LOS ANGELES – A federal judge overturned a jury’s $4.7 billion verdict in the class-action lawsuit filed by “Sunday Ticket” subscribers against the NFL and has granted judgment to the NFL.
U.S. District Judge Philip Gutierrez ruled Thursday that the testimony of two witnesses for the subscribers had flawed methodologies and should have been excluded.
“Without the testimonies of Dr. (Daniel) Rascher and Dr. (John) Zona, no reasonable jury could have found class-wide injury or damages,” Gutierrez wrote at the end of his 16-page ruling.
On June 27 the jury awarded $4.7 billion in damages to residential and commercial subscribers after it ruled the NFL violated antitrust laws in distributing out-of-market Sunday afternoon games on a premium subscription service.
The lawsuit covered 2.4 million residential subscribers and 48,000 businesses in the United States who paid for the package on DirecTV of out-of-market games from the 2011 through 2022 seasons.
“We are grateful for today’s ruling in the Sunday Ticket class action lawsuit,” the NFL said in a statement. “We believe that the NFL’s media distribution model provides our fans with an array of options to follow the game they love, including local broadcasts of every single game on free over-the-air television. We thank Judge Gutierrez for his time and attention to this case and look forward to an exciting 2024 NFL season.”
Calls and emails to the attorneys representing “Sunday Ticket” subscribers were not returned.
The jury of five men and three women found the NFL liable for $4,610,331,671.74 in damages to the residential class (home subscribers) and $96,928,272.90 in damages to the commercial class (business subscribers).
Because damages can be tripled under federal antitrust laws, the NFL could have been liable for $14,121,779,833.92.
Gutierrez did say in his decision that if he did not rule for the NFL as a matter of law, he would have vacated the jury’s damages verdict and conditionally grant a new trial “based on the jury’s irrational damages award.”
Rascher’s models were variations of a college football model. Rascher, an economist at the University of San Francisco, said during his testimony that “they figured it out in college sports, (so) they would certainly figure it out at the NFL.”
Gutierrez said Rascher’s testimony “was not the product of sound economic methodology” and that he needed to explain how out-of-market telecasts would have been available on cable and satellite without an additional subscription.
Gutierrez also found flaws in Zona’s “multiple distributor” models because it predicted consumers would have paid more if another service besides DirecTV offered “Sunday Ticket” and there was an unsupported assumption that another distributor — either cable, satellite or streaming — would have been available.
“Without knowing what “direct-to-consumer” meant, it is impossible to determine if it would have been economically rational for consumers to purchase ”Sunday Ticket” from an alternative distributor at a higher price,” Gutierrez said. “And, that definition was necessary for determining whether a viable alternative distributor even existed during the class period. Without that information, the Court cannot determine whether the but-for worlds without exclusivity were modeled reliably.
The jury’s amount also did not conform to Rascher’s model ($7.01 billion) by Daniel Rascher, or the model ($3.48 billion) by Zona, who was an expert witness in the case.
Instead, the jury used the 2021 list price of $293.96 and subtracted $102.74, the average price actually paid by residential Sunday Ticket subscribers. The jury then used $191.26, which it considered as the “overcharge,” and multiplied that by the number of subscribers to come up with the damages amount.
Gutierrez said the jury did not follow his instructions and “instead relied on inputs not tied to the record to create its own ‘overcharge.’”
It is not the first time the NFL has won a judgment as matter of law in this case, which has been going on since 2015.
In 2017, U.S. District Judge Beverly Reid O’Connell dismissed the lawsuit and ruled for the NFL because she said “Sunday Ticket” did not reduce output of NFL games and that even though DirecTV might have charged inflated prices, that did not “on its own, constitute harm to competition” because it had to negotiate with the NFL to carry the package.
Two years later, the 9th Circuit Court of Appeals reinstated the case.
It is likely the plaintiffs will again appeal to the 9th Circuit.
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