Philip Gutierrez is leaving with a flourish.
The judge who presided over the Sunday Ticket trial — and who transferred $14.1 billion from the plaintiffs to the NFL in one fell swoop on Thursday — is retiring in October 2024, via Alex Schiffer of FrontOfficeSports.com.
“On October 15, 2024, I intend to retire from regular active service,” Gutierrez wrote in a letter to President Joe Biden in January 2024. “It is my intention to continue to render substantial judicial service as a senior judge.”
Gutierrez served as an L.A. County Superior Court judge from 1997 through 2007. He was appointed to the federal bench by President George W. Bush in 2007. The appointment wouldn’t have happened absent a track record suggesting that his decisions will mesh with the overall Republican, which disfavors public or private regulation of big business. (That’s not a political opinion; it’s an undeniable fact.)
Gutierrez turns 65 two days before his retirement. By rule, that qualifies him for his full current salary in retirement. Nationwide, senior-status judges handle roughly 15 percent of the total workload of the federal courts. It’s voluntary, since the senior-status judge gets his or her full salary anyway.
Meanwhile, the NFL is still looking for a new general counsel.
I’m kidding about the last part. I think.
In Judge Philip Gutierrez transferring $14.1 billion with the stroke of a pen, many around the NFL breathed a deep sigh of relief.
The prospect of each team coming up with $440 million to satisfy the verdict would have had widespread ramifications. (And, obviously, it still could, if the plaintiffs prevail on appeal.)
In the weeks after the $4.7 billion verdict was returned (by law, it would have been tripled), folks throughout the league’s overall infrastructure were realizing that paying it off wouldn’t be as simple as every owner writing a giant check and moving on. Even if there would have been no direct impact on the salary cap (and some owners were already plotting to spread the pain to players), plenty of teams would have been spending less.
For example, Packers quarterback Jordan Love will make, in all, $79 million this year under his new contract. That kind of cash flow would not happen in any year in which the Packers would have had to surrender $440 million for Sunday Ticket liability.
Likewise, there’s a salary cap and a salary floor. More teams would be congregating at the floor, if/when they have to pay the out-of-market piper.
Belts would be tightened elsewhere. Coaches would be paid less. Executives would be paid less. Other non-player employees would be paid less. Layoffs would happen. Even though the owners were responsible for the antitrust violation, they would have found a way to spread the consequences as broadly as possible. That’s just the way business works.
Thursday’s ruling doesn’t mean everything goes back to normal. Until the case is completely and totally over, the possibility of eventually having to pay the money looms. But the league has pivoted in one fell swoop from a position of extreme weakness to a position of extreme strength.
In turn, the plaintiffs are now in a position of extreme weakness. Even though the jury properly found (per the judge) that the Sunday Ticket distribution and pricing violates federal antitrust laws, those who purchased it from 2011 through 2022 will get nothing and like it, barring a successful appeal.
The biggest question is whether anything will change, when it comes to the availability and pricing of Sunday Ticket. Will out-of-market games still be exclusive to YouTube, or whoever buys the Sunday Ticket package in the future? Will the price go down? Will a single-team option be available?
And, ultimately, will every game be available as part of a basic package of network and cable channels? Judge Gutierrez seems to be unable or unwilling to comprehend the basic reality that, if the NFL had to get rid of Sunday Ticket, it would come up with another way to distribute out of market games.
The best way to maximize viewership — and potentially revenue — could be to sell the national home-team packages to CBS and Fox and to sell the rights to the out-of-market games to other networks, from NBC to ABC to ESPN to FS1 to USA, allowing all fans to watch any games they want. Without paying more than $400 per year. Without paying anything more than what they already pay for their cable/satellite/streaming block of options.
To date, the league has opted to restrict out-of-market games to the Sunday Ticket package. If the NFL was forced to disband Sunday Ticket, it would come up with something else. While we’ll have more to say about the decision, Gutierrez decided that he didn’t like the “something else” that the plaintiffs presented through a pair of expert witnesses.
And so, even though Sunday Ticket violates antitrust laws — and even though the jury pegged the damages at $4.7 billion — the judge decided to give the NFL a free pass for past violations. It remains to be seen what that means for the future.
It has to mean something. It’s impossible to think that the Sunday Ticket package violates antitrust law, but that it’s fine for the NFL to do it because judges will continuously reject any effort to conjure a world without it. The easiest solution would be to tell the NFL to disband Sunday Ticket in its current form, and to let nature take its course.
The Sunday Ticket plaintiffs won’t be getting a mulligan on damages, at least not for now. Thursday’s order from Judge Philip Gutierrez ends the case, subject to appeals.
In the 16-page ruling, Judge Gutierrez explains that the plaintiffs’ economic experts failed to provide sufficiently reliable testimony on the world that would have existed but for the NFL’s antitrust violation. (We’ll have plenty more to say about the judge’s rejection of the expert testimony. Without any suitable evidence of economic harm to the class, there was no proven economic harm to the class.
Despite his hostility to the plaintiffs’ case on damages, Judge Gutierrez had no qualms with the jury’s finding that an antitrust violation occurred.
