Massive Class-Action Antitrust Lawsuit Against NFL Kicks Off

Is the NFL going to get flagged for an illegal formation? 

On Wednesday, a class-action lawsuit years in the making that takes the National Football League to task for its out-of-market broadcast strategy finally kicked off. If successful, the case could cost the league up to $21 billion — and reshape a key pillar of its business model.

The Out-Of-Market Square Riot

The NFL’s broadcast model is fairly fan-friendly, at least if you’re a casual fan or live in your favorite team’s market, with local games plus three other out-of-market games piped over the airwaves for free every Sunday on Fox, CBS, and NBC. But for any die-hard who needs more than that — or, say, a lifelong Tampa Bay Buccaneers fan who moved to Seattle, where broadcast Bucs games are rare — the only option is NFL Sunday Ticket, which grants access to virtually every out-of-market game for the not-so-low price of $349 per year. The service was available only via DirecTV for years, before the NFL made YouTube the exclusive partner in 2023.

The class-action lawsuit, initiated by a San Francisco sports bar in 2015, now has over 2.4 million members and is alleging that the entire Sunday Ticket operation violates antitrust law:

• The plaintiffs argue that the NFL and its 32 franchises made an anti-competitive agreement to force fans to pay for all out-of-market broadcasts in one big package, rather than offer them piecemeal. Without such agreements, franchises could theoretically offer their games à la carte at a lower price, or certain teams could join together for smaller packages.
• The plaintiffs also allege that the league and its 32 franchises abused their market power to engage in a price-fixing scheme to boost the price of Sunday Ticket when negotiating terms with broadcast partners.

Free Safety: The NFL’s legal retort is likely to be as simple as a Cover 0 defense: Sure, each team is technically its own business entity, but the league is a trade association and can therefore collaborate with teams in broadcast negotiations — especially for a tertiary package designed only for die-hard fans. If the NFL loses, plaintiffs estimate the damages at $7 billion. Given it’s an antitrust case, those damages would therefore triple. A loss could also force the NFL to rejig its broadcast structure, which the league threatens could mean fewer free games. We’ll call that offsetting penalties.