NFL's $12 Billion Deal With DirecTV Faces Major Antitrust Lawsuit

[Alan]

https://www.yahoo.com/tv/nfls-12-billion-deal-with-directv-faces-major-124085915775.html
"On Monday, a major class-action lawsuit was filed against the National Football League and DirecTV by the prominent antitrust attorney Michael Hausfeld and colleagues at Hausfeld LLP.

Hausfeld, whom ESPN once called “one of the most powerful people in sports,” seeks to represent a class of “commercial subscribers” to DirecTV’s Sunday Ticket, a package of all out-of-market football games. The plaintiffs would be bars and restaurants throughout the nation, led by a San Francisco pub known as The Mucky Duck, seeking to end what they see as a conspiracy.

If bars and restaurants want to show these games, they must go through DirecTV, which has an exclusive $12 billion deal with the NFL. But it can be expensive. According to the lawsuit, a bar with occupancy up to 100 patrons will pay $2,314 for Sunday Ticket in 2015 while larger establishments like Las Vegas hotels are charged more than $120,000 per year.

“But for the NFL teams’ agreement in which DirecTV has joined, teams would compete against each other in the market for NFL football programming, which would likely induce more competitive pricing,” states the complaint.

Last month, lawyers representing football fans filed their own class-action lawsuit over Sunday Ticket, seeking an end to a system of blackouts and all-or-nothing out-of-market TV game packages. The NFL and DirecTV were hit with this lawsuit after fans experienced some pretrial success in similar litigation against other sports leagues. The National Hockey League even came to a proposed settlementwith fans that would result in an option to purchase their favorite teams’ out-of-market games at a discounted price.

The latest lawsuit arguably goes even further, painting a broader picture why the NFL’s deal with DirecTV should be deemed a violation of two sections of the Sherman Antitrust Act. The attorneys behind the lawsuit are the same ones who represented college athletes in an antitrust lawsuit against the NCAA in a drive toward compensation for amateurs. Now, with references to the AT&T/DirecTV merger and the 2010 Supreme Court ruling American Needle v. National Football League, which held that NFL teams are capable of conspiring when making licensing deals, they are attacking the very essence of a professional sports league striking an exclusive television deal. They are not only filing a lawsuit over the arrangement that NFL teams have with each other, but also one that challenges the limiting of Sunday Ticket distribution to just DirecTV.

“Of the 4 major professional sports in this country—baseball, basketball, hockey, and football—the only one with an exclusive out of market broadcasting arrangement is the NFL/DirecTV Sunday Ticket,” states the complaint. “Major League Baseball, the National Basketball Association, and the National Hockey League all distribute live out of market games through multiple MVPDs [multichannel video programming distributors], including, for example, DirecTV, Dish Network, Comcast, Cox Cable and Time Warner.

"As a result, DirecTV does not charge nearly as much for access to MLB Extra Innings, NBA League Pass, and NHL Center Ice, which provide access to more games per week over a longer season than the NFL,” continues the complaint, which is adorned with charts showing that prices for packaged football games are increasing at a much greater rate that the other sports’ as well.

The plaintiffs are seeking the recovery of damages for “supracompetitive premiums” that DirecTV has charged for NFL Sunday Ticket, and perhaps more tantalizing, an injunction on a deal that was renewed in 2014.

“But for the exclusive agreement between DirecTV and the NFL, additional MVPDs would be willing to compete for consumers of these games,” says the complaint.

As noted in our past stories on the sports TV antitrust front, this is a big issue for entertainment at large because live sports has a big impact on cable and satellite subscriptions and whether consumers are cord-cutting. If the lawsuit makes it to trial, the NFL and DirecTV may have the opportunity to showcase the pro-competitive effects of bundled packages and exclusive deals, though there likely will first be a lot of antitrust analysis on the horizontal agreement among NFL teams as well as the league’s arrangement with DirecTV to exert monopoly power."
We should all cross our fingers and hope this lawsuit is successful.

 

[drasconis]

My impression is that the courts have been begging congress to provide better instruction (laws) here for years. The court cases I have read all clearly state that they know sports leagues are unique situations - they don't want to brightline rule on them and thus almost always make their rulings very limited in scope. That said since congress hasn't given anyone but MLB serious immunity they can't treat them as such. Sooner or later Congress will have to do something, I keep wondering which case will force it...maybe this one.
Note that I could see this being a pretty strong group pushing for it - for instance NFL/NBA/NHL/etc as a group trying to get MLB like immunity. Would be interesting, if MLB would see this as a competitive advantage they want to keep themselves or if they feel that putting all sports leagues under the umbrella would give them extra protection from the occasional threat of losing their immunity and join in the push or fight it...

 

[Rmfnlt]

All I can say is that I have felt like a captive audience with The Ticket since 1998... and it's very annoying.

 

[fearsomefour]

Up next I think I will sue so that I can tell the nearest movie theatre to me what movies to carry and what to charge.

