According to the article, a jury recently ordered the National Football League (NFL) to pay more than $4.7 billion for antitrust violations surrounding its “Sunday Ticket” package, which lets fans watch games outside of their home markets but required them to buy access to a bundle of games to do so.

Because of the case’s nature as an antitrust matter, the verdict could be tripled if upheld, putting the NFL on the hook for $14.1 billion in damages. But the league, America’s most popular source of television programming, has already vowed to appeal.

The verdict is large enough that if it withstands appeal, it would be a financial blow even to America’s richest, most popular and profitable sport. The NFL’s annual revenue was more than $18 billion last year, according to estimates, and Commissioner Roger Goodell has set an annual revenue target of $25 billion by 2027. Rights fees are the major driver of that revenue stream, but this decision could shake up those deals and others across professional sports, changing the way teams make money.

“Sunday Ticket”

The case, first brought in 2015, focused on the NFL’s package of games outside of a local market that are not shown nationally on other networks. Attorneys for the plaintiffs in the class action suit argued that by restricting broadcasts of those “out-of-market” games to the “Sunday Ticket” package, the NFL is forcing customers who just want to watch one team or a small group of teams to pay more.

“Given the relatively low cost of internet streaming and satellite and cable television carriage, each team acting independently would offer their games at a competitive price to anybody in the country who wanted to watch that particular team,” the plaintiffs’ attorneys argued in a filing. “Instead, however, the teams have all forgone this option in favor of creating a more lucrative monopoly.”

The Jury Verdict

Bill Carmody, the lead attorney in the case, told the media that the Los Angeles jury was out fewer than two hours.

“Justice was done, and it was a great day for consumers everywhere,” he said. “It was a real decisive win.”

During arguments, the plaintiffs had argued that fans of specific teams should be able to buy packages of just the games they want to watch, not the entire league’s worth of out-of-market games. But the jury did not rule on whether that will happen now. It only issued a decision on the amount of damages.

“I don’t know, I sure hope so,” Carmody said when asked if individual game or team packages would now be offered. “That question is something the court is going to deal with separately.”

The NFL’s Response

The NFL has argued that it provides the best value for its fans to watch a wide selection of games for free on broadcast networks, and other games without additional charge for those who have cable, satellite or streaming services.

“We are disappointed with the jury’s verdict today in the NFL Sunday Ticket class action lawsuit,” the NFL said in a recent statement. “We continue to believe that our media distribution strategy, which features all NFL games broadcast on free over-the-air television in the markets of the participating teams and national distribution of our most popular games… is by far the most fan friendly distribution model in all of sports and entertainment. We will certainly contest this decision as we believe that the class action claims in this case are baseless and without merit.”

The case focused on the package as it had been offered by DirecTV, which had held the exclusive Sunday Ticket package until it lost it to Google-owned YouTube TV at the start of last season, which the Wall Street Journal reported cost $2 billion a year. YouTube charges fans $449 a year for the package.

Discussion Questions

1. Define the terms “antitrust” and “monopoly.”

The term “antitrust” concerns a collection of laws that regulate the conduct and organization of businesses to promote fair competition and prevent monopolies. In the United States, antitrust law is primarily governed by three major federal statutes: (1) The Sherman Act of 1890, which outlaws all contracts, combinations, or conspiracies that restrain trade and any monopolization or attempts at monopolization; (2) The Federal Trade Commission Act of 1914, which bans unfair methods of competition and unfair or deceptive acts or practices; and (3) The Clayton Act of 1914, which addresses specific practices that the Sherman Act does not clearly prohibit, such as mergers and acquisitions that may substantially lessen competition.

Collectively, these laws aim to protect the process of competition for the benefit of consumers, ensuring that there are strong incentives for businesses to operate efficiently, keep prices down, and maintain high quality. They prohibit unlawful mergers and business practices in general terms, leaving courts to decide which ones are illegal based on the facts of each case. Antitrust laws have been applied to a range of markets and industries, adapting to the changing landscape from the era of “horse and buggies” to the present digital age.

The enforcement of these laws can be both civil and criminal, with penalties for severe violations including substantial fines and imprisonment. The antitrust laws are a fundamental part of U.S. economic policy aimed at ensuring a competitive market for consumers and businesses alike.

The term “monopoly” refers to a market structure in which a single producer/seller has a dominant position in a particular industry. Monopolies are frowned upon in “free market” economies because they stifle competition and limit consumer substitutes, thereby limiting consumer choice.

2. Should the government regulate the NFL and its product offerings? For example, in a “free market” economy, why should the government even be concerned that the NFL charges its fans $449 per year for “Sunday Ticket?”

These are opinion questions, so student responses may vary. Your author questions whether there can ever be a free market in professional football in the United States, especially given the fact that the NFL is essentially a monopoly regarding professional football. There is the start-up United Football League (UFL), a merger of the XFL and the United States Football League (USFL), which was founded on December 31, 2023; however, according to some accounts, the UFL is “minor league” and does not really compete with the NFL so much as it identifies potential talent for it.

In terms of why the government should even be concerned that the NFL charges its fans $449 per year for “Sunday Ticket,” the reality is that were it not for the monopoly status of the NFL, the league would not be able to charge fans nearly as much. As indicated in the article, with its “Sunday Ticket” package, the NFL takes an “all or nothing” approach regarding viewership. Fans must purchase the entire bundle of games, rather than purchase “a la carte” the games of one team or a small number of teams.

3. Is the NFL itself a monopoly over professional football? Explain your response.

In short answer, yes!

In the 1980s, the United States Football League (USFL) was an upstart professional football league in the United States (comparable to the now-defunct XFL and the currently existing UFL). Its owners filed a lawsuit against the National Football League for violation of the Sherman Antitrust Act. The USFL sought actual damages of $567 million dollars which, when trebled, would amount to more than $1.7 billion.

Chief among the USFL's arguments was that the NFL, which had contracts with ABC, NBC and CBS, had pressured the networks to not televise the USFL in the fall. The league also claimed that the NFL had followed the practices outlined in the Porter Presentation, a package compiled by a Harvard professor to show the NFL how to conquer its new competitor. In particular, the USFL maintained that the NFL had conspired to harm the Oakland Invaders and New Jersey Generals, two USFL teams.

On July 29, 1986, the USFL “won the battle but lost the war” against the NFL. Although the jury decided that the NFL had monopolized professional football and used predatory tactics, the jury awarded the USFL only $1 in damages. The fact that the antitrust award was trebled (tripled) to $3 due to the NFL’s unfair and deceptive trade practices was of little solace to the struggling USFL. Essentially, the jury held that although the USFL was harmed by the NFL’s monopolization of professional football, most of the USFL’s problems were the result of the league’s mismanagement.