NFL Sunday Ticket Antitrust Litigation v. DirecTV, LLC

A group of aggrieved fans of the National Football League (NFL) formed a class of litigants (the fans) (plaintiffs) and filed suit against DirecTV, LLC (defendant) regarding the company’s Sunday Ticket package, which was the exclusive means to view out-of-market broadcasts of NFL games. The suit alleged that DirecTV’s broadcasting arrangement with the NFL violated the Sherman Act’s antitrust provisions, as, absent the agreement, individual teams would create multiple telecasts distributed across various cable, satellite, and internet platforms. The arrangement, in its simplest terms, was that in-market fans could view NFL telecasts in free over-the-air television via either Fox or Columbia Broadcasting System (CBS). These broadcasts were coordinated by the NFL and the networks, and in exchange for creating those telecasts, the NFL allowed Fox and CBS to broadcast certain games through free, over-the-air television locally. But most out-of-market games could be seen only via DirecTV’s NFL Sunday Ticket package, which bundled all NFL games exclusively for DirecTV subscribers. An additional subscription was required from DirecTV at an annual cost of $251.94 to residential subscribers and from $2,314 to $120,000 to commercial subscribers (depending on the capacity of the establishment screening the broadcasts). At the trial court level, DirecTV filed a motion to dismiss for failure to state a claim upon which relief could be granted. The trial court granted the motion, and the fans appealed. Interestingly, no allegation that the Sports Broadcasting Act applied was made, and on appeal, the broadcasting arrangement was reviewed under the Sherman Act without any statutory exception. DirecTV argued that the fans’ claims were not viable because the claims included a vertical agreement between the NFL and DirecTV, not just a horizontal agreement among NFL teams, and that the telecasts required joint action; thus, the NFL’s restrictions were procompetitive. Finally, DirecTV argued that the plaintiffs had no injury because every NFL game was locally televised. The fans argued that the vertical agreement also brought into play the horizontal agreement, the court should consider both agreements together, the joint-action requirement was illusory and teams could produce their own telecasts/broadcasts/webcasts, and more fans could view more of these broadcasts without the Sunday Ticket exclusivity restrictions.