No Instant Replay: High-Demand for Live Action Sports
In 2024, the NFL had its most-watched Week 1 on record, averaging 21 million viewers per game. The growing popularity of fantasy leagues and sports betting has given fans more reasons to root for teams outside of their hometowns. This increased interest in out-of-market games, coupled with a societal shift to streaming services, has driven the NFL to adopt broadcasting agreements that reflect this new age of technology and sports viewership.
For many football fans, the only way to watch out-of-market games is to pay a high price. The primary option is an annual subscription to NFL Sunday Ticket, which is DirecTV’s exclusive agreement for live broadcast out-of-market NFL games. In 2021, Amazon received exclusive rights to air Thursday Night Football on Amazon Prime Video through an 11-year media rights deal. These exclusivity deals have made it increasingly difficult for consumers to watch out-of-market games for a reasonable price. For the 2023 season, the residential cost for the most basic Sunday Ticket package was $349 per season, while the price varied based on fire code occupancy for bars and restaurants purchasing the package. The NFL and DirecTV are now dealing with a multibillion-dollar antitrust lawsuit, and the threat of its other streaming agreements being subject to the same scrutiny. Because there is little precedent regarding streaming broadcasting agreements and current statutes are outdated, courts now face the task of making the right call or continuing to penalize consumers.
Congress’ Outdated Playbook
In 1961, Congress passed the Sports Broadcasting Act (SBA), granting major sports leagues limited antitrust exemptions under the Sherman Act. The SBA allowed leagues like the NFL to negotiate broadcasting agreements directly with networks on behalf of all teams in each league. Sports leagues were granted the ability to make horizontal agreements (those made between competitors) by pooling team broadcasting rights, without violating antitrust laws.
However, courts later clarified the SBA’s scope. In Shaw v. Dallas Cowboys Football Club (1999), the court held that the SBA did not extend to agreements with subscription-based services and that it only covers free telecasting of professional sports games. The SBA was created in 1961 without streaming services in mind, highlighting its outdated application today. As streaming increasingly becomes the preferred mode of viewership, courts must now face the challenge of interpreting laws designed for an entirely different technological landscape. This leads to a broader discussion of updating laws and statues to reflect a new information age and the technology that drives sports viewership.
Upset Fans: NFL Sunday Ticket Creates Class-Action Lawsuit
In 2015, a class of 2.4 million individual subscribers and 48,000 commercial establishments that purchased Sunday Ticket during the class period between 2011 and 2023 filed suit against the NFL and DirecTV, alleging that the exclusive agreement for NFL Sunday Ticket violated antitrust laws by restricting competition and forcing consumers to pay inflated prices for out-of-market games. The suit also accused the NFL of entering into an illegal horizontal agreement.
In June 2024, a federal jury in Los Angeles sided with the plaintiffs, finding that Sunday Ticket violated antitrust laws. The jury ordered the NFL to pay nearly $4.8 billion in damages, concluding that all 32 NFL teams and DirecTV unlawfully pooled broadcasting rights and required consumers to purchase Sunday Ticket as a bundled package rather than offering purchase single-team packages.
However, this victory for consumers was short-lived. In August, U.S. District Judge Gutierrez overturned the verdict, citing flawed methodologies used by two expert witnesses for the plaintiffs. Gutierrez states that without their testimony, “no reasonable jury could have found class-wide injury or damages.” He further noted that the experts failed to present sound economic models that proved the exclusivity of Sunday Ticket caused class-wide damages. It is likely that this legal battle will continue, as the plaintiffs are expected to appeal again to the Ninth Circuit. With this antitrust litigation still ongoing, football fans are left wondering what move the NFL, streaming services, and courts will make that will ultimately shape the future of sports broadcasting.
Up to the Refs: Future Court Decisions Crucial to Viewership Experience
While Judge Gutierrez dismissed the plaintiffs’ case due to flawed expert testimonies, he acknowledges that “the Court does not find that it would be unreasonable for a juror to find that there was conspiracy that unreasonably restrained trade” based on other evidence that was presented in the record. A final decision in favor of the NFL and DirecTV could establish a precedent that is harmful for consumers. If DirecTV eventually moves to the Supreme Court, Justice Kavanaugh has expressed skepticism about the plaintiffs’ standing, stating that the subscribers “lacked standing because the subscribers were not direct purchasers of the NFL or teams since the subscription fee was only purchased through DirecTV.” A ruling upholding the NFL-DirecTV agreement could effectively enable “antitrust agreements to occur with no possible legal remedy.” This decision would still leave consumers with no alternative but to watch out-of-market games,paying the high price for the annual Sunday Ticket subscription.
Although there is currently no lawsuit against the NFL-Amazon agreement, similar antitrust scrutiny is inevitable. A decision in favor of the NFL-DirecTV agreement would set a precedent allowing the exclusive NFL-Amazon agreement to stand. If Amazon has exclusive rights to Thursday night games, there would be no legal safeguards preventing other streaming services from getting exclusive rights to stream other Sunday or Monday night games. Consumers may have no choice but to pay high prices for several different streaming services to view out-of-market NFL games. For fans, the best path forward may be challenging the exclusivity of current streaming deals.
Off the Field and On the Court: NBA Faces Similar Antitrust Scrutiny
The NFL is not the only major sports league that has shifted to broadcasting mainly via streaming services. The NBA, for instance, offers a comparable service to Sunday Ticket – NBA League Pass. However, unlike the NFL, the NBA successfully won its antitrust lawsuit, defending its streaming practices in Kingray, Inc. v. National Basketball Association, Inc.,. In this case, plaintiffs sued the NBA and DirecTV alleging that NBA League Pass violated antitrust laws. The court held that plaintiffs failed to show evidence that NBA League Pass restricted output, as out-of-market games were entirely unavailable before the service was introduced.
A critical difference between Sunday Ticket and League Pass lies in the League Pass’ non-exclusivity. NBA offered League Pass through both DirecTV and iNDemand, which was available on pay-per-view bases through several digital cable providers. Because of the nonexclusivity of the deal, anyone who subscribes to these cable providers has access to League Pass. The NFL could adopt this structure and make Sunday Ticket non-exclusive by offering it through another cable provider, but such a move would likely do little to improve the viewing experience for fans. Unless the court rules in favor of the plaintiffs in the NFL-DirecTV case, fans may still be forced to purchase multiple subscriptions and different packages to view NFL games on a weekly basis.
Overtime: Future of Major League Sports Viewership
As sports betting, fantasy leagues, talented rookies, and unexpected trades continue to fuel interest in professional football, fans are given even more incentives to watch out-of-market games. This growing demand, coupled with the rise of streaming services, underscores the importance of court decisions that protect consumers. A decision in favor of the NFL -DirecTV agreement could have far-reaching implications, potentially affecting broadcasting agreements across other major sports leagues, completely altering the current nature of sports broadcasting. Courts must navigate this evolving playbook to make sure fans are the true winners of the game.