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.
The Sunday Ticket trial ultimately focuses on whether the NFL violated the antitrust laws by overpricing Sunday Ticket in order to encourage fans to watch games at no extra charge on CBS and Fox instead.
Earlier in the trial, Fox executive Larry Jones testified, confirming that Fox didn’t like Sunday Ticket. On the ninth day of the case, former CBS Sports chairman Sean McManus took the stand.
There were no surprises in his testimony. (The one thing he said that I didn’t previously know was that his father was legendary broadcaster Jim McKay.)
McManus confirmed that he didn’t like Sunday Ticket. He didn’t like it because, if fans purchased it, the CBS games broadcast in a given market would suffer “lower television ratings, fewer people watching our broadcasts, and a lessening of our advertising sales since the sales are based on how many people are watching your game.”
“So if,” McManus said, “there’s competition in an individual market and fewer people are watching CBS, that affects our revenue and our television ratings.”
He felt the same way about RedZone; if it were up to him neither product would have existed.
By the time he testified, it was all predictable. One wrinkle that wasn’t obvious in advance, but that helps illustrate what out-of-market games could be without Sunday Ticket, relates to the proliferation of March Madness games as of 2011, when CBS and Turner Sports partnered up.
From the transcript:
Q. And viewership increased considerably as a result of this. Right?
A. It increased, yes. Q. In fact, the ratings exceeded even CBS’s expectations; right?
A. Yes.
Q. And in 2011, March Madness had the best overall ratings it had in years; right?
A. Yes.
The NFL could do the same thing with out-of-market games. CBS and Fox broadcast games tailored for the various markets, and other no-extra-charge networks televise the rest of the games at 1:00 p.m. ET on Sunday (and in the late windows).
But the NFL’s party line when it comes to potentially putting all games on TV is that the end result would be chaos.
“I think if that were the case, I think it could be chaos in the marketplace just in terms of the marketing, the selling, the producing, and the programming of games,” McManus said. “And obviously, the NFL package would not have anywhere near the value to us that it has at the — in the current agreement.”
It’s easy to say that without knowing what would happen. Given the immense popularity of the NFL, it’s easy to think that if all games were televised, more people would watch — and more money would be made. Maybe CBS and Fox would pay less for the in-market games. The other networks, collectively, would pay a lot more than what the NFL is currently getting for Sunday Ticket.
Today is the day.
That’s not just an existential observation. Today’s the day the Sunday Ticket case goes back to court, on the question of whether Judge Philip Gutierrez will grant judgment to the NFL notwithstanding the jury’s verdict or reduce the damages to $1 or order a new trial.
The rules authorize the judge to modify or scrap a verdict, under certain specific circumstances. Without going full law nerd, it’s highly unlikely (based on my review of nearly 2,000 pages of the 2,506-page transcript) that the judge will throw out the verdict on the issue of liability. The record is replete with evidence that would support a jury verdict that the NFL violated the antitrust laws based on the distribution and pricing of out-of-market games through Sunday Ticket.
The potential weakness comes from the damages case. The judge made it clear, on the morning of June 18, that he didn’t think much of the “but-for” world created by the expert witnesses hired by the plaintiffs. Although the plaintiffs’ lawyer did a nice job of walking the judge back from the brink of throwing the case out, the judge could still conclude that the calculations from Dr. Rascher and Dr. Zona were bunk.
That’s why it wouldn’t shock me to see a new trial ordered on the issue of damages, eventually.
Or maybe not. Because the real world was infected by the NFL’s antitrust violation, the plaintiffs have no choice but to construct an alternative universe and to put a dollar value on the difference between the actual cost for consumers and the hypothetical cost, if the defendants hadn’t broken the law.
If there was a new trial, and if the plaintiffs tried to introduce a better “but-for” world that would have played out without the NFL violating the antitrust laws, the NFL would still fight anything/everything the plaintiffs advance, claiming for instance that whatever the plaintiffs suggested as a non-antitrust violation would create “chaos” or that it wouldn’t be practical or that the economic model is bullshit or whatever.
The NFL had the chance during the trial to present a witness who would have presented a clear and reasonable formula for the cost of Sunday Ticket in a world without the league collectively selling the rights and insisting on a price structure that overcharged those who bought it, in order to nudge most fans toward watching games in their local markets on CBS and Fox. The NFL chose not to even try to suggest a “but-for” world, opting instead to plant a flag and stomp their feet on the notion that they did nothing wrong.
