The NFL has rarely been a loser on the field, but a crushing defeat in an antitrust lawsuit could change the way the world’s richest sports league generates billions of dollars in revenue each year.
A Los Angeles jury on Thursday sided with fans who claimed the league conspired with DirecTV to raise subscription prices to watch games broadcast outside their team’s home market. The $4.7 billion in damages could be tripled under federal law.
This does not mean the game is over.
The judge will likely reduce the ruling or even dismiss it entirely and rule in favor of the NFL. But he didn’t. Look positively Over fans’ arguments during the trial, the case was dismissed back in 2019 before it turned into a class action lawsuit. Post-trial motions are scheduled for July 31.
“It’s a really serious problem, but there’s still a long way to go,” said Patrick Krakes, a media consultant and former Fox Sports executive who helped negotiate the network’s deals with the NFL. “In terms of the bigger picture and the NFL’s place in the media landscape and its value, that’s not going to stop them. They’re going to keep going.”
If the ruling stands, the NFL said it will appeal all the way to the Supreme Court, prolonging a case that dates back to 2015. The original suit was filed by the Mucky Duck bar in San Francisco, arguing that the NFL’s Sunday Ticket forced viewers to pay for out-of-market games even when their team wasn’t playing — and charged high prices for doing so. In other words, as a fan, you have to buy rights to every Sunday game, not just when your team is playing.
The jury took less than a day of deliberations to decide that it was unfair. The ruling is a shock to how sports are presented to consumers, and a major blow to the NFL, which has grown accustomed to getting the Midas touch. Although it will appeal, the league must plan for the potential costs of losing.
It’s hard to know how much money the NFL has. As a private company, it does not share its finances. In 2010, NFL Commissioner Roger Goodell set a revenue goal of $25 billion by 2027.
Right now, one way to estimate NFL revenue is about $12 billion, according to the annual statement from the Green Bay Packers, the only NFL team that publishes its finances. Each of the 32 teams gets the same amount from the NFL, and the Packers got $374.4 million in 2022, the latest figures available.
FIFA, soccer’s global body, is the only other sporting organization that competes with the NFL in terms of money, at least during a World Cup year. It made more than $6 billion from the 2022 World Cup in Qatar. It has about $4 billion in cash reserves.
If FIFA has that much money, it’s safe to assume that the NFL at least has the ability to come up with the money and pay the referee, but it will take time. And it will take the same amount of time for an appeal.
Power Converter
The next problem — assuming the ruling isn’t overturned — could be a shift in power between the NFL and its teams.
The NFL has kept its members happy by signing massive TV deals that make everyone rich. The NFL will make $110 billion from an 11-year TV deal signed in 2021.
The NFL has always been unique. In 1961, Congress passed the Sports Broadcasting Act, after a U.S. district court ruled that the NFL was violating antitrust rules by bundling rights in a deal with CBS.
The law allowed the NFL to pool all of the teams’ rights together to make the league economically viable. But the law focused on broadcast deals, while the Mucky Duck lawsuit focused on whether the NFL violated antitrust laws with its Sunday Ticket package offered by DirecTV, the satellite provider.
If the ruling is issued, teams could be given the opportunity to sell their local rights and out-of-market games via cable or even a streaming service. The temptation could be increased if the NFL tries to pass the cost of the fine on to each team — a potential hit that could range from $150 million to $450 million.
“Ultimately, it’s a free market, and the hope is that it creates more opportunities for people to watch an NFL product,” said Sarah Hartley, a lecturer in sports law at the University of Virginia School of Law and a partner at Brian Cave Layton. besner. But she also cautioned that the legal process is far from over.
Youtube
Starting in 2023, YouTube will replace DirecTV as the home of Sunday Ticket. YouTube pays the NFL $2 billion a year and charges customers a $349 fee. While the case did not involve YouTube, it’s hard to know whether the streaming platform would be better off if it gave more money to a team with a larger fan base and viewership. It’s also hard to know whether the team owner thinks he can get a better deal on his own.
Dallas Cowboys owner Jerry Jones admitted as much during the trial. “I’m convinced I’m going to make a lot more money than the Bengals,” he said on stage. This sparked some laughter.
Jones is arguably the architect behind the NFL’s funding from television revenue. In 1992, CBS and NBC were losing money broadcasting NFL games. The NFL’s broadcast committee wanted to give the networks millions of dollars in television revenue. DiscountsJones said no, and brought it New network I called Fox and the bidding war began.
When Jones fought back, he became a new owner after purchasing the Cowboys in 1989 for $140 million. Now it is worth billions. There are now new owners looking to make their own mark.