NFL accused of scheming over 'Sunday Ticket' pricing on first day of antitrust trial

A multibillion-dollar antitrust class action against the National Football League over the legality of its "Sunday Ticket" broadcast package opened Thursday to a jury in a courtroom so full it spilled into overflow seating.

A plaintiff class that includes millions of commercial and residential subscribers between 2011 and 2023 accused the league of violating antitrust law by conspiring with television networks and DirecTV - the exclusive distributor of "Sunday Ticket" at the time - to unlawfully force fans to purchase the package by limiting out-of-market football games to a paid subscription service at artificially high prices. In re: National Football League's Sunday Ticket Antitrust Litigation, 2:15-ml-02668 (C.D. Cal., filed Dec. 10, 2015).

The NFL's counsel argued its agreements for the package broadens watching options and doesn't reflect supracompetitive pricing because of the "premium service" the package gives subscribers and the fact that several other lower-priced broadcasting packages the league offers such as "NFL RedZone" and a handful of select out-of-market teams that are chosen to air locally for free on networks such as CBS and FOX.

The league also argued the NFL was not in control of the pricing at the time and it was DirecTV's doing. DirecTV, which was named as a defendant in the case, denied any wrongdoing and in 2021 successfully moved to have the claims arbitrated.

During opening statements before U.S. District Judge Philip S. Gutierrez, Susman Godfrey LLP partner Amanda K. Bonn for the plaintiffs told jurors the NFL's sole focus for "Sunday Ticket" was not to offer a premium product, but instead a premium priced product at the expense of its fans.

"We have a trail of documents that tell the truth of what happened," Bonn said. "They did this for one reason and one reason only: greed, money and profit over people."

Bonn shared with the jury glimpses of several emails and memos between the NFL and networks in the early 2000s. This was the time when DirecTV renewed its "Sunday Ticket" deal with the league, and the league was in the midst of renewing television contracts with networks including CBS, Bonn said.

In one email, the head of CBS Sports at the time, Sean McManus, was discussed what Bonn described as "secret backroom deals" in an effort to inflate the price of "Sunday Ticket." McManus purportedly told an NFL executive: "We will need clarification on the premium pricing for 'NFL Sunday Ticket' and any other such packages. The concept here has always been that these packages are sold at a premium, thereby limiting distribution."

Bonn then rhetorically asked jurors, "What business is it of CBS to send the NFL as their go-between and say, 'We want you to make sure that DirecTV keeps their price high?' That is not how a free market with competition that abides by the antitrust laws operates. This is how an illegal anticompetitive scheme works."

Bonn also overviewed negations the NFL and DirecTV had about which party would control the pricing of "Sunday Ticket". While DirecTV wanted to offer promotions and discounted rates, the league supposedly restricted the notion during several meetings, according to early 2000s memos from the NFL that were briefly shown to the jurors.

One memo, according to Bonn, showed the league saying in 2001, "... at a minimum, the NFL must ensure that it maintains complete control over pricing and packaging of 'Sunday Ticket' and any future program offerings."

In another memo that was shown, the word "antitrust" could be seen hand-written on the side of the document, supposedly by someone who was at one of these price control meetings. "Someone in that very meeting wrote 'antitrust' on this document that we have one copy of, scanned from a secret hard copy file that [the NFL] never thought would see the light of day," Bonn said. "They know that controlling the price DirecTV charges is price fixing. ... You will see over time that [the NFL] found more and more clever ways to balance two things: They wanted to control the price and they wanted to keep this scheme going to keep going. They know it's an antitrust violation and that someday, this very day, this very moment would come."

However, Wilkinson Stekloff LLP partner Beth A. Wilkinson for the NFL told jurors the league was not keeping any secrets about how the league licensed its premium service. "None of these documents reveal something that isn't known about how this system is broadcast," she said.

Wilkinson reminded jurors that anything outside the class window regarding business about how the "Sunday Ticket" service was conducted should not be a focal point. "The class is asking for $7 billion for the time period of 2011 to 2022, maybe the very beginning of '23. That's what this case is about. That's what the evidence should be about. And in 2011, the NFL didn't control the price."

The NFL's "Sunday Ticket," created in 1994, is the only package the league offers that allows fans weekly broadcast access to all 32 teams throughout the season. Depending on the tier, the average subscriber pays, in total, a retail price between $300 and $450 annually for the service - which is now exclusively streaming on YouTube TV after the Google-owned company took over the service's rights in 2022.

However, Wilkinson said that after accounting for free trials and discounts, residential subscribers in 2020, for example, were only paying an average of $102.70.

Even for the subscribers who were paying the full retail price, subscribers, on average, were only paying around $2 to $3 per game each season and compared it to the median prices of an AMC Theatres movie ticket, $19, and a UFC pay-per-view event, $70, Wilkinson said.

Despite the plaintiffs' contention that "Sunday Ticket" was a system that went against fans' best interest and hurt them financially, Wilkinson argued the exact opposite.

"What the NFL does is focus on its fans. ... What this case is really about is the choice provided to the fans, the choices that CBS and FOX make, the choices the NFL makes, the balance to provide as much to fans as they can, and then additional complimentary, supplemental services for those avid fans," she said.

If the jury finds the NFL's broadcasting agreements violated the Sherman Act, it could cost the league $7 billion in damages - which could triple to $21 billion pursuant to treble damages under the federal antitrust statute. It could also alter how television licensing rights are negotiated between sports teams and various networks.