Judges tend to respect jury verdicts. We’ll see what Judge Gutierrez does with this massive (but not unreasonable) jury decision. No matter what he does, appeals are inevitable. Too much money is at issue.
Speaking of money, if the verdict becomes a formal judgment and triples to $14.1 billion, the judge will have to set an appeal bond. That alone could create a significant short-term financial issue for the NFL.
So stay tuned. Today will be another interesting day in what has been a very interesting case. Even if it still hasn’t drawn as much interest as it should from the media at large.
All too often, facts can get in the way of a good argument. That dynamic plays out frequently in court.
Trials often become more about messaging than truth. And if the adversary isn’t ready to counter the effort of one side to paint a picture that doesn’t mesh with reality, the false impression can take root.
In the Sunday Ticket case, for example, a skirmish emerged on a couple of occasions regarding the question of whether the NFL allowed DirecTV to make the streaming version of Sunday Ticket available to the military, their spouses, and veterans. Both sides recognized the power of pandering to jurors who might have strong feelings about the men and women who protect us at home and abroad, so both sides pushed their predictable positions on whether the league did, or didn’t, facilitate Sunday Ticket for those who serve.
The end result is that, yes, games are available to active military members via the Armed Forces Network. However, the NFL (based on its own internal documents) did indeed refuse in 2017 to permit DirecTV to expand eligibility for Sunday Ticket streaming to members of the military, their spouses, and veterans.
Another side issue that could have emerged didn’t. With the NFL constantly harping on the obsession with making all games of all teams available in their local markets on free TV, the plaintiffs failed to pounce on a very important point. For the first four years of the 11 seasons covered by the class action (2011-22), the NFL had a blackout rule that threatened to take home games off the air in local markets if the games weren’t sold out.
The blackout rule — which at one point applied even if the games were sold out (President Richard Nixon helped end that practice) — came under political assault in the early years of the last decade, with the FCC voting to dump the blackout rule and Senator John McCain proposing legislation that would have ended it for all stadiums that received taxpayer funding.
In 2014, the NFL hired Hall of Fame receiver Lynn Swann to make a clunky, awkward case for keeping the blackout rule in order to protect free football on TV. Even though the the blackout rule kept games off of free TV.
Here’s an article from August 2, 2014 on the NFL’s owned-and-operated website regarding an appearance by Swann on the NFL’s owned-and-operated TV network. Good luck making sense of anything Swann said in trying to justify the blackout rule as a boost for football on free TV. (And do not click the link to the NFL’s “Protect Football on Free TV” website at the bottom. If you did, we tried to warn you.)
Here’s another article from July 17, 2014, full of self-serving arguments aimed at justifying the decision to keep games off of free TV in the local market if the local stadium isn’t sold out. (The same warning about clicking the link to the NFL-created blackout rule propaganda website applies.)
With the NFL trying to justify the antitrust violations inherent to the Sunday Ticket product by wrapping themselves in the flag of “free TV,” the plaintiffs blew an opportunity to point out that the league didn’t suspend the blackout rule until 2015. Which kept games off of free TV when local residents failed to stuff sufficient money into the box office. Which tends to apply a massive asterisk to the league’s attempt to distract the jury from Sunday Ticket’s legal deficiencies by proclaiming as often as possible, “We put every game on free TV in the markets where the teams play.”
They do now. For the first four years of the 11-year period covered by the class action, they didn’t. And if the FCC and John McCain hadn’t been poised to make them get rid of the blackout rule, there’s a good chance the blackout rule would still be in place today.
It’s not as if the missed opportunity hurt the plaintiffs. They still won a $4.7 billion verdict, which will be multiplied by three if/when it becomes an official judgment. But maybe the number would have been closer to the $7 billion the plaintiffs requested, if they had managed to hoist pro football on its own “free TV’ petard.
The shoddy, sporadic coverage of the Sunday Ticket trial took a sharp turn toward thorough and comprehensive on June 18.
That’s the day Judge Philip Gutierrez aired out his frustrations about the case as presented by the plaintiffs.
In fact, the only unsolicited communication we’ve received from the NFL regarding the case came that day, when the league office alerted us to one specific tweet from Joe Flint of the Wall Street Journal.
