About one year ago to the day, the NFL took a shocking loss in court. A jury found the league liable for billions of dollars in damages resulting from antitrust violations stemming from its NFL Sunday Ticket deals with DirecTV. In short, the jury ruled that the NFL priced Sunday Ticket artificially high to prevent undercutting the value of its in-market Sunday afternoon packages with CBS and Fox.
The league has appealed that ruling, and litigation remains ongoing. But the case has opened Pandora’s box regarding possible remedies should the NFL be held liable for its business practices and, ultimately, is forced to change the way it distributes Sunday Ticket. One such remedy that would have NFL fans doing backflips is the possibility of purchasing single-game or single-team packages rather than requiring consumers to buy an entire season-long offering. Those options would, hypothetically, be more affordable and give fans optionality.
Unfortunately, according to two industry experts speaking on the topic this week, those ideas are likely pipe dreams.
Let’s start with Pro Football Talk’s Mike Florio, a former attorney who has been covering this lawsuit closely since its inception. Here’s Florio on PFT PM earlier this week, making the case that the NFL has friends in high places at the U.S. Supreme Court, and therefore will never be forced to capitulate to any unfavorable rulings in lower-level courts.
“Look, the potential for future liability is in plain sight. [The NFL] haven’t changed their ways. They’ve done nothing. They’ve done nothing. I mean, when they talked to Apple about taking over Sunday Ticket, Apple wanted to make it, I believe, ridiculously cheaper or wanted to provide an option to go team-by-team or game-by-game. Ideally, if the customer was right, the customer would have the option to just buy one game at a time, one weekend at a time, one team at a time, something other than, ‘If you want to watch any out-of-market games, you’ve got to pay for the privilege of watching every out-of-market game.’
“That, according to the jury who reached the decision roughly a year ago to the day, is an antitrust violation. And if the NFL ultimately loses, billions, billions will be on the line. It will be a massive, massive obligation for the league and its teams to satisfy if this thing goes haywire.
“And I think they believe their ace in the hole is the U.S. Supreme Court. If and when they get to the Supreme Court, they believe they’ll get at least a six to three ruling allowing them to keep doing whatever they’ve been doing and finding that everything they do is fine and dandy. And that’s not a political comment, it’s a political reality of the background, the mindset, the judicial history of the nine members of the U.S. Supreme Court. And the way those people were appointed, it’s that simple. Six to three, the NFL will win. They’ll spend a lot of money in legal fees to get there, but not nearly as much as if they lose that verdict and if they’d have to change their ways and completely reconfigure the way that out-of-market games are made available.”
Now let’s turn to former Fox Sports executive Patrick Crakes, speaking with The Athletic, who makes an economic argument as to why the NFL is justified in charging a premium rate for its out-of-market games.
“The core issue here is how game inventory is valued for different leagues. For the NBA, NHL and MLB team season passes, the game inventory is monetized regionally with telecast partners across six-month-long regular seasons. In contrast, 100 percent of the 272 NFL’s regular season games are monetized nationally to include the majority of games that air during Sunday daytime and are regionalized across two windows (1:00 pm and 4:25 p.m. ET). This works out to only 17 regular season games for each team across only 18 weeks.
“This scarcity in game inventory combined with the extreme viewing demand for the NFL means every single regular season game has national strategically significant economic value for the most important media distribution platforms such as broadcast TV networks (ABC, CBS, FOX, NBC), top pay-TV channels (ESPN) and top streaming platforms (Amazon Prime Video, Google, Paramount+, Peacock and Netflix). These are the ones that can afford to pay $13.3B overall in 2024 alone for America’s by far most popular and valuable media property. These mega-strategic NFL telecast partners need some type of exclusivity for their NFL investments.
“When you consider the NFL’s requirement that there will always be a free over-the-air broadcast signal for each game regardless of its national telecast partner, you can see how, from the NFL’s perspective, they believe they’re fully serving local and national fans while also serving out-of-market ultra fans. They believe the NFL Sunday Ticket on YouTubeTV remains the best way for the most passionate of NFL viewers to gain access to as many games on Sunday afternoons as possible while maximizing per game economics.
“If your anchor is the per-game pricing for a NBA, NHL or MLB regular-season local package then any such hypothetical NFL package is going to look astronomical by comparison. For example, MLB’s most expensive team season local passes are around $120 annually or about 75 cents per game over 162 games. Taking the total paid by NFL telecasters ($13.3B) last year and dividing it by the total number of NFL regular season games (272), you get an individual NFL regular season game value of $48M. That figure alone should tell you that you’re going to pay a significant premium for a NFL team season pass because the per-game value of your local team is derived via a national market and not local/regional one. Unfortunately, there’s probably no route to single NFL team passes in the near future.”
Both arguments, taken together, paint a rather bleak picture for any fan hoping to purchase a single-game or single-team NFL package one day. Crakes’ point is precisely why the jury’s ruling one year ago was such a shock. The NFL had a sound argument that it is actually the most accessible pro sports league in America. No other league is giving every game away for free within a team’s local market. Having access to every out-of-market game isn’t a birthright, either.
But there’s certainly something to be said about whether the NFL’s business practices — essentially coercing its Sunday Ticket provider to charge a premium price to protect its other broadcast partners — fall under the antitrust exemption federal lawmakers granted the league back in 1961. That point alone might make this a messy ordeal for the league as it simultaneously finds itself fighting a perception of collusive behavior against its own players.
The merits of that antitrust argument may well be enough to take this case all the way to the U.S. Supreme Court. As Florio suggests, whatever the league would pay in legal fees would be a penance compared to what it stands to lose should it be forced to restructure the entire way it sells broadcast rights.
Surely, the league is hoping the case doesn’t go that far and that a favorable ruling can be obtained in a lower court. The stakes are very high, and the NFL won’t settle for any decision that upends the status quo. And based on both the judicial and economic arguments put forth by Florio and Crakes this week, it seems like the league, one way or the other, is confident the status quo will stay just that. If the league were truly worried, we would’ve already seen changes to the way YouTube delivers Sunday Ticket.
But so far, everything remains the same. Just how the NFL would like it.