On May 15, 2024, the NFL announced a three-year contract with Netflix for the exclusive streaming rights to two Christmas Day 2024 games – Chiefs vs. Steelers, and Texans vs. Ravens – and at least one “holiday game” in 2025 and 2026. However, with the addition of Netflix, fans must now subscribe to seven services to watch all of the League’s games: traditional network channels (Fox, CBS, NBC, ABC, ESPN), NFL Sunday Ticket via YouTube TV, Amazon Prime Video, Peacock, NFL+, and ESPN+.[i] If a fan only subscribes to the respective streaming service for the shortest amount of time necessary, it will cost approximately $520.[ii] Additionally, fans do not have the option to support only one team. For example, if Alabama fans want to keep up with Jalen Hurts, or a Taylor Swift fan want to support Travis Kelce, neither fan has the option of purchasing only games in which the Eagles or Chiefs compete. They must either pay the full price of Sunday Ticket – a minimum cost of $350 without YouTube TV, $449 with a YouTube TV subscription – or settle for catching the highlights on Tik Tok and X.[iii] This cost analysis excluded streaming-exclusive games, such as the Netflix deal.
As of June 27, 2024, the above-described ultimatum very likely constitutes a major antitrust violation. A Los Angeles jury found that the NFL colluded with DirecTV, along with CBS and Fox, to drive up pricing of its DirecTV "Sunday Ticket" package and ordered the League to pay $4.7 billion in damages for violating antitrust law.[iv] During his closing remarks, plaintiffs’ attorney Bill Carmody showed an April 2017 NFL memo showing the League was exploring a world without "Sunday Ticket" in 2017, where cable channels would air Sunday afternoon out-of-market games not shown on Fox or CBS.[v] Callous conduct such as this apparently made the jury’s decision rather easy – deliberation lasted five hours over two days.[vi]
Still, the NFL staunchly defends its premium subscription structure, stating it believes its “media distribution strategy, which features all NFL games broadcast on free over-the-air television in the markets of the participating teams and national distribution of our most popular games, supplemented by many additional choices including RedZone, Sunday Ticket and NFL+, is by far the most fan friendly distribution model in all of sports and entertainment,” and promised to contest the jury’s decision.[vii]
Though the opinion has yet to be released, one can certainly predict its legal conclusions based on the Nineth Circuit’s denial of the NFL’s motion for summary judgment. See In re Nat’l Football League’s Sunday Ticket Antitrust Litig, No. 15-02668, 2024 U.S. Dist. LEXIS 6373 (9th Cir. Jan. 11, 2024). (“Sunday Ticket”). The crux of the plaintiffs’ argument alleged that the NFL violated antitrust law, specifically §1 and §2 of the Sherman Act, by limiting competition, restricting over-the-air broadcasts, and selectively granting exclusive broadcasting rights. Sunday Ticket, 2024 U.S. Dist. LEXIS 6373, at *4-6.
The NFL argued that the Sports Broadcasting Act (“SBA”) protected its exclusive broadcasting agreement for Sunday games. The SBA gives the NFL, NHL, NBA, and MLB an antitrust exemption, allowing leagues to enter into league-wide television contracts with networks like CBS, ABC, NBC, and FOX on behalf of the teams. However, the language of the SBA’s does not cover satellite or digital distributions. The court found that the NFL’s conduct exceeded the boundaries of the SBA – that the act did not pronounce a broad, sweeping policy, but rather engrafted a narrow, discrete, special-interest exemption upon the normal prohibition on monopolistic behavior. Id. at *31.
The Nineth Circuit determined the SBA covers the NFL’s collective sale of telecast rights to free, over-the-air television networks, but does not cover league contracts with cable or satellite TV services for which subscribers are charged a fee. Id. at *26, 31. (emphasis added). Because streaming services operate in that very way, the court’s analysis in Sunday Ticket provides a realistic prediction of the outcome for future antitrust litigation involving streaming-exclusive games.
