals on the Sunday Ticket to get new customers for its satellite TV business.
"There's nothing secret in this case," she told the jury. "All we have to show is that the agreements are reasonable."
Only 3% of NFL fans subscribe to Sunday Ticket because the vast majority of fans can watch their local team for free on Sunday afternoon on CBS or Fox. And those avid fans that get the Sunday Ticket package are overwhelmingly satisfied with the product, including the lead plaintiffs, one of whom said in his deposition that he "loved" Sunday Ticket, Wilkinson said.
There is nothing nefarious about the exclusive agreements with CBS and Fox, who produce the broadcasts of all the Sunday afternoon games that are included in the Sunday Ticket package, or about their concern with advertising revenue, according to the attorney.
The networks invest considerably more money in producing the NFL broadcasts, which are the most widely watched programs on television, Wilkinson said.
No one objects to NBC not sharing its Olympics broadcast with its competitors or to Apple not giving its popular Ted Lasso series to other streaming services, she said.
And while the NFL of course discussed the price for Sunday Ticket with DirecTV, Wilkinson told the jury, it was the satellite TV company that made the decision how much to charge.
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 Court of Appeals, however, 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 district court.
However, given that the league will inevitable 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."
Follow @edpettersson
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