From the order: “Despite finding Dr. Rascher’s and Dr. Zona’s opinions unreliable, the Court does not find that it would be unreasonable for a juror to find that there was a conspiracy that unreasonably restrained trade. . . . There was evidence in the record—even without the testimonies of Dr. Rascher and Dr. Zona—to support a reasonable jury’s finding of an unreasonable restraint of trade at each step of the rule of reason. . . . Given a reasonable jury could find that there were anticompetitive effects, that Defendants’ procompetitive justifications were pretextual or unrelated to the restraints, and/or that there were less-restrictive alternatives based on the record, judgment as a matter of law is inappropriate on these grounds.”
In other words, the judge upheld the finding that Sunday Ticket, as constructed, violates federal antitrust laws. So why not issue an order disbanding it?
For now, the reality is that Judge Gutierrez has blocked more than 2.4 million residential customers from receiving a partial refund for the money they paid for an out-of-market package that was deliberately overpriced in order to encourage people to not buy it, and to watch in-market games on CBS and Fox instead.
Again, we’ll have more to say about the judge’s rejection of the damages case. Either he’s wrong or the plaintiffs’ lawyers screwed up the case.
Either way, the consumers who paid too much for Sunday Ticket have lost.
And the NFL has won.
The NFL has snatched legal victory from the $14.1 billion jaws of defeat, thanks to a ruling by Judge Philip Gutierrez.
On Thursday night, the NFL issued a statement acknowledging the decision to overturn the verdict.
“We are grateful for today’s ruling in the Sunday Ticket class action lawsuit,” the league said in a statement. “We believe that the NFL’s media distribution model provides our fans with an array of options to follow the game they love, including local broadcasts of every single game on free over-the-air television. We thank Judge Gutierrez for his time and attention to this case and look forward to an exciting 2024 NFL season.”
The case won’t end. The ruling will be appealed. Previously, a judge threw out the entire case, and the U.S. Court of Appeals for the Ninth Circuit reinstated it.
There’s also the question of whether the finding of an antitrust violation arising from the pricing and distribution of Sunday Ticket will stand. We have the order, and we’ll scour it for information and other clues.
The jury giveth. The judge taketh away.
Per multiple reports, Judge Philip Gutierrez has overturned the $4.7 billion verdict against the NFL in the Sunday Ticket antitrust class action. The ruling comes one day after a three-hour hearing on the NFL’s attack on the jury’s decision.
The verdict, if upheld, would have automatically become a $14.1 billion judgment.
Via Eriq Gardner of Puck, the judge found the plaintiffs’ economic experts to be unreliable, and the jury’s award to be based not on the evidence and reasonable inferences but guesswork or speculation.
We’ve asked both sides for comment, and we’re trying to get our eyes on the official order. There seemed to be more than enough evidence to support a finding of an antitrust violation. The problem seemed to be damages.
That could mean a new trial or it could mean a $1 verdict.
Regardless, the case is destined to continue to churn through the court system. Far too much money is at stake.
We’ll have more once we get more. The official order will have plenty of clues as to what it means, and as to what comes next.
The NFL’s owners typically meet four times per year. Sometimes, they have special meetings.
The issue of private equity has suddenly become sufficiently special.
Ben Fischer of Sports Business Journal reports that Commissioner Roger Goodell has asked the 32 owners to set aside Tuesday, August 27 for a potential league meeting on the long-expected rule to allow teams to sell a portion of the franchise to private-equity funds.
The meeting will happen if the committee formed to address the issue finishes its policy. For now, the Commissioner wants the owners to be ready to meet.
It’s expected that teams would be allowed to sell up to 10 percent to a private-equity fund. Plenty of other details need to be worked out, including the approved funds and whether funds would be allowed to acquire equity in multiple teams.
Last month, Goodell didn’t rule out the possibility of the 10-percent ceiling potentially moving higher.
The owners currently are due to meet in October, roughly six weeks after the planned special meeting. So why the rush?
It would be foolish to not at least consider the possibility that a sense of urgency has been created by a certain pending liability of $14.1 billion from the Sunday Ticket case, which if upheld would cost each team roughly $440 million each. For the owners who can’t just snap their fingers and manifest the money, selling a slice of the team could be the key to raising the cash.
And even though the reckoning could be several years away, it makes sense to start the rainy-day fund for the potentially coming monsoon.
With a jury finding in late July that the NFL’s Sunday Ticket package as currently constituted violates antitrust law, a major question remains unanswered.
Will the NFL make changes to Sunday Ticket, given the $4.7 billion verdict?
Per a source with knowledge of the situation, the NFL anticipates making no changes.
That strategy carries significant risk. The class action covers 2011 through 2022. Already, the league has exposure for 2023, the first season of the shift from DirecTV to YouTube. It will now risk further liability in 2024 and beyond. By the time the appeals process concludes, the league might have three or four (or maybe even five) more years of refunds to eventually make.
The NFL also could guess right. If the league ultimately wins the case via the trial court judge or the two levels of available appeals, the status quo will be validated.