“You really have nothing,” Gutierrez told the plaintiffs’ lawyers in open court, via Flint. “It’s a total disconnect.”
Later that day, Joe Reedy of the Associated Press authored an item highlighting the judge’s concerns.
“The way you have tried this case is far from simple,” Gutierrez said, via Reedy. “This case has turned into 25 hours of depositions and gobbledygook. . . . This case has gone in a direction it shouldn’t have gone.”
While neither account is inaccurate, both are incomplete. Review of the full transcript shows that, after Judge Gutierrez aired his grievances, something important occurred.
Initially, Gutierrez complained about various aspects of the plaintiffs’ case. Most importantly, he expressed regret that he hadn’t barred both of the plaintiffs’ damages experts — Dr. Daniel Rascher and Dr. John Zona — under the so-called Daubert standard, which requires presiding judges to serve as the gatekeepers for expert testimony.
“This case is out of control.,” Gutierrez said. “I — frankly, you know, I’m struggling in my own mind -- I think there’s a viable chance for a Rule 50 [judgment as a matter of law for the NFL] in this case because I think -- I think I probably should -- may have -- should have granted the Daubert motions as to Zona and Rascher. But we’ll face -- we’ll cross that when we come to it, but I think -- I’m struggling with plaintiffs’ case right now.
“And I’m not sure if I’m struggling because, to me, when you’re taking depositions and playing gobbledygook with an economic expert, you really have nothing.
“So I’ll think about it. I’m -- you’re right, I -- I totally agree with you that, again, we wasted time yesterday. . . .
“Because [Rascher] had his -- he gave us his best shot, and I don’t think much of his best shot. And I don’t think much of Zona’s best shot. And I’m just here regretting not granting the Daubert motions maybe. Because what you do is you reconsider the -- the Daubert motions and then, once you grant the Dauberts, there’s nothing left.”
It sounds bad for the plaintiffs. Especially since the judge has the power to take away the entire verdict, if he decides that the testimony of the expert witnesses should have been barred under the Daubert standard.
The reporting from that specific day, however, ignored what happened next. Marc Seltzer, one of the lawyers representing the plaintiffs, seemed to walk Gutierrez back from the brink of throwing the case out of court.
It happened after Gutierrez explained that he has a “real problem with the but-for world” that the plaintiffs’ experts created, an alternative universe in which there had been no antitrust violations.
“This whole thing that pro football, the but-for world is [the] college [football television model], it doesn’t make any sense to me because the but-for world doesn’t -- is not based in reality because it doesn’t -- during the class period, you want to just pretend that live streaming was a real option, and it wasn’t,” Gutierrez said. “I don’t know what this would look like under a college model.”
That’s when Seltzer might have saved the case.
“Obviously,” he said, “no one could ever know what the but-for world would have been. . . . It’s always a hypothetical construct. . . . And the issue in the case is whether or not that restriction on the number of telecasts that can be seen is anticompetitive. It’s a restriction on output. And that restriction, in turn, has led to the higher prices that are charged for Sunday Ticket, which is a deliberate part of the overall broadcasting system as has been described to you by the witnesses.
“So the reason why college football is such a good benchmark, it shows you what happens before and after once the restraints are lifted. After the restraints were lifted [in the 1980s], it took a matter of just a few weeks for college football to reconfigure and to have individual conferences and teams make contracts that they wish to make. And then the number of telecasts multiplied dramatically, the prices went down in terms of the licensing fees that can be charged because it wasn’t centralized, it wasn’t controlled. And that was a vivid demonstration of what happens once the restraints are relaxed.”
That’s when Gutierrez called the case a “total disconnect.” He explained that, as a Notre Dame fan, he wouldn’t pay to watch certain games that weren’t on basic cable.
“Part of their model said, ‘Oh, I’m going to watch West Virginia and Notre Dame play on the ACC channel,’” Gutierrez said. “I ain’t paying for it. So it’s just, to me, like it’s a total disconnect.”
Enter Seltzer, again.
“I understand, Your Honor,” he said. “But here’s the point. When an economist and a smart business firm makes decisions about what to do, they look not at the choices one individual makes. It’s the choices of the millions of people, and that adds up to consumer demand. And what the record shows in this case very, very strongly is that there is a pent-up demand to see these out-of-market games which this system has not satisfied. In fact, what it did, it squeezed the demand, it squelched what the available sources were.
