A federal district court judge completely overturned the NFL Sunday Ticket verdict this evening, tossing the case and not even resetting it for trial. Such decisions are rare because judges are typically reluctant to overturn jury verdicts.
An LA jury on June 28 ruled for a class of Sunday Ticket subscribers who alleged the league kept the price of the out-of-market package artificially high and forced consumers to buy all teams’ games, not just one. The jury awarded $4.7 billion , which can be tripled under antitrust law, leaving a $14 billion plus liability hanging over the NFL.
But Judge Philip S. Gutierrez, largely agreeing with the NFL’s post-trial motions to undo the decision, wrote in a 16-page ruling that the testimony of two economic experts for the plaintiffs was faulty, as was the method the jury used to calculate the damages.
Notably, Judge Gutierrez did not dismiss that Sunday Ticket could be an antitrust violation, writing “the Court does not find that it would be unreasonable for a juror to find that there was a conspiracy that unreasonably restrained trade. There was evidence in the record—even without the testimonies of Dr. Rascher and Dr. Zona—to support a reasonable jury’s finding of an unreasonable restraint of trade.”
Dr. Daniel Rascher and Dr. John Yona presented economic theories about how the NFL could have sold Sunday Ticket by other than pooling the 32 teams rights and selling it to one distributor. Dr. Rascher looked at a world where each team sold their own rights, and Dr. Zona one in which there was another distributor of Sunday Ticket in addition to DirecTV.
Dr. Rascher concluded there would have been no costs to consumers for Sunday Ticket in his alternate universe and said damages should be $7 billion, the amount the class of subscribers paid during the class period. Dr. Zona’s model came up with a $3.48 billion bill.
Judge Gutierrez hammered the economists in his ruling.
“Dr. Rascher’s trial testimony revealed his… but-for world was not the product of sound economic methodology,” Gutierrez wrote. “Dr. Rascher needed to explain how these out-of-market telecasts would have been available for free to cable and satellite customers in the but-for world. Dr. Rascher did not do so.”
And on Dr. Zona, the judge wrote, “He failed to define an assumption that was necessary for evaluating the rationality and reliability of his models by never deciding what a “direct-to-consumer” product entailed. Without knowing what “direct-to-consumer” meant, it is impossible to determine if it would have been economically rational.”
Judge Gutierrez also agreed with the NFL that the jury came to its damages number based on a misunderstanding of the numbers. The damages can be derived by multiplying $191.26 by the number of subscribers. Why is that important? Because $191.26 is the number one gets by subtracting the price consumers on average paid once discounts and freebies are considered from the far higher list price.
But that means the jurors treated the lower figure as the price consumers should have paid, and deducted it from the far higher list price to get to an over-charge per subscriber..
“Relying on these two inputs, the jury attempted to calculate the average “overcharge” per each subscription,” the judge wrote. “But the jury instead calculated the average “discount” a residential consumer received. Awarding discounts as damages is nonsensical. It is opposite of what the Court instructed and gets the relationship between overcharges and discounts backwards—awarding damages based on the money the residential class members theoretically saved.”
The case has been tossed once before. Filed in 2015, a different district court judge dismissed it in 2017, but it was reinstated on appeal in 2019. Plaintiffs are sure to appeal this verdict to the Ninth Circuit Court of Appeals, the court that reinstated the case in 2019. But for now that $14.1 billion liability hovering over the NFL is removed.
The NFL in a statement said, “ “We are grateful for today’s ruling in the Sunday Ticket class action lawsuit. 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.”
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