 

[Hey Man]

I have the NFL Ticket since 99. I just want to watch Rams games and other good games. I don't want to be stuck watching just whats offered in my area. I don't care about what bars have to pay, I have to pay too. What ever has to be done within the law, than get it done. I just want the freedom to watch the games I want to watch.
Now in my area because I have Directv I can't get most of the local hockey and baseball because they are on Comcast Sports Net. So there is a price I have to pay too. I am just not much of a baseball and hockey fan so i can do with out.

 

[drasconis]

My impression is that the courts have been begging congress to provide better instruction (laws) here for years. The court cases I have read all clearly state that they know sports leagues are unique situations - they don't want to brightline rule on them and thus almost always make their rulings very limited in scope. That said since congress hasn't given anyone but MLB serious immunity they can't treat them as such. Sooner or later Congress will have to do something, I keep wondering which case will force it...maybe this one.
Note that I could see this being a pretty strong group pushing for it - for instance NFL/NBA/NHL/etc as a group trying to get MLB like immunity. Would be interesting, if MLB would see this as a competitive advantage they want to keep themselves or if they feel that putting all sports leagues under the umbrella would give them extra protection from the occasional threat of losing their immunity and join in the push or fight it...

Not to brag...OK, actually am bragging....wrote a paper/presentation on the NCAA image use a about 7 years ago, got a decent grade on it though the professor and the class were skeptical on it...got the outcome right in my prediction

 

[fearsomefour]

a bar with occupancy up to 100 patrons will pay $2,314 for Sunday Ticket in 2015

$144 a week for every Sunday game at a bar?
Pretty good deal if you ask me.

 

[RamFan503]

$144 a week for every Sunday game at a bar?
Pretty good deal if you ask me.

To put it in perspective, that means they would generally have to generate between $450 and $500 in extra revenue each week that they could directly (no pun intended) attribute to having NFL ticket. If you have a 100 seat establishment, you are not likely to crack that nut unless you are flat out dead on Sundays without it. Sunday Ticket is not as much of a draw as you think for most establishments. If you know any bar owners, ask them if they have run the numbers. Some may keep it just to have a bit of an edge but the profit margin on most of these places is not all that great and generally speaking the ticket ends up being at best a break even.

 

[Rams43]

I'm a big fan of competition.

I would LOVE to be able to pit several cable providers against each other in order to secure the best rate.

But I have to have my ST. So as long as Direct has an exclusive, I'm stuck.

I'm hoping for success in this lawsuit, too.

 

[GabesHorn]

I copied this from our member Rams43 on another board on the same subject almost. Here it is:
I got a pretty good deal, I think.

I went straight to retention, as usual. I didn't have to threaten to cancel, I merely told the person that I was on a budget and was reviewing my entertainment dollar options. I mentioned that I was constantly receiving offers from other cable providers that were very tempting, but I really enjoyed the Sunday Ticket. Could he do anything for me there?

He said my timing was perfect, and that he was prepared to offer me free ST. I said that that sounded pretty good, but was that the best he could do?

He then said he could lower my monthly bill by $10 for 12 months. I said that sounded fine, but was that the best he could do?

He then additionally offered to lower my monthly by $5 dollars more for 6 months and give me free Showtime for 4 months. I said fine, but is that the best he could do?

He then laughed and said "yeah, my bag is now empty". I chuckled and said "let's do this, then".

I recommend staying pleasant at all times and ALWAYS ask at the end of their last offer, "is that the best you can do?". ALWAYS. Only after you've determined that they've finally reached their limit should you say yes. That's an old negotiating trick I learned at the school of hard knocks. Lol.

BTW, I may have outsmarted myself a little bit. They transferred me over to verifications and recorded my agreement. A few minutes later I recalled that no one, including me, had specifically mentioned Red Zone channel, which I have come to really enjoy.

Sure enough, when I called back, nobody would budge. They more or less said a deal is a deal. I made multiple calls to try with different persons and even insisted on speaking with a retention dept supervisor. But no joy. So get that Max ticket included up front, fellas! It's a $102 value.

Then again, I can't complain too much. The reduced monthlies they gave me will more than cover the price of the Red Zone package.

One last thing. If you don't like the way the conversation is originally going, just politely hang up and call again later to try with another agent. And put a smile in your voice when you call, as if you were calling a friend to go out to dinner, or something.

My original call, including recorded verification, took less than 10 minutes.

Hope all this helps... " ME Gabe again... I just did this about a month ago and I also had immediate success as I did last season. This is almost the best proven method I've EVER seen. I wish I was as smooth as our buddy is or I truly believe I could have even gotten more.

You have nothing to lose if you try this. Make sure if you are not happy with the agent you have then just hang up and start again. Its not that hard just read it a couple times before you attempt. Direct TV has plenty to offer each family in their bag of tricks to keep you. They charge us too much, as it is to make up for this so called loss so don't feel bad getting the NFL package FREE every year. I don't hope... I know this WILL help most everyone and I hope to read the success reports as we wait on the courts to help us out more. Lets here from you guys.