“It was like taking a hose and constricting the hose so you only have a small dribble of the games, and then you can raise the price because, according to the record, there are 35 million avid fans, 75 million -- or 70 million others who would have chosen to get out-of-market games if the —
“That’s why I raised myself as an example,” the judge interjected. “I mean . . . that’s an assumption, isn’t it?”
“No, no, no,” Seltzer insisted. “The study that the NFL made, the internal documents that are part of their record in this case, show that they knew that there were 35 or 70 million, depending how you count them, million avid NFL fans who would have chosen to see these out-of-market games if they had the chance to do so.
“And the point of the . . . but-for world is that, if you didn’t have these restraints, those games wouldn’t have been available on — not for an additional premium that was charged, not for an additional subscription price; it would have been included in the over-the-air television or basic cable as — as part of the ordinary channels you get without paying extra. That’s the point of the comparison, and that’s exactly what happened when the college football restraint was lifted.”
It apparently worked. Here’s what Gutierrez said next: “I’m glad we’re having this candid discussion, it’s helpful. And I just don’t know what those people are going to do. . . . When this case started -- you know, as I worked for a couple of years on this case, I thought it was a simple case. . . . And the way you talk about it now is simple. But the way this case has been tried, it’s far from simple. And I’m just -- to me, it’s a total disconnect because I can -- what I’m talking to -- you know, among colleagues and they say, What’s this case about? And I can talk — much like you just said, I can say the plaintiffs say -- I can -- just like you just did, in five minutes, I understand your case. . . but this trial hasn’t been played out that way.”
“Well,” Seltzer said, “the trial necessarily comes in as a mosaic. You get bits and pieces of the case from different witnesses and the experts, but that’s really what the case is about.”
“I mean, when I talk to a colleague, ‘What’s this case about?’” Gutierrez said. “I’ll say, ‘Well, you know, if you were a Seattle Seahawk fan and you live in Los Angeles and you wanted to watch the Seahawks, you got to buy and pay for all the games and you’re paying too much money. That’s what this case is about.’ And all of a sudden, this case has turned into 25 hours of deposition and gobbledygook with an expert.”
Gutierrez concluded by acknowledging that, ultimately, it’s up to the jury.
“Those folks are the relevant folks if it gets to them,” Gutierrez said. “But I’m just sitting here struggling with the case because it didn’t play out as -- I really thought this was a simple case. . . . Once you control output, it should be an easy case -- I thought this was an easy case. Again, once you control output -- well, I feel bad for the Seattle Seahawk fan in Los Angeles, you know. So -- but -- and that’s what I thought the jurors would connect to right away. And 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.”
We apologize for the lengthy article. However, it’s important to understand the judge’s perspective. He didn’t know how the jury would react to the overly complicated trial and “gobbledygook.” We now know what the jury thought.
That surely will be a factor when the judge takes up the NFL’s motion to throw out the $4.7 billion verdict.
And here’s the reality. The contemporaneous reporting from June 18 painted a bleak picture for the plaintiffs, regardless of the verdict. The full transcript makes it much more of a toss-up, perhaps at worst, for the plaintiffs.
The judge saw the basic appeal of the plaintiffs’ case. It’s hard to imagine the verdict being tossed out on that ground. The real question is whether he’ll allow the massive damages verdict to stand.
But here’s the inescapable reality. With 11 years of a nationwide antitrust violation impacting millions of fans who paid too much for Sunday Ticket, shouldn’t the verdict be massive, if there’s a finding of an antitrust violation?
Of the various witnesses who testified during the Sunday Ticket trial, only one owner testified live in court.
On the eighth (and part of the ninth) day of the proceedings, June 17, Cowboys owner Jerry Jones took the stand.
He wasn’t the only owner who testified. Previously, deposition testimony from Patriots owner Robert Kraft was played for the jury. However, Kraft did not testify in court. (At one point during the Jones testimony, the NFL’s lawyer inadvertently called Jones “Mr. Kraft.”)
Jones wasn’t as loquacious as he has been in other settings. In explaining that his family owned and operated a grocery store, however, he offered a story that created an entertaining image of a young Jerry Jones.
