If you’re a fan of an out-of-market NFL team, your current options to watch your team’s games from home are either to purchase Direct TV and subsequently purchase the network’s Sunday Ticket package, or to fail to watch your team from home at all.
In light of this predicament, a class action anti-trust lawsuit was filed against the league and Direct TV several years ago, which recently crept its way up to the United States Court of Appeals for the Ninth Circuit. From there, attorneys for the NFL and Direct TV have petitioned that the case be heard before the United States Supreme Court.
The lawsuit alleges that the league’s current broadcasting agreement with Direct TV violates the Sherman Anti-Trust Act by preventing each distinct NFL team, which are separate entities, from competing against one another for a larger market share. The NFL’s current $12 billion deal with Direct TV that gave rise to the television provider’s Sunday Ticket package was initially signed in 2014 and has a lifespan of 8 years.
Direct TV’s Sunday Ticket package has a price tag of roughly $300 for consumers per season. However, the package can run anywhere from $2,300 to $120,000 for restaurants and bars, which are charged a price relative to the capacity of the venue and number of potential viewers each establishment can hold.
If it were found that the NFL’s current system of restricting competition between teams for viewership rights is illegal, each team would be permitted to explore broadcasting rights individual and consumer prices for broadcasts would likely decline substantially. This could give more people the chance to watch out of market teams on standard television networks without having to pay extra for add-on packages.
Under the league’s current broadcasting format, the NFL expressly prohibits teams from competing against one another for television contracts pursuant to Article X of the NFL bylaws. Instead, the league negotiates deals on behalf of each team and generally prevents teams from broadcasting their own games in another team’s “home territory,” which is defined as a 75-mile radius surrounding a team’s home city. However, a few exceptions exist to that rule, namely for markets that have more than one team, such as New York. In essence, the league grants each team a limited monopoly in its “home territory” but limits the geographic size of the monopoly.
The plaintiffs’ core argument in In re National Football League’s Sunday Ticket Antitrust Litigation is that the prohibition on broadcasting outside of a team’s “home territory” financially harms football fans by eliminating competition amongst teams in the live television market. This same prohibition, contained in Article X of the NFL bylaws, is precisely what allowed the league to sign a broadcasting contract with Direct TV and gave rise to Direct TV’s Sunday Ticket package. While the Supreme Court has not yet indicated whether or not it will choose the hear the case, the plaintiffs’ antitrust claims could certainly have a far-reaching impact on NFL fans across the country should the Court rule against the league.