US: NFL and DirecTV must face antitrust case over “Sunday Ticket” TV rights

A federal appeals court on Tuesday, August 13, revived a putative class action alleging the National Football League’s (NFL) telecasting agreement with AT&T’s DirecTV unit unlawfully blocked competition.

The case, which had been dismissed by a federal district court, alleges that the Sunday Ticket package eliminates competition in a given market for the live telecast of NFL games. Absent the global, buy-all-or-buy-none Sunday Ticket option, the NFL’s teams could make individual games available through other platforms, from free TV to cable to satellite to Internet, competing against each other and making the specific game(s) that a given customer wants to watch easier and cheaper to obtain. The US Court of Appeals for the Ninth Circuit decided to reinstate the case, and to allow it to proceed.

In 2017, a federal district court judge rejected that argument, but on August 13, Ninth Circuit Court Judge Sandra Ikuta led a majority decision reversing that prior dismissal, saying the plaintiffs have a claim that should be heard for a potential Sherman Antitrust Act violation.

The legal opinion reads in part: “We conclude that the complaint adequately pleads that the vertical NFL-DirecTV agreement works in tandem with [NFL teams pooling telecast rights] to restrain competition.

“Defendants have failed to identify, and we are unaware of, any binding precedent requiring the teams and the NFL to cooperate in order to produce the telecasts.”

The ruling arrives as AT&T and the NFL enter the final two years of their eight-year, US$12 billion NFL Sunday Ticket contract.