“Momma was involved full-time, and Dad, too, and so we all worked,” Jones said. “And when I was about nine, I used to have Momma put a little bowtie on me and I would greet the customers at the door. And if she winked, then I knew the customer was one that I could push her basket around, if I helped her get her cans out of the shelf, she might give me a little tip.”
As to the much bigger business he purchased in 1989, Jones said he gives himself a salary of roughly $250,000 per year. He was asked if he has ever taken a profit from the team.
“I have not,” he said at page 1,562 of the transcript. “Any available cash or capital that is generated within the operation of the team, I have reinvested and put it back into the team and stadium and facilities and things like that. So I don’t want to imply that it hasn’t been positive, the use of the money. I just haven’t taken it out to go buy a suit or a shirt with.”
Jones defended the league’s history of revenue sharing, even if it keeps him from spending his way to Super Bowl wins. He said that, if the 32 teams were to sell out-of-market TV rights individually, he would no longer want to share revenue. (Of course, the teams already have agreed to share all TV revenue from any source, with a unanimous vote of the 32 owners required to override it.)
“The Cowboys, in my mind, if we’re sitting here dreaming, we could be a bigger deal,” Jones said of a league without shared revenues. “But we would have been equivalent of the big fish in a smaller pond. I had rather -- if you look at our fan base as a pond, I’d rather have a much bigger, much broader, much engaged fan base for the NFL and have to fight it out and be 25 years before I get to a Super Bowl. I’d rather the Cowboys compete in that kind of environment because it’s more exciting for our fans. And it not only works and has worked better than anybody could have ever imagined, it just is better for the fans.”
It also results in a league that makes more money for everyone, even though he made this statement at page 1,571, line 24 of the transcript: “I don’t know that I care that much about the money.”
He admitted that he relishes the fact that people dislike the Cowboys, because it makes the league more compelling to have a good villain.
“What is so important is that you are substantive, that you are interesting,” Jones said. “The facts are that probably well over half the fans of the NFL don’t like the Cowboys and want to kick our ‘you know what’ every time we get out there. And I say that in respect to everybody here. But that’s the way it is because they don’t like me, and they probably don’t like me to some degree if they pay that much attention to it. But it makes us interesting, that the -- it’s so much more than a score or so much more than a tackle. It is a manifestation of an interest, something to support. Yes, it’s my town against your town, but it’s even more than that. And we’ve been able to put that -- by taking it to free television all over this country, we’ve been able to take that and have it as an experience for more fans.”
And more money for the league. But he doesn’t care that much about the money.
Throughout the case, the league was careful to craft a message for the jury that it cares about the fans, the fans, the fans — and not the money, the money, the money. At page 1,574, Jones laid it on a little thick, even by his standards.
“But what it is, it adds just a little bit of a respite for people that really are getting their fannies kicked and really do have some worries,” Jones said. “I had a coach one time say, ‘Do you know the pressure it puts me under? Don’t vote for going for two after you score a touchdown. Don’t vote for that. That’s just added pressure to me as coach. Please don’t vote for that, Mr. Jones.’
“And I said pressure. I said those people sitting out in the stands and those millions that are watching on television, a lot of them have got to go to the bank or they go to work and they’ve to go in there and they don’t know -- they’re going in maybe to ask to have their note renewed or maybe for more, and they don’t know what it’s going to be like. That’s pressure in life. That’s pressure.
“What we should be is a respite away from that, and that’s why it’s so important that the most fans we can get, get to see that. If we’re anything for society, we’re a respite, a way from the real heroes that are educating people, that are creating jobs and out here making this show go.”
Jones’s testimony also included plenty of questions about a lawsuit he filed against the NFL in the 1990s, as he tried to secure the right to sell Cowboys merchandise on his own, away from the collective league structure.
His lawsuit accused the league of maintaining an “illegal cartel” that, if broken up, “will permit [the Cowboys] and other member clubs to engage in spirited competition with one another and with the NFL in the licensing of professional football marks.”
The message from the plaintiffs was clear. If it’s good enough for Jones to compete with the other franchises over merchandising, why not compete over out-of-market TV rights?
His lawsuit against the league also alleged that ""the equal sharing of profits does not, in fact, lead to competitive balance,” and that “the sharing of profits can create just the opposite effect, leaving poor-performing teams with no incentive to spend more on players or strive to improve.”