 

[dieterbrock]

I negotiate with Direct tv each year to get the best price I can, but the reality is that in the large scope of things, its pretty cheap

 

[GabesHorn]

I negotiate with Direct tv each year to get the best price I can, but the reality is that in the large scope of things, its pretty cheap

Get it free every year. Never pay them that stupid money. Its done very easy if you are nice and if you can't be nice then let your wife get it free for you. If you are constantly accepting free packages to premium channels it WILL take away some of the tricks they have in that secret drawer you can even refer too. They know you know they charge everyone a different price. I hate the saying but "The squeaky wheel gets the grease" its less than even being squeaky . Ask with the confidence in your voice you know others get it free without throwing that in their face. I want my fellow RAMS brothers to always get the NFL package FREE.

 

[drasconis]

To put it in perspective, that means they would generally have to generate between $450 and $500 in extra revenue each week that they could directly (no pun intended) attribute to having NFL ticket. If you have a 100 seat establishment, you are not likely to crack that nut unless you are flat out dead on Sundays without it. Sunday Ticket is not as much of a draw as you think for most establishments. If you know any bar owners, ask them if they have run the numbers. Some may keep it just to have a bit of an edge but the profit margin on most of these places is not all that great and generally speaking the ticket ends up being at best a break even.

I think it really depends on where you are. I am in the DC area, and on Sundays the bars are PACKED if you have sunday ticket. I Literally know one place where they cover the pool tables and turn them into standard tables for the extra seating. Anyplace here without DT is empty on those sundays.

The two factors I think push it are the fact this is a transient town (I found ATL very similar - most people came from elsewhere) so the local team is of limited draw by itself and I think fantasy FB has generated much more interest in the other games going on (besides the big name match ups every week).

 

[drasconis]

I'm a big fan of competition.

I would LOVE to be able to pit several cable providers against each other in order to secure the best rate.

But I have to have my ST. So as long as Direct has an exclusive, I'm stuck.

I'm hoping for success in this lawsuit, too.

The trouble is I do not think that they can force them to use multiple broadcasters (for the entire package)...the best they could likely get is that each team does its own deal (which likely would be with a single source) either locally or nationally.

 

[Amitar]

Sounds promising I'll be able to watch Ram games someday without having to buy Direct TV. It is a monopoloy.

 

[The Ripper]

Get it free every year. Never pay them that stupid money. Its done very easy if you are nice and if you can't be nice then let your wife get it free for you. If you are constantly accepting free packages to premium channels it WILL take away some of the tricks they have in that secret drawer you can even refer too. They know you know they charge everyone a different price. I hate the saying but "The squeaky wheel gets the grease" its less than even being squeaky . Ask with the confidence in your voice you know others get it free without throwing that in their face. I want my fellow RAMS brothers to always get the NFL package FREE.

I do the same thing but usually only get it reduced but my contract is up so I will pass on the new boxes since they just replaced them with the service plan and get the bill reduced. I will make sure to remember the red zone channel this time.

 

[DR RAM]

To put it in perspective, that means they would generally have to generate between $450 and $500 in extra revenue each week that they could directly (no pun intended) attribute to having NFL ticket. If you have a 100 seat establishment, you are not likely to crack that nut unless you are flat out dead on Sundays without it. Sunday Ticket is not as much of a draw as you think for most establishments. If you know any bar owners, ask them if they have run the numbers. Some may keep it just to have a bit of an edge but the profit margin on most of these places is not all that great and generally speaking the ticket ends up being at best a break even.

True for the day, but, and you know this better than me, if you impress these people with good drinks, food, prices, and atmosphere, then your patronage will certainly increase.

 

[Alan]

dieterbrock minimizing the importance:
I negotiate with Direct tv each year to get the best price I can, but the reality is that in the large scope of things, its pretty cheap

Doesn't matter how cheap it is if you can't get it because you have Dish instead of DirecTV. I can't even get DirecTV because of the location of their satellites. Two of my neighbors have very tall trees which block the signal. Don't even get me started about cable.

 

[RamzFanz]

To put it in perspective, that means they would generally have to generate between $450 and $500 in extra revenue each week that they could directly (no pun intended) attribute to having NFL ticket. If you have a 100 seat establishment, you are not likely to crack that nut unless you are flat out dead on Sundays without it. Sunday Ticket is not as much of a draw as you think for most establishments. If you know any bar owners, ask them if they have run the numbers. Some may keep it just to have a bit of an edge but the profit margin on most of these places is not all that great and generally speaking the ticket ends up being at best a break even.

I would think hosting FF leagues would be an advantage. Throw in weekly prizes and such. Posting results on the wall. Few bars around here seriously cater to FF.

 

[RamzFanz]

Doesn't matter how cheap it is if you can't get it because you have Dish instead of DirecTV. I can't even get DirecTV because of the location of their satellites. Two of my neighbors have very tall trees which block the signal. Don't even get me started about cable.

Don't they have an online feed for people who can't get directv? I thought they did.