A $4.7 billion ruling against the NFL could change the dynamic between the league and the teams
The NFL rarely fails on the field, but a conviction in an antitrust case could change how the world’s richest sports league generates and distributes billions of dollars in annual revenue.
A Los Angeles judge on Thursday sided with fans who say the league conspired with DirecTV to raise the price of subscriptions to watch games broadcast in their team’s home market. The $4.7 billion in damages could be tripled under federal law.
That doesn’t mean the game is over.
A judge may reduce the verdict or throw it out entirely and rule in favor of the NFL. He didn’t take kindly to fan arguments during the trial, and dismissed the case in 2019 before it went to trial. Motions for a post-trial hearing are scheduled for July 31.
“It’s a really big problem, but there’s still a long way to go,” said Patrick Crakes, a media consultant and former Fox Sports executive who helped negotiate the network’s deals with the NFL. “In terms of the big picture and the place of the NFL in the media environment and their numbers, it’s not going to stop them. They will keep going.”
If the decision stands, the NFL said it will appeal all the way to the Supreme Court, extending a case that began in 2015. The Mucky Duck Bar in San Francisco filed the first lawsuit, arguing that the NFL’s Sunday Ticket forced viewers to pay. on out-of-market games even if their team doesn’t play – and charge high prices for them. In other words, as a fan you have to buy the rights to every game on Sunday, not just when your team is playing.
The judge took less than a day of deliberations to decide that was wrong. The decision is a shock to the way sports are offered to consumers, and a major contribution to the NFL, which tends to have the Midas touch. Although it will appeal, the league must plan for the costs that may be lost.
It’s hard to know how much money the NFL has. As a private company, it does not share its funds. Back in 2010, NFL Commissioner Roger Goodell set a goal of $25 billion in revenue by 2027.
Currently, one way to estimate the NFL’s revenue is about $12 billion, according to the annual statement of the Green Bay Packers, the only NFL team that publishes its finances. Each of the 32 teams receives the same amount in the NFL, with the Packers receiving $374.4 million in 2022, the latest figures available.
FIFA, soccer’s world governing body, is the only other sports organization that competes with the NFL financially, at least during the World Cup year. It made more than 6 billion dollars for the Qatar World Cup in 2022. It has a net worth of about four billion dollars.
If FIFA has that much money, you’d think the NFL would at least have the ability to save and pay the verdict, but it’s going to take time. So is the appeal.
Power change
The next issue – assuming the decision is not overturned – would be the shift in power between the NFL and its teams.
The NFL kept its members happy by signing huge TV deals that made everyone rich. The NFL will receive $110 billion from its 11-year television deal that runs through 2021.
The NFL has always been special. In 1961, congress passed the Sports Broadcasting Act, after a US district court ruled that the NFL violated antitrust laws by pooling the rights in a deal with CBS.
The law allowed the NFL to pool all of the teams’ rights together to make the league more economically viable. But Law focused on broadcast deals, while the Mucky Duck case focused on whether the NFL violated antitrust laws with a Sunday Ticket package offered by DirecTV, a satellite provider.
If the decision is upheld, teams would be given the opportunity to sell their property rights and out-of-market games to a cable or streaming service. The temptation could be intensified if the NFL tried to pass on the cost of the fine to each team – a hit that could be anywhere from $150 million to $450 million.
“Ultimately, it’s a free market, and the hope is that it will create more opportunities for people to watch the NFL product,” said Sarah Hartley, a sports law professor at the University of Virginia School of Law and a partner at Bryan Cave Leighton. Paisner. But he also warned that the legal process is far from over.
YouTube
As of 2023, YouTube has replaced DirecTV as the home of Sunday Ticket. It pays the NFL $2 billion a year and charges customers $349. Although the case did not include YouTube, it is difficult to say whether the streaming platform will be better at giving more money to the group with more followers, and viewers. It’s also hard to know if the club owner thinks he can make a better deal on his own.
Dallas Cowboys owner Jerry Jones admitted as much during the trial. “I’m sure I’ll make more money than the Bengals,” he said on the stand. It was laughed at.
Jones is arguably the creator of the NFL funded by TV revenue. Back in 1992, CBS and NBC actually lost money on NFL broadcasts. The NFL’s broadcast committee wanted to give the networks millions in rebates. Jones said no, brought in a new network called Fox, and started a bidding war.
While Jones was fighting the discount, he was the new owner after buying the Cowboys in 1989 for $140 million. Now it is worth billions. Now there are new owners who want to make their mark.
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