A jury in Los Angeles federal court ruled for the National Football League to pay approximately $4.7 billion in damages in a class action lawsuit filed on behalf of over 2.4 million residential subscribers and more than 48,000 commercial establishments utilizing NFL Sunday Ticket. The decision alleges that the league violated antitrust law through the out-of-market product and that the league colluded with DirecTV, the former primary home of the service, along with CBS and FOX to raise subscription prices to watch these games. Being that the case pertains to federal antitrust law, the damages would be tripled and equate to more than $14 billion.
The NFL has stated that it will appeal the decision and disagrees with its premise, filing a motion two weeks ago with the court. Within the docket, the league criticized U.S. District Judge Philip Gutierrez and how certain aspects of the case were handled. Moreover, the league stated that jurors determined damages within the litigation through a “made-up methodology,” and also claimed that plaintiffs did not prove wrongdoing due to the rejection of damages calculations presented by witnesses.
“Well we obviously disagree with the jury verdict, and we are committed, obviously, to following the legal process,” Roger Goodell, commissioner of the National Football League, said in an interview with Squawk on the Street on CNBC. “It’s a long process – we’re aware of that – but we feel very strongly about our position, our policies particularly on media that we make our sport available to the broadest possible audience. Sunday Ticket is just a complimentary product, so we’re committed to following the litigation all the way and making sure that we get this right.”
Plaintiffs in the case filed a motion this week urging Gutierrez to retain the verdict and deny the league’s motion for a new trial. Citing precedent from the Ninth Circuit, the motion states that if the jury award is within the range supported by evidence, it generally goes untouched by the courts. Additionally, the plaintiffs rejected the assertions that jury instructions from Gutierrez lowered the threshold for a judgment against the league, along with the bias of a jury foreperson since a family member is an NFL Sunday Ticket subscriber.
“Far from ‘irrational,’ the jury’s award was within the range of proof, which is all the law requires,” the motion reads. “The jury heard a proper model, the history of college football telecasts, as a real-world yardstick from which it could have concluded class members would not have paid anything above the price of a regular DirecTV subscription but for the restraints, yielding $7 billion in damages over a 12-year class period.”
While plaintiffs do not know how or why the jury arrived at the reduced damages award, the group conveyed that “pure conjecture into the jurors’ mental processes is legally impermissible. The motion outlines different aspects of the case, including the failure to establish “single entity” defense since the jury reasonably concluded that NFL teams could produce and license telecasts independently. Plaintiffs also articulate that the jury could have awarded up to $7 billion in damages, an estimate that equates to the amount of all actual payments for NFL Sunday Ticket by class members during the class period.
“Defendants argue the jury’s verdict should be overturned in its entirety by picking apart the precise calculations the jury may have used to estimate damages, ascribing motives they claim are ‘irrational,’ and claiming, based on unfounded assumptions, the amount of the damages negates liability,” the motion reads. “Defendants flip on their head nearly 100 years of the Supreme Court’s Sherman Act jurisprudence, decades of Ninth Circuit law on damages, and the jury’s findings.”
Gutierrez will consider both arguments at a hearing on July 31 and is expected to issue a ruling in the weeks following the court date. If the verdict is upheld, the NFL will look to stay enforcement pending appeals, something that could force the league to post an appeals bond in the amount of such remuneration. The motion issued by the plaintiffs mentions that the Sherman Antitrust Act was enacted to prohibit restraints of trade through restrictions on price and output and classifies NFL Sunday Ticket in that strata.
“In arguing the Court should second-guess the jury’s reasonable estimate of damages and thereby unwind liability altogether, Defendants’ motion runs afoul of nearly 100 years of Sherman Act decisions based on this bedrock principle: Those who violate the antitrust laws and thereby prevent a competitive market from existing may not escape accountability by complaining that damages cannot be measured with precision,” the motion concludes. “Granting the motion would be a ‘certainty of injustice.’ The motion should be denied.”
