Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Restaurant alleges DirecTV ‘NFL Sunday Ticket’ agreement restrains competition, (Feb 16, 2016)

By Linda O’Brien, J.D., LL.M.

The National Football League and its individual teams have conspired with satellite television service provider DirecTV to restrain competition for the broadcast of live regular season football games by entering into an exclusive license agreement under which DirecTV is the sole distributor of the game broadcasts through its satellite service, according to a complaint filed in the federal district court in Los Angeles (Sir Waldon Inc. v. National Football League, Inc., February 12, 2016).

The National Football League (NFL) is an association of thirty-two major league professional football teams. Although the teams are independently owned and managed, they have agreed to pool their individual television rights and give the NFL authority to negotiate with national broadcasters for the broadcast of each team’s games outside their home markets.

DirecTV provides direct broadcast satellite television service throughout the United States and distributes an exclusive “out-of-market” sports content programming package known as “NFL Sunday Ticket.” Sir Waldon Inc. operates an Oggi’s Pizza & Brewing restaurant and purchased a commercial subscription to NFL Sunday Ticket from DirecTV.

The complaint states that, in 1994, DirecTV entered into an exclusive agreement with the NFL to offer subscribers access to Sunday afternoon games that were not otherwise available in their market on national broadcast networks. DirecTV offers NFL Sunday Ticket, a premium subscription package that provides access to all Sunday afternoon broadcast on national networks. Due to the exclusive agreement, any person seeking access to these out-of-market games must subscribe to DirecTV and purchase NFL Sunday Ticket at the supracompetitive price dictated by DirecTV.

As a result of DirecTV’s exclusive agreement with the NFL, subscribers to NFL Sunday Ticket pay a higher price for the package than they otherwise would have in the absence of the defendants’ anticompetitive conduct. DirecTV advertises to bars and restaurants that NFL Sunday Ticket is valuable for attracting customers. DirecTV’s monopoly power and the defendants’ collusive conduct has enabled DirecTV to charge supracompetitive prices to bars and restaurants each season, knowing that commercial subscribers must show the NFL’s out-of-market games to successfully run their businesses, the complaint alleges.

The complaint also alleges that the defendants’ conspiracy has restrained horizontal competition among the NFL teams that would otherwise compete with each other for the distribution of their football games. Competition by the individual teams and other potential distributors would produce consumer benefits, including the increased availability of live broadcasts of NFL Sunday afternoon out-of-market games and reduced prices.

Sir Waldon asserts claims for restraint of trade, monopolization, and conspiracy to monopolize in violation of Sections 1 and 2 of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 2:16-cv-01025.

Attorneys: Daniel J. Mogin, Jodie M. Williams, and Jin Young Choi (The Mogin Law Firm, P.C.) and David W. Kesselman, Amy T. Brantly, and Trevor V. Stockinger (Kesselman Brantly Stockinger LLP) for Sir Waldon Inc.

Companies: National Football League, Inc.; NFL Enterprises LLC; DirecTV, LLC; DirecTV Holdings, LLC; DirecTV Group Holdings, LLC

News: Antitrust CaliforniaNews