To prove that point, the lawsuit Jones filed against the league pointed out that the Buccaneers won fewer games than any team from 1980 to 1990 but had the highest profits of any team during that same period.
Profit. Money. That’s ultimately what it’s all about.
As the saying goes, whenever someone says it’s not about the money, it’s always about the money.
It’s fitting, then, that Jones actually said, “I don’t know that I care that much about the money.”
One thing is certain. He’ll be caring the money about it if/when he has to come up with $440 million, which will represent his share of the $14.1 antitrust liability the league is currently facing.
When I was a kid, I’d read the sports page every morning while munching through a bowl of Frosted Flakes before they got too damn soggy. From time to time, I’d look at the stuff in the rest of the newspaper.
And then I’d stop.
There was always something happening that had been happening for a while. The latest story on the subject presumed a basic level of understanding of the situation. If you didn’t have it, you were SOL.
For some of you who have returned to football after a summer of doing other stuff, you’re seeing items about the Sunday Ticket lawsuit. You might not understand what it’s all about. For that reason, here’s a summary of what the case is about, what has happened, what comes next, and how you can find out more about it.
The case dates back to 2015. It’s a combination of a class action brought by commercial establishments and a class action on behalf of more than 2.4 million residential customers of Sunday Ticket. The combined classes cover 2011 through 2022.
Anyone who purchased Sunday Ticket during that period should check out this website, and maybe bookmark it.
The claims are pretty simple. Since 1961, the NFL has had the ability to sell TV rights as a league to free, over-the-air networks, thanks to an antitrust exemption given to it by Congress. That exemption, as highlighted by testimony from former Commissioner Pete Rozelle to Congress at the time, was never intended to apply to “pay” TV.
When the NFL sold TV rights to cable networks for the first time in the late 1980s (a half-season of Sunday nights on ESPN), no one pushed the antitrust issue. When the NFL sold the out-of-market package to DirecTV in 1994, the potential antitrust violation was hiding in plain sight.
The harm, as alleged and proven in this case, came from the NFL setting a price for Sunday Ticket that nudged millions who would have bought it toward the games available on their local CBS and Fox affiliates. This allowed the NFL to find a sweet spot, where it could get billions from DirecTV (thanks to the fans who happily paid the inflated price) and billions from CBS and Fox (who reluctantly tolerated the lost ratings points from Sunday Ticket).
After nine years of litigation, which included the original district-court judge throwing the case out and an appeals court resurrecting it, the trial started in June. Even though the worst-case scenario for the NFL was flagged before the trial began as $21 billion, the coverage was sparse and lackluster. Niche outlets sporadically had articles. The AP would push a story from time to time that painted with a broad but incomplete brush. There was no one constantly in the courtroom, observing the trial and sending out daily items about how things were going.
We tried to sound the alarm that something big could be coming. Few listened. Those who did were inclined to dismiss the concerns, likely due to the fact that so few were saying, “Hey, the NFL could lose a lot of money here.”
Then came the verdict: $4.7 billion. If/when entered as an official judgment, it will triple automatically to $14.1 billion.
The NFL will continue to fight; there’s too much money at stake. Based on things the judge said during the trial, the NFL might have a chance to get the verdict thrown out. And if the verdict becomes an official judgment, the NFL will appeal the outcome as far as it can.
Given that the trial was covered so sloppily, we purchased the full, 2,506-page transcript earlier this month. I’ve been going through it, one day at a time.
If you’re interested in the coverage that should have been generated by someone/anyone during the case, here are the links to the first eight days of trial:
Day 2-3 (testimony from Steve Bornstein, former NFL Media chief).
Day 3 (testimony from plaintiff Robert Lipincott, a displaced Saints fan).
Day 4 (testimony from Fox executive Larry Jones).
Day 5-6 (testimony from Dr. Daniel Rascher on damages).
Day 6 (the judge vents frustrations with the plaintiffs’ lawyers).
Day 6 (testimony from Brian Rolapp, current NFL Media chief).
Day 7 (testimony from dueling expert witnesses on damages).
Day 8 (testimony from Roger Goodell).
I’ve still got nearly 1,000 pages left in the transcript. So there’s more to come.
And there’s more to come in court. On Wednesday, the judge will hear arguments on the NFL’s motion for judgment as a matter of law.
