NFL Sunday Ticket Lawsuit Could Change How Sports Events Are Broadcast

One of three possible outcomes awaits the NFL Sunday Ticket lawsuit.

The Boring Option — a legal victory for the NFL. Last week, a jury ruled that the league had operated an illegal monopoly by bundling individual teams’ media rights with out-of-market franchises, resulting in limited access for fans (and bars) at higher prices.

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But as early as July 31, presiding judge Philip Gutierrez could overturn that ruling or reverse the decision to allow the league to continue operating as usual. If the NFL fails to meet Gutierrez’s demands, the league could appeal and ask for a stay, which if granted would mean potential payments and changes would be put on hold as the case moves up the legal ladder, likely ending up before the Supreme Court.

A Hard-To-Imagine Scenario: Congressional Intervention. The NFL’s television strategy has long drawn legal scrutiny. After the NFL’s first attempt at a league-wide deal with CBS was blocked by a judge on antitrust grounds, then-commissioner Pete Rozelle secured congressional support through the Sports Broadcasting Act of 1961 (SBA). The act allowed the NFL and other professional leagues to sell all of their television rights in a package, provided the broadcasts were delivered over-the-air (rather than via yet-to-be-invented satellite or premium cable subscriptions).

This time, the jury seemed to reject the NFL’s defense of the SBA. The SBA applies only to over-the-air broadcasts on channels like CBS and FOX, not distribution via satellite (DirecTV) or the Internet (YouTube), although league officials argued that Sunday Ticket is derived from those traditional agreements in a critical way.

In theory, lawmakers could update the SBA to include these modern methods. But I don’t foresee current Commissioner Roger Goodell betting on a bipartisan deal in today’s D.C. if there’s another option (despite his family history). Not to mention that the leagues existing the status of the antitrust exception has already been the subject of discussion in the Senate.

If these results are not obtained, the third possibility is more interesting.

If the NFL is forced to change how it distributes non-broadcast games on local TV and cable, it may be able to follow the NBA and MLB’s lead and make the service available out of market through multiple providers (such as Amazon Prime Video, YouTube, league-owned apps, etc.). NBA League Pass and MLB.TV are also offered at lower prices than Sunday Ticket, with single-team and single-month options also available. Interestingly, NFL stock is also cheaper internationally through the Game Pass product.

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However, other sports deals are reportedly structured around the league receiving a share of subscriber revenue rather than an upfront fee. YouTube is estimated to pay the NFL $2 billion per year for exclusive rights to Sunday Ticket.

The Sunday Ticket remains relatively unavailable in the United States, plaintiffs said, because the NFL restricts access to the market to increase the money CBS and Fox receive for games. If can broadcast (about $4.3 billion a year between the two). Meanwhile, the networks and the league have said local exclusivity allows them to invest so much in award-winning coverage, which makes up the bulk of the most watched television programming each year, and keep the games on free-to-air stations.

The question remains what impact a cheaper Sunday Ticket product would have on local viewership (given that new Sunday Ticket viewers would still be watching CBS and Fox productions, just not the ones they are exposed to on traditional TV, and therefore likely be less valuable to local advertisers).

In a worst-case scenario for CBS and Fox’s dominance of the NFL, the ongoing legal dispute could theoretically end in a return to the status quo of the 1950s, when individual teams handled their own television negotiations.

In that world, we could watch Cowboys games broadcast outside the country—yes, there are still a few—available on Max, for example, or Steelers games streamed on Netflix. In baseball, we’ve already seen Amazon invest in a Yankees-only package, though for now it’s limited to the team’s regional TV territory.

The whole concept of differentiating viewing access based on a fan’s physical location was already outdated before this case came to light. So-called “geoblocking” strategies are a relic of the pre-digital era. Now, regional sports networks face extinction as leagues consider all-in streaming products like Apple’s MLS Season Pass, which don’t separate nearby viewers from those farther afield. But at least one expert has pointed to the legal risks these packages could face, depending on the outcome of the NFL’s lawsuit. Some coordination between franchises is necessary to organize and televise a sporting event; the question is how much it would cost unreasonable.

Assuming YouTube doesn’t lose access to the games it currently broadcasts, giving up exclusive privileges might not be such a bad thing for the streaming giant in the new world order. The service could be unbundled to offer cheaper, more flexible packages for fans while still competing with other platforms based on customer experience.

It’s a battle YouTube consistently wins. The app controls about 10% of airtime, according to Nielsen, more than any distributor except Disney, not to mention its mobile dominance. It’s now regularly called a “viewing giant” and even arguably “the most powerful media platform in human history.”

If this sounds familiar, YouTube has also faced calls to launch its own antitrust investigation.

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