The NFL was recently challenged in a Los Angeles, CA. Federal courtroom by a San Francisco sports bar ( The Mucky Duck), which blossomed into a class action lawsuit involving millions of other people and commercial entities. The cornerstone of the lawsuit was the NFL Sunday Ticket package.
A long-standing television package. The Sunday Ticket package was a paid subscription that augmented local games carried by traditional network's such as CBS, FOX, NBC, ABC, etc. The average fan could watch the local game on TV for free. According to the NFL, the package was crafted to allow viewing of non-local games. However, to view the out-of-market games, the customer had to purchase all the games at one time. In other words, the Sunday
Ticket included all sports games that were not local. According to the NFL this gave the NFL audience the opportunity to view all the games on any given weekend. To include favorite teams and non favorite teams. The plaintiffs in this case, who are sports bars and singles subscriber customers, argued that the collectivization violated the Sherman Antitrust Act, which prevents competing entities from conspiring to fix prices. The Plaintiffs argued that the individual teams are single entities competing against one another on the field of play and business. They claim the NFL by marketing the Sunday Ticket package collectively as a whole charged over-inflated prices, because of lack of competition. They claim the NFL should have offered single packages in which the subscriber could follow only one team for a lesser price. The current subscription includes all the teams or nothing. The NFL claims they operate as a joint venture. That is, individual teams pooling resources together to form a whole or league. Football is a team concept sport. A football team is a joint venture of natural persons, and football teams join together to form a league. The jury sided with the plaintiffs and awarded the plaintiffs, single subscriber customers 4.7 billion dollars, and 98 million to commercial entities, which could balloon to triple that amount, because it deals with Antitrust. The NFL will appeal to a higher court. The dust has not settled.
The 4.7 billion jury award which could blossom to nearly 14 billion and could be a substantial penalty to the NFL’s financial bottom line. According to Sportico
Sports teams make revenue in 5 basic ways.National Revenue (television contracts), Seating, Team Sponsorship, Local Media, Concessions/Parking/Other. The NFL more than any other professional sports league relies heavily on televised game broadcast. According to sportico 66% of NFL revenue comes from televised broadcasting. Only 17% of revenue is generated from in person seating. According to Sportico each NFL team received 400 million from broadcast equally and 20 million from seating. The teams pool 34 percent of their gate receipts and spread that out equally among all the teams.
CBS and FOX pay about 2.1 billion per season each for local game coverage. While youtube pays two billion per season for the Sunday Ticket package. . Direct-TV had the package from 1994 until 2022. In 2023 youtube had their first season of the Sunday Ticket package broadcast. Youtube signed a 7 year contract with the NFL. It is unlikely any of the reward money will be disbursed in the short term, because the league will appeal to the supreme court of necessary. Thus, the case will be in litigation for many years.
HOW SPORTS TEAMS, LEAGUES AND OWNERS MAKE MONEY
By Kurt Badenhausen
Sports Valuations Reporter
FEBRUARY 16, 2024
Sportico
Jury begins deliberations in class-action lawsuit against NFL by 'Sunday Ticket' subscribers
By JOE REEDY AP sports writer
June 26, 2024
ABC News
Jury rules NFL violated antitrust laws in 'Sunday Ticket' case