NFL Sunday Ticket Verdict Shines Light on MLB, NHL Approach

The NFL losing the trial for the Sunday Ticket class action is not only about losing.

It’s also about the decision to go to trial.

Nine years ago, MLB and the NHL faced the same choice. In Garber v. MLB and Laumann v. NHL, consumers accused the two leagues of violating antitrust law by blacking out games to exploit TV and streaming deals. Like the NFL has faced with the Sunday Ticket litigation, MLB and the NHL defended how their teams, which are competing businesses, conspired to limit access to broadcasts.

With MLB, some fans living outside of regional sports networks’ territories faced the pricey choice of buying MLB Extra Innings or MLB.TV to watch their favorite team. That arrangement meant fans had to buy access to other teams’ games they didn’t want to watch. Fans living in-market were also impacted. If they didn’t subscribe to their team’s RSN, they couldn’t—due to territorial exclusivity—access the RSN of another team. Instead, they had to buy out-of- market packages to watch their team.

Also like the NFL, MLB and NHL couldn’t persuade the presiding judge to dismiss the case before trial. U.S. District Judge Shira Scheindlin denied MLB and NHL motions to dismiss claims for injunctive relief—that is, forcing MLB and the NHL to change their broadcast deals—though she ruled the plaintiffs couldn’t pursue monetary damages through class actions. 

Scheindlin, who in 2004 ruled for Maurice Clarett in his lawsuit against the NFL and its eligibility rule, reasoned that MLB’s antitrust exemption didn’t cover territorial broadcast restrictions and that only a trial could determine if there was an illegal conspiracy to raise prices. As to the NHL, testimony from league officials showed how regional sports networks benefited from market exclusivity where no other NHL teams’ broadcasts could enter a market. “The potential for higher revenues stemming from collective action,” Scheindlin bluntly surmised, “constitutes a strong motive to collude.”

Instead of rolling the dice with trial and appellate courts, MLB and the NHL settled the class actions. MLB gave what many fans wanted: A cheaper option to only buy one team’s broadcasts. MLB.TV would thereafter offer single-team packages as well as discounts for the full package. The NHL’s settlement terms were similar. The league extended discounted single-team packages in addition to more costly bundled packages. 

In reality, though, MLB and the NHL really “won.” They avoided the unwanted prospect of a court holding their blackout policies were illegal under antitrust law and/or ordering them to reconstitute broadcasting arrangements. 

Since the Garber and Laumann settlements in the mid 2010s, much has changed in the RSN world. Cord-cutting, which includes canceling cable packages that include RSNs, has emerged as a major threat to cable and satellite providers. Many Americans now buy streaming apps a la carte in lieu of cable or satellite. Industry experts predict that by the end of 2025, 75% of households with a TV won’t have a traditional TV subscription. 

The RSN model is at the heart of the Diamond Sports Group (Bally Sports) bankruptcy proceedings, with Diamond insisting that deals reached a decade ago to broadcast MLB, NBA and NHL teams are now overpriced due to cord-cutting. In a recent court filing, Diamond expressed that cord-cutting has led to a 35% drop in its customer base since 2019.

NFL broadcasting deals aren’t tied to RSNs. Instead, NFL teams provide local fans the chance to watch games on TV for free while out-of-town fans need to buy the Sunday Ticket, which includes access to all teams’ games even if fans of one team don’t want to pay for the chance to watch other games. The NFL thought a jury in Los Angeles would see the wisdom of a framework that makes games free to local fans—a sharp contrast to local fans of MLB, NBA and NHL teams as they must pay to watch. That decision obviously backfired when the jury held against the NFL and imposed about $4.7 billion in damages.

To be clear, the game isn’t over. The NFL’s legal strategy—fight—might ultimately prove correct. The league will have several opportunities to convince judges to reverse or mollify the verdict and preserve a broadcasting arrangement where the 32 teams pool their broadcasting rights through the Sunday Ticket. The NFL might also cut a deal with the plaintiffs’ attorneys that softens the verdict, such as by agreeing to cheaper conference- or division-wide bundled packages in addition to the more expensive league-wide package. 

But for now, the NFL is losing. If the legal system’s version of “instant replay” doesn’t reverse the call, the NFL could be forced to radically change broadcasting arrangements, which last year accounted for 93 of the year’s 100 most-watched TV broadcasts in the U.S. 

While the NFL is unquestionably the number one sports league in America, its lesser peers seem to have made a shrewder strategy to settle TV class actions instead of tuning in for a trial.