Economist: NFL could offer out-of-market games at no extra cost

The National Football League could feasibly offer fans more out-of-market games without additional charges by licensing broadcasting rights individually or by division, testified a sports economy expert on Tuesday.

Daniel Rascher, a professor at the University of San Francisco and president of SportsEconomics, proposed a model similar to the NCAA’s, where football games are licensed to various networks like CBS and FOX through deals with power conferences such as the Big Ten and Pac-12. For instance, NBC has held exclusive rights to Notre Dame’s home games since 1991.

“The key here is that the conferences compete with each other to sell their media rights,” Rascher told jurors. “In a competitive situation, they’re going to innovate to grow their customer base, or even keep their customer base. A monopoly doesn’t have the same incentive.”

In an antitrust class action that could cost the NFL up to $21 billion in damages and change how TV rights are negotiated, the league is accused of conspiring with television networks to force fans to purchase the “Sunday Ticket” package for out-of-market games at high prices. The plaintiff class includes millions of subscribers from 2011 to 2023. In re: National Football League’s Sunday Ticket Antitrust Litigation, 2:15-ml-02668.

NFL’s counsel at Wilkinson Stekloff LLP argued that the “Sunday Ticket” package provides a premium service with access to additional games beyond what is available through lower-priced packages.

Under examination by Kalpana Srinivasan, a partner at Susman Godfrey LLP representing the plaintiffs, Rascher compared the NCAA’s model to the NFL’s. He found that more games on a network’s channels — such as Disney’s ABC, FX, and ESPN — could increase viewership of out-of-market matchups from around 30% to 70%.

Despite the NFL’s claim that more games would deplete local market viewership, Rascher said, “It’s illogical in the sense that you have more choices, you’re going to increase total viewership.”

Rascher’s 2016 analysis showed that Big Ten teams, including Ohio State and Michigan, had 61% viewership, while the New England Patriots had only 39%. Before expanding its media rights to FOX, the Big Ten was aired on ESPN.

“More than half of the Big Ten teams were getting more distribution and more choice for those households than even the Super Bowl champion Patriots,” Rascher said.

Rascher suggested a model listing over-the-air, out-of-market matchups on specific networks by geographical location could have given fans more access to games, increasing NFL viewership. For example, Disney’s ABC could air local games like the Rams in Los Angeles, while ESPN channels could air other out-of-market games.

“This college football model shows it’s feasible and would allow games to be shown broadly to more people, not just restricted to FOX and CBS,” Rascher said.

When cross-examined by NFL’s counsel, Brian L. Stekloff, it was mentioned that the NFL works with various networks to determine which out-of-market games would be most suitable for local fans, like FOX’s “Game of the Week.” This is unlike other leagues, such as MLB and NHL, which have deals with specific cable networks leading to local blackouts.

Rascher also revealed that when the “Sunday Ticket” rights were about to expire with DirecTV, Disney offered to acquire and sell it to subscribers for $75, a significant discount from DirecTV’s $290 average. Disney also proposed team-specific broadcast packages. However, the deal fell through as NFL executives were unhappy with the “low” price and concerned about local viewership impacts.

The trial, now in its sixth day, is being presided over by U.S. District Judge Philip S. Gutierrez.