On the same day the U.S. Department of Justice drew headlines by criticizing the NCAA’s proposed settlement to resolve the House, Carter and Hubbard antitrust litigations, the DOJ also took aim at a federal judge siding with the NFL in the Sunday Ticket antitrust class action.
On Jan. 17—the last full workday federal agencies were under the authority of President Joe Biden—the DOJ filed an amicus brief urging the U.S. Court of Appeals for the Ninth Circuit to vacate U.S. District Judge Philip S. Gutierrez’s dismissal of claims that would compel the NFL to rework its broadcasting arrangements.
Last summer, a jury in Los Angeles held the NFL and its teams violated antitrust law by pooling broadcasts for out-of-town fans into one package, the Sunday Ticket. The jury accepted the plaintiffs’ theory that the Sunday Ticket, which costs consumers $479 via YouTube TV (with cheaper options for students, YouTube TV subscribers and other deals), has made fans pay more to watch their favorite team. As the plaintiffs see it, if teams individually sold broadcasting rights or pooled them in smaller, less expensive packages, fans would pay less.
The jury awarded $4.6 billion and $97 million to residential subscribers and commercial establishments, respectively. Given that antitrust damages are subject to trebling, the NFL faced the possibility of having to pay $14.1 billion.
But Gutierrez reasoned the jurors fumbled their analysis. He felt they were confused by expert testimony, misunderstood economic terms (such as misconstruing a discount as an overcharge) and improperly calculated damages. As part of granting the NFL judgment as a matter of law, Gutierrez concluded it was “impossible” for the jury to determine “on a class-wide basis” that fans would have paid less in the absence of alleged anticompetitive conduct. The plaintiffs appealed to the Ninth Circuit, which has accepted amicus briefs by the DOJ and other non-parties.
The DOJ “takes no position on Plaintiffs’ damages claims,” and instead attacks Gutierrez’s denial of injunctive relief claims. Those claims wouldn’t compel the NFL to pay for alleged “harms” but would force the league to reconfigure its broadcasting arrangements.. For example, the NFL might need to rework the Sunday Ticket so that consumers can buy smaller, cheaper packages (such as New England Patriots fans who live outside New England being able to pay less for a package that only has Patriots games or only AFC East games).
The DOJ insists that Gutierrez applied “an incorrect standard” in dismissing the injunctive relief claims. He allegedly failed to consider whether the plaintiffs could show “threatened loss,” which is a lower standard than the showing of an “actual injury” as required to prove damages. Gutierrez, the DOJ asserts, “conducted only the damage analysis” when concluding the plaintiffs failed to adequately quantify their injury.
The DOJ contends the trial record presented evidence consistent with a threatened loss and should have warranted an injunction.
For example, “an NFL internal document showed that at least 35 million avid fans, and even more casual fans, are underserved”’ and that the “biggest reason” for fans dropping the Sunday Ticket is the price is “too high.” The DOJ also points to evidence suggesting that distributing out-of-market games on cable, instead of the Sunday Ticket, could have doubled “the average distribution for NFL regular season games . . . from 39% to 77% of U.S. TV households.” Also cited is testimony indicating that CBS “preferred that Sunday Ticket have a limited number of subscribers” and that Fox “wanted the NFL to license Sunday Ticket for no less than $294 and ideally materially higher than $294.”
Further, the DOJ refers to evidence indicating when the NFL removed the Sunday Ticket from DirecTV, the league sought “a provider that would maintain Sunday Ticket’s high price” and references discussions with Apple to that effect. The league’s rejection of an ESPN bid for the Sunday Ticket is also underscored, since the bid contemplated price points for “team-by-team” products.
As the DOJ tells it, “the NFL’s illegal practices are continuing.” The agency insists that “millions of NFL fans across the nation will continue to face a choice–watch only limited local games or pay ‘premium’ prices for the Sunday Ticket bundle.”
While an amicus brief isn’t a filing by a party and is only accorded as much influence as a court prefers, a DOJ amicus brief tends to draw more attention and deference. The DOJ is inherently authoritative as the primary federal agency for the enforcement of laws.
Yet, as with the DOJ filing a statement of interest in the NCAA litigation on Jan. 17, the timing of the DOJ’s Sunday Ticket filing could diminish its sway on the Ninth Circuit. The court might question why the DOJ waited until the end of Biden’s term to weigh in and whether the DOJ under President Donald Trump holds the same viewpoints.
Only a week into his second term, Trump has already made major moves to restructure the DOJ. Those moves include a freezing of civil rights litigation, petitioning to stop environmental and student debt cases and reassigning and removing senior officials. In addition, Trump has frequently repudiated positions taken by Biden and his administration. These factors call into question whether the opinions expressed in a DOJ brief filed on Jan. 17 captures a viewpoint still shared by the DOJ as of Jan. 20.
Another potential check on the importance of the DOJ’s amicus brief is to ask an obvious question: If the DOJ believes the NFL is engaged in “illegal practices” that are “continuing,” why hasn’t the DOJ sued the NFL?
It’s not as if the DOJ has been afraid to take on the NFL and its broadcasting arrangements in the past. The agency brought successful antitrust litigation against the league in the 1950s and 1960s. The litigation that led the NFL to lobby for the Sports Broadcasting Act of 1961, a law that exempts professional football, basketball, baseball and hockey leagues from antitrust scrutiny when they negotiate a national TV contract with a network that provides “sponsored telecasting” (i.e,. free and over-the-air) of games. Filing an amicus brief, like filing a statement of interest in the NCAA litigation, is a far milder and less impactful way of addressing an alleged “illegal practice” than putting skin in the game.
As to the merits of the case, the NFL has maintained its broadcasting arrangements comply with antitrust law and, as evidenced by the unparalleled ratings of NFL broadcasts in the U.S., are popular with fans. The league has also warned there are potential drawbacks to any court-ordered changes to those arrangements. For example, the NFL might rethink its current setup for local fans. They can generally watch their favorite NFL team without having to subscribe to cable or a paid satellite service—a stark contrast for local fans of NBA, NHL and MLB teams who usually must pay to watch their teams’ games on TV.