Eventually, the appeals will happen. Given that $14.1 billion is on the line, it will go all the way to the U.S. Supreme Court. Multiple additional years will transpire before it’s done.
Along the way, the question is whether the NFL will change the pricing structure of Sunday Ticket to avoid further liability. Or whether it will just get rid of Sunday Ticket altogether.
And whether and to what extent the owners will try to foist some of the $14.1 billion onto others. Starting with the players.
We’ll continue to cover the case, and summarize the transcript, at our dedicated page with all Sunday Ticket stories. For those who purchased Sunday Ticket from 2011 through 2022, a not-small check could eventually be coming. For those who want to keep buying it, there’s a chance it will become a lot easier and cheaper to get.
Win or lose, here’s the inescapable truth. The NFL exploited its most zealous fans to pay far more than they should have had to pay to watch out-of-market games. “Choice” came at a cost high enough to get most displaced fans to watch whichever games they could get in their local markets, which allowed the NFL to double dip in the billion-dollar buckets presented to them by DirectTV and CBS/Fox.
During more than 17 years in his job as Commissioner of the National Football League, Roger Goodell had never testified in court during a trial. That changed last month, when he was called by the league to testify in the Sunday Ticket class action.
His comments covered 113 pages of the 2,506-page transcript. And it was largely uneventful, mainly because: (1) he didn’t have as much personal knowledge about Sunday Tickets as other witnesses who were directly involved in the negotiation of the deals with DirecTV; and (2) everything he said meshed with the bulk of the testimony that came before him.
In a nutshell, the league insisted it didn’t set the price for Sunday Ticket. The league also conceded it was a premium product, one that was intended to complement the games available at no extra cost on CBS and Fox in all markets throughout the country.
“Sunday Ticket, that’s a supplemental package,” Goodell said. “It’s a complementary package. That’s not intended for every -- a fan. They get the fan -- the fans get the broad audience, and the games are selected by CBS and FOX on Sunday afternoon. Obviously, the Sunday Ticket has whatever games are not assigned to our network partners on Sunday afternoon in those two windows. We want to make sure that that doesn’t infringe or hurt the availability of us to reach that broader audience on Sunday afternoon on CBS or FOX. . . . [I]t can impact negatively on our broadcast networks, so broadcast networks are very concerned about the impact on them in reaching the broader audience.”
Along the way, Goodell also said (as noted by the limited coverage of the trial as it was happening) that NFL Network got out of the business of producing Thursday Night Football games on its own because it wasn’t good at it.
"[W]e weren’t putting as high quality a production and -- and feed to our fans,” Goodell said. “I felt that it was not -- it was below the standard the networks had set, which I think is a very high standard, but our job was to meet that standard, and I didn’t think we were meeting that standard.”
And that was pretty much it.
The jury’s verdict indicates that it regarded the NFL’s explanation as being rooted in semantics. No, they don’t set the price. Yes, they want the price to be high, in order to protect CBS and Fox.
That point was proven, over and over again. The antitrust violation comes from the fact that 32 independent businesses used the league office to orchestrate the distribution of Sunday Ticket as a high-priced, premium product. This allowed the 32 independent businesses to maximize the fee from DirecTV for Sunday Ticket, and to maximize the fees from CBS and Fox for games available via antennas or basic cable packages.
That’s the case. And to the extent anyone would blame Goodell for the outcome, the truth is that the system was established 12 years before he became the Commissioner. The owners knew or should have known that they were stepping into a potential antitrust minefield.
It should have been obvious from the get-go. And it’s frankly amazing that it took nearly 30 years for them to trigger a $14.1 billion bomb.
In the aftermath of last month’s $4.7 billion antitrust verdict against the NFL in the Sunday Ticket case (which, if it stands, will become $14.1 billion), the NFL said the liability won’t directly impact the salary cap. More recently, Ben Fischer of Sports Business Journal reported that several owners are considering foisting some of the financial responsibility onto the players.
Cowboys owner Jerry Jones, the only owner who testified live in court during the trial, said Saturday that the verdict will impact the team-by-team spending limit.
Via David Harris of the team’s official website, Jones said he expects “a lot of ramifications on cap” due to the class action.
“It has to be considered,” Jones said. “It doesn’t make me flare, but it’s a fact. I think I know better than anybody of what the cap will be four years from now.”
