Bars and restaurants across America could be lining up to take a chuck out of the $12 billion deal the NFL has with DirecTV – in more ways than one. In a proposed class action filed Monday on behalf of San Fran pub The Mucky Duck, attorneys at Hausfeld LLP and Glancy Pongray & Murray LLP want to free such establishments from what they see as the exorbitant prices they are currently paying to the league to show out of market games via the satellite provider’s Sunday Ticket package. They also are challenging the very nature of the exclusive deal the NFL and DirecTV have, which was last re-upped in October 2014.
In what is the latest of several actions by fans and others over such restrictions and costs, the Mucky Duck and potential other class members are saying the National Football League and DirecTV are violating the Sherman Act and need to be benched, so to speak, with an injunction and by paying out damages for the premiums it charges.
“DirecTV’s arrangement with the NFL allows the Defendants to restrict the output of, and raise the prices for, the live broadcast of NFL Sunday afternoon out of market games,” says the complaint filed in federal court in California on Monday (read it here). “Every NFL member team owns the initial rights to the broadcast of that team’s games. However, the teams have chosen to collude with each other, and to grant the NFL the exclusive right to market those games outside each team’s home market. But for the NFL teams’ agreement in which DirecTV has joined, teams would compete against each other in the market for NFL football programming, which would likely induce more competitive pricing.”
The lawsuit says that a bar with room for 51 – 100 occupants paid $2,314 this year to show Sunday Ticket games. Vegas hotels and bigger venues fork out over $120,000 for the ability to have the games on their screens.
And the bar and its lawyers think that the overall deal the league and the sat. provider have is part of the problem. “Of the 4 major professional sports in this country—baseball, basketball, hockey, and football—the only one with an exclusive out of market broadcasting arrangement is the NFL/DirecTV Sunday Ticket,” notes the complaint. “In contrast to the NFL’s exclusive deal with DirecTV, the NBA, the NHL, and MLB offer their live out-of-market game packages through both DirecTV and cable sports networks, including, for example, various sports networks owned by Comcast.”
Defendants and their co-conspirators’ exclusive agreement has a clear negative impact on competition, and serves no pro-competitive purpose. There is no evidence that this agreement was created to assure the quality of Sunday Ticket or to allow the NFL sufficient oversight, or any other permissible objective. Instead, DirecTV and the NFL entered into the agreement with the intent of maintaining a monopoly price for Sunday Ticket. And, because all the NFL teams have colluded to offer the package, they have also prevented individual competition by teams selling their own games to broadcasters.”
In short – hand over the ball.