Monday, December 10, 2018
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Lawyer Asserts NFL/DirecTV Deal Violates Antitrust Laws
Urges Ninth Circuit to Reinstate Dismissed Action
By a MetNews Staff Writer
An attorney urged a panel of the Ninth U.S. Court of Appeals, at oral argument in Pasadena on Friday, to reinstate a dismissed action against the National Football League which claims that its deal with DirecTV, a satellite service provider, giving it exclusive rights to transmit games not broadcast in the local market, is violative of antitrust laws.
Marc M. Seltzer, of the Century City law firm of Susman Godfrey LLP, representing the plaintiffs, said that if he were a Detroit Lions fan and wanted to watch Sunday’s game with the Cardinals, he wound have to buy a season subscription to DirecTV’s “NFL Sunday Ticket” for “$350 or $400” or “move to Arizona.”
(The basic packet is $293.94, and the Sunday Ticket Max is $395.94.)
Selzer complained of the horizonal agreement—under which all NFL teams have agreed to vest ownership of their games in the NFL—and the vertical agreement under which the NFL licenses all games to be carried by DirecTV, other than those broadcast in local markets by CBS and Fox.
Ownership of Games
Under questioning by Circuit Judge Sandra S. Ikuta, he said it is “very clear” that “each team owns its own right to broadcast its own games,” noting:
“That’s been the case forever.”
(According to his brief, it was established by a district court case in 1938.)
He said that under the horizontal agreement, all 32 teams agreed to “cede their rights to the NFL so it could make the deal with DirecTV.” The teams, under the agreement with the NFL, “cannot compete with DirecTV,” Selzer noted.
DirecTV has been carrying the games since 1994.
Senior Judge Randy Smith remarked:
“I don’t see NFL setting the price….If you don’t allege that they conspired to set the actual price paid by the consumer, then you have no relief for damages.
“The only relief you have is injunctive relief.”
NFL’s Argument
Gregg H. Levy of the District of Columbia firm of Covington & Burling LLP argued for the NFL. He said there is no anticompetitive aspect to the arrangements. He stressed that “every NFL game is broadcast for free.”
Each Sunday afternoon, during the football season, two or three games are aired in each market on commercial television; eight to 10 other games are available only via DirecTV.
Levy reasoned:
“If DirecTV attempted to raise the price of out-of-market games above the competitive level, consumers would simply substitute one of the free in-market games in their place. That would discipline the market….”
The plaintiffs’ action was dismissed with prejudice by District Court Judge Beverly Reid O’Connell of the Central District of California, who died last year.
Plaintiffs’ Brief
In the plaintiffs’ brief, Seltzer and others argued:
“If all U.S. automobile manufacturers agreed with a single sales agent to sell their cars solely through that agent, the arrangement would violate the antitrust laws….It would be no less objectionable for the manufacturers to jointly incorporate a separate entity called the ‘National Car League’ to whom they sold their cars, which in turn agreed to distribute ‘NCL automobiles’ only through ‘DirectCar.’ Yet under the district court’s analysis, these machinations would inoculate the manufacturers, the NCL, and DirectCar from an antitrust suit filed by injured consumers.”
Levy and others countered in the NFL’s brief:
“Far from restricting viewership of NFL games, the NFL’s distribution arrangements have allowed hundreds of millions of viewers to watch NFL games.”
The case is Ninth Inning, Inc. v. DirecTV, LLC, 17-56119.
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