To the extent that the Sunday Ticket verdict will potentially impact the cap, the specific amount is impossible to know because the end result of the case could still be zero or close to it. And with the case destined to be taken all the way to the U.S. Supreme Court (after it goes to the U.S. Court of Appeals for the Ninth Circuit), it could take three or four years before the litigation has reached a final conclusion.
This reality permits Jones’s remarks to be interpreted in one very specific, narrow way. If he envisions “a lot of ramifications” to the cap and if he knows what it will be “four years from now,” Jones possibly expects the league to begin accounting for the amount due before it becomes official.
The union would have to agree, of course. As explained the other day, the NFL Players Association could advance various arguments against the Sunday Ticket outcome impacting the cap, since it’s for management not the players to turn TV rights into revenue.
The league’s hammer could come from telling the NFLPA that it will disband Sunday Ticket for a model that avoids antitrust issues — and that in turn impacts revenues in a negative way. The NFLPA could call management’s bluff, or it could play ball with the league’s effort to begin taking money from the shared revenues and squirreling it away for a rainy day that could end up being a monsoon.
That’s really the potential message lurking in Jones’s remarks. The NFL might have decided to begin planning for paying $14.1 billion not by telling the teams to start figuring out how to come up with $440 million each when the appeals are exhausted but by creating a global fund for paying it all off. Then, if the NFL wins the case, all of the money will flow back into the cap.
It would still be a mess in the interim. Slowing the growth of the cap considerably while more and more cash gets siphoned into the Sunday Ticket fund.
Again, the union would have to consent to this approach. The goal for the owners would be to persuade them to do it.
If nothing else, sharing the burden would incentivize the NFLPA to support the league’s position that Sunday Ticket didn’t violate the antitrust laws. The problem with expressly taking the league’s side comes from the possibility that the precedent created by the case could, in theory, generate principles and reasoning that would negatively impact the players, if/when there’s another reason to shut down the union and sue the league for antitrust violations committed against its labor force.
After the NFL suffered the biggest courtroom loss in the history of American sports, PFT asked the NFL whether the potential $14.1 billion loss would impact the salary cap.
Here was the question: “I have people asking me if this will affect [the] salary cap. My understanding is that the verdict won’t but potential changes to Sunday Ticket resulting from the verdict could. Is that accurate?”
Here was the answer, from a league spokesperson: “Right. Salary cap is based on revenue. It’s premature at this point to know if there will need to be changes.”
That might have changed.
Via Ben Fischer of Sports Business Journal, some owners wonder whether a portion of the verdict can be foisted onto the players.
The argument is simple. The NFL and the NFL Players Association roughly share all revenues on a 50-50 basis. The money from DirecTV for Sunday Ticket and from CBS and Fox for games televised on “free” TV went to the owners and to the players. If the league has to pay back money it has already received from the networks, why shouldn’t the players pay back some of the money they received, too?
The NFLPA was previously made aware of the possibility. It’s unclear whether the union is taking it seriously. I’ve scoured the current CBA for any language that would justify clawing back revenues already earned and distributed to the players, via the cap. I don’t see anything.
Given that the current CBA was negotiated in 2020, five years after the current antitrust litigation was filed, the league could have tried to sneak language into the deal that would support an effort to take back money from the union if the case went south.
Of course, the absence of contractual language doesn’t stop the owners from trying to make the players share in the responsibility for the league’s antitrust violation. On one hand, the players benefited from it. On the other hand, they’re not the ones who did it.
Why should the players be responsible for a business strategy gone wrong that they didn’t devise? Why should they have to suffer the brunt of a worst-case scenario that the owners created by rolling the dice, for 30 years, on the possibility that pricing Sunday Ticket in a way that drove fans to watch the games available in their local markets would blow up in their faces?
Maybe the players would have recognized the potential antitrust violation, and would have argued for a different approach. Maybe the players would have refused to allow the NFL to insist on Sunday Ticket being a “premium” offering that gouged the most avid fans if they had a voice in how the double-dipping was done.
Again, it doesn’t stop the owners from trying to spread the pain to anyone but themselves. They didn’t get that rich by being stupid. If every one of them is potentially going to have to come up with $440 million, they’re smart enough to try to find someone else to foot the bill.