Plaintiffs challenged specific provisions within the NFL/Networks’ agreements, alleging they suppress competition outside the SBA’s limited authority by restricting resale of products. Id. at 15, 29. These restrictions mandate that the resold product (i.e. games) be marketed as premium products for avid League fans and sold on exclusively a subscription basis. Id. at 15-16. Also, when the games are sold as a premium package, the NFL must require the resale party (i.e. DirecTV or YouTube TV) to make the game unavailable in the area where CBS or FOX are broadcasting the local game, so that even a subscription package does not compete with local, over-the-air broadcasts. Id. at 17, n.5. As a result of these restrictions, the only option for the NFL and its member clubs to resell out-of-market telecasts is as a premium subscription package, which DirecTV [and now, YouTube TV] has purchased the exclusive right to provide. Id. at 16.
The NFL/Direct TV Agreement limits NFL and its member clubs from offering additional over-the-air broadcasts, thus enhancing the value of Sunday Ticket. Id. at 17. The Agreement specifies a minimum number of games that must be restricted to certain local markets and cannot be made available as national over-the-air broadcasts. Id. Further, it prevents telecasts from appearing on more than one channel so that consumers only have access to three of the ten to thirteen Sunday games. Id. at 17-18. The agreement requires that no more than two over-the-air broadcasts can be shown in any location, giving DirecTV exclusive streaming rights to every single other game. Id. at *18-19.
Thus, the Nineth Circuit found ample evidence to support an inference of antitrust conspiracy that does not fall under the SBA’s protection. Id. at 19. DirecTV had exclusive control of out-of-market telecasts; both the NFL/Network Agreement and the NFL/DirecTV Agreement limit competition with DirecTV’s paid telecasts from the NFL and its member clubs; and the NFL/DirecTV Agreement contains provisions that also restrict over-the-air broadcasts. Id. (emphasis added). Conspiracy yields anticompetitive conduct, imposing unlawful § 1 violations, i.e., unreasonable trade restraints, on the market. Courts determine unreasonable anticompetitive conduct by analyzing the facts under the Rule of Reason, considering facts of the business, the restraint’s history, and the rationale for its imposition. Id. None favor the NFL. The league asserts such agreements are essential for the NFL’s operation, yet the NCAA’s television structure, which allows each school to form its own agreement to sell their television rights directly to a broadcast network, undermines the necessity of the NFL’s contention. Id. at 50.
Superimposing these findings in Sunday Ticket onto streaming-exclusive games, it appears that the NFL will gift its fans a flagrant antitrust violation this Christmas Day. While it is a choice whether to subscribe to Netflix, this choice transfigures into an ultimatum for Chiefs, Steelers, Ravens, and Texans fans. The “streaming exclusive” nature of this agreement means Netflix has exclusive control of out-of-market telecasts, thereby limiting competition from free, over-the-air broadcasts.
Despite the NFL’s confidence in its “fan friendly distribution model in all of sports and entertainment,” the exclusivity and subscriptive nature of the “Sunday Ticket” package ultimately proved to be the League’s death kneel. By selling its package of Sunday games at an inflated price and restricting competition by offering “Sunday Ticket” only on a satellite provider, the jury quickly determined that the NFL’s conduct extended well beyond the SBA, thereby violating antitrust law.[viii] Thus, if forcing fans to purchase one subscription-based platform to access all the League’s Sunday games constitutes an antitrust violation, how would a jury rule when faced with seven subscription-based platforms?
Keeton Cross (Twitter: @keeton_cross) is a third-year law student at Cumberland School of Law. She holds degrees in Marketing and English from the University of Alabama.
[i] Max Molski, How much will it cost to stream every NFL game in 2024? Breaking down every subscription, NBC New York, https://www.nbcnewyork.com/news/sports/nfl/nfl-cost-breakdown-stream-every-game-2024/5429939/
[ii] Id.
[iii] Id.
[iv] Ryan Kang, NFL Ordered to pay $4.7B in “Sunday Ticket” antitrust trial, Sports Business Journal, available at https://www.sportsbusinessjournal.com/Articles/2024/06/27/nfl-sunday-ticket-lawsuit-verdict.
[v] Kevin Seifert, Jury rules NFL violated antitrust laws in “Sunday Ticket” case, ESPN, available at https://www.espn.com/nfl/story/_/id/40447020/jury-rules-nfl-violated-antitrust-laws-sunday-ticket-case
[vi] Id.
[vii] King, supra.
[viii] Seifert, supra.