There’s another potential development that could occur. Even if Judge Philip Gutierrez overturns the damages award or orders a new trial on damages, it’s hard to imagine (based on our review of the full trial transcript) that he will scrap the finding of an antitrust violation. One of his biggest complaints during the case was that the basic theory was simple and clear — the NFL banded together to sell the out-of-market games in a way that protected the CBS and Fox audiences for in-market games.
As he said in court on June 18, 2024, “I thought, you know, going into this, you might have had the edge because, again, that’s an easy story to tell: I’m a poor Seattle Seahawks fan in Los Angeles and I’ve got to pay more.”
If Judge Gutierrez upholds the finding of an antitrust violation, he could issue a court order disbanding the current Sunday Ticket structure. That would prompt, presumably, expedited appeals to undo the court order. However, if he opts for what’s known as injunctive relief, there will be a court order requiring the NFL to stop selling Sunday Ticket the way it has sold Sunday Ticket since its inception in 1994.
At trial, the NFL used “chaos” as the primary response to any and all potential alternatives to its longstanding out-of-market product. Chaos will be more than a talking point if Judge Gutierrez issues an order between now and Week 1 telling the NFL to pull the plug on Sunday Ticket, in its current form.
On Wednesday, the judge presiding over the Sunday Ticket antitrust trial heard arguments on the NFL’s effort to scrap a $4.7 billion verdict. The article from Joe Reedy of the Associated Press contains an eyebrow-raising claim about what the presiding judge said.
Per the article, Judge Philip Gutierrez said the jury did not follow his instructions in determining damages.
If that’s what Gutierrez concludes, the verdict could be in grave danger. The judge could reduce the damages to $1. Or he could order a new trial on that issue.
But here’s the one caveat I’ll apply to the AP article. There’s no direct quote from Gutierrez. And the full transcript of the hearing could paint a somewhat different picture.
That’s based on experience. From this same case. From that same outlet. The AP article regarding Gutierrez’s concerns about the plaintiffs’ case, as articulated in court in June 18, were undermined by the full content of the transcript. Yes, Gutierrez expressed concerns about the plaintiffs’ case. After the plaintiffs’ lawyer explained the case, the court seemed to back off.
So, with all due respect to Reedy and the AP and anyone else present at the hearing, we’ll be getting the transcript from today and reading it all. It’s entirely possible that Gutierrez said exactly what he said, without anything else said during the hearing softening it. It’s also possible that the full context of the remarks paints a different picture.
That said, if Judge Gutierrez said the jury didn’t follow the instructions and if that’s his conclusion, the plaintiffs have a very real problem.
On Wednesday, the NFL sent a team of lawyers to court to fight the $4.7 billion antitrust verdict issued in the Sunday Ticket class action. After the hearing, the league issued a new statement regarding the case.
“Today we asked the district court to set aside the jury’s verdict in this case, which is contrary to the law and unsupported by the evidence presented at trial,” the NFL said in comments emailed to PFT. “The NFL’s media distribution model is the most fan friendly in sports, with all games broadcast locally on free over-the-air television in addition to many other choices available to fans who want even more access to NFL content. We will continue to pursue all avenues in defense of the claims brought in this case.”
We invited the plaintiffs’ lawyers to send a statement of their own. As of this posting, they have not yet done so.
The case arises from allegations (accepted by a jury) that the NFL’s 32 teams banded together and overcharged for out-of-market games through Sunday Ticket in order to ensure that many would choose to watch “free over-the-air” games available in each local market. The apparent goal was to maximize earnings from DirecTV for out-of-market games and earnings from CBS and Fox for in-market games.
The NFL has the right to challenge the verdict. The NFL could win, either at the trial court level or on appeal.
Meanwhile, there has been no indication that the NFL will change the model for out-of-market games in the aftermath of last month’s verdict. If anything, today’s statement reflects an intention to continue to do what the NFL has been doing since Sunday Ticket debuted in 1994.
As expected, Wednesday’s hearing regarding the Sunday Ticket case didn’t result in a ruling from the bench.
Via A.J. Perez of FrontOfficeSports.com, Judge Philip Gutierrez took the matter under advisement, after three hours of proceedings in court.
Rulings from the bench aren’t common, but they happen. They usually happen only when the outcome is clear, in the opinion of the presiding judge.
Last month, an eight-person jury found that the NFL’s Sunday Ticket package violates federal antitrust laws. The jury awarded $4.7 billion in damages. If/when the verdict becomes a formal judgment, the total liability automatically triples (by law) to $14.1 billion.
The judge can grant full judgment notwithstanding the verdict to the NFL, he can throw out the damages award, and he can order a new trial. He also can find that the law doesn’t require him to overturn the work of the jury, upholding the entire verdict.
Whatever decision he makes will be appealed. And judges hate to be overturned by appellate courts. It amounts to a public rebuke of the judge’s work.
So, ultimately, Judge Gutierrez likely won’t be guided by what he thinks is right or wrong or fair or unfair but by what he thinks is more likely to be upheld when the case ultimately makes its way to the U.S. Court of Appeals for the Ninth Circuit.
