LOS ANGELES — A federal judge on Thursday sided with the NFL, overturning a jury’s $4.7 billion award in a class-action lawsuit brought against the NFL by “Sunday Ticket” subscribers.
U.S. District Judge Philip Gutierrez ruled that the testimony of two witnesses for the subscribers was methodologically flawed and should be excluded.
“Without the testimony of Dr. Daniel Rascher and Dr. John Zona, no reasonable jury could have found any injury or damage to the class as a whole,” Gutierrez wrote at the end of his 16-page ruling.
On June 27, a jury awarded $4.7 billion in damages to residential and commercial subscribers after finding that the NFL violated antitrust laws by distributing out-of-area Sunday afternoon games through a premium subscription service.
The lawsuit targets 2.4 million U.S. household subscribers and 48,000 businesses who paid for packages to watch out-of-area games on DirecTV from the 2011 through 2022 seasons.
“We appreciate today’s ruling in the Sunday Ticket class action lawsuit,” the NFL said in a statement. “We believe the NFL’s media distribution model provides fans with a variety of options to watch their favorite games, including local broadcasts of every game on free over-the-air television. We thank Judge Gutierrez for his time and attention to this case, and we look forward to an exciting 2024 NFL season.”
I called and emailed the attorney representing the “Sunday Ticket” subscribers, but received no response.
The jury of five men and three women found that the NFL must pay $4,610,331,671.74 in damages to residential subscribers and $96,928,272.90 in damages to commercial subscribers.
Under federal antitrust laws, damages can be tripled, so the NFL was liable for $14,121,779,833.92 in damages.
Gutierrez wrote in his ruling that if he did not reach a legal judgment against the NFL, he would have vacated the jury’s damages award and granted a conditional retrial “based on the jury’s unreasonable damages award.”
Rasher’s model was a variation of the college football model. “What we figured out in college sports, we’ll certainly figure out in the NFL,” Rasher, an economist at the University of San Francisco, said in a deposition.
Gutierrez said Rasher’s testimony “was not the product of sound economic methodology” and that he should have explained that out-of-town television stations are available on cable and satellite without additional subscriptions.
Gutierrez also found Zona’s “multi-distributor” model to be flawed because it assumed that consumers would pay more if another service besides DirecTV offered “Sunday Ticket,” and it made the unfounded assumption that other distributors would be available, whether cable, satellite or streaming.
“Without knowing what ‘direct to consumer’ means, we cannot determine whether it would have been economically rational for a consumer to purchase ‘Sunday Ticket’ from an alternative distributor at a higher price,” Gutierrez said. “And that definition was necessary to determine whether a viable alternative distributor existed during the litigation period. Without that information, the court cannot determine whether a non-exclusivity-but-but-world has been reliably modeled.”
The jury’s award did not match either Rasher’s model ($7.01 billion) or Jonah’s model ($3.48 billion), which was an expert witness in the case.
Instead, the jury used the 2021 price tag of $293.96 and subtracted $102.74 from the average price paid by a residential “Sunday Ticket” subscriber. The jury then used what it deemed an “excessive rate” of $191.26 and multiplied that by the number of subscribers to arrive at the damages amount.
Gutierrez said the jury failed to follow his instructions and “instead ‘overcharged’ itself by relying on input that was not relevant to the record.”
This isn’t the first time the NFL has faced legal action over this issue, which has been ongoing since 2015.
In 2017, U.S. District Judge Beverly Reid O’Connell dismissed the lawsuit and ruled in favor of the NFL. She said “Sunday Ticket” did not reduce coverage of NFL games and that even if DirecTV charged an inflated price, it “did not in itself harm competition” because DirecTV had to negotiate with the NFL to sell the package.
Two years later, the 9th Circuit Court of Appeals reinstated the case.
The plaintiffs will likely appeal again to the 9th Circuit.
