🏈 The NFL's Multi-Billion Dollar Lawsuit

The NFL takes an L in one of the most consequential rulings in the league’s history.

What a time to be alive! The most valuable league in all of sports is officially in a pickle (we’re aware it’s the wrong sport reference but stay with us! 🙄). We wrote about this a couple weeks back, but things have gotten even spicier within the last few days. Last Thursday, a federal jury in Los Angeles found the NFL liable in the Sunday Ticket class action and awarded the plaintiffs ~$4.7B in damages. Let’s review the details of this lawsuit. What does it mean for both the NFL and Sunday Ticket consumers? Could this lawsuit change the way sports are streamed?

Let’s get after it…

What’s the background of this Sunday Ticket lawsuit?

• It all started in 2015 at a San Francisco bar called Mucky Duck. What began as a minor complaint ended up becoming a claim that the league violated antitrust law by bundling all the out-of-market games and making it impossible to buy a one-team package.

• A group of ~2.4M residential and 48K commercial subscribers to NFL “Sunday Ticket” on DirecTV took the league to court in search for $7B of damages…where it actually could have been tripled to $21B per U.S. antitrust laws 😳.

  • To give you an idea…if this current ruling holds, under U.S. antitrust laws the $4.7B number could 3x to ~$14B.

• One of the key claims of the suit is that the league inflates the price of NFL Sunday Ticket.

  • Today on YouTube TV, consumers can purchase the package for $349 per year.

  • Commercial buyers (bars and restaurants) have to pay between $6K and $78K annually for the service, depending on the size of the venue.

• Evidence was even brought in front of the jury where the NFL declined a proposal from ESPN to take over Sunday Ticket last season and price it at $70 (84% decline from its current price), and include single-team packages…instead, the NFL opted for the more expensive YouTube TV. Why?

  • The whole argument from the NFL’s side is that “Sunday Ticket” is considered a premium product (and we guess since it’s premium you should pay half your monthly rent for it? 🤨).

  • New England Patriots owner Robert Kraft even said so himself during his testimony.

  • Even Apple TV made a bid for Sunday Ticket in 2022 where they believed they could have added 15-20M new customers to the product, but the league took a pass.

    • Those numbers didn’t sound too “premium” enough for the NFL.

What happens next for both the NFL and Sunday Ticket consumers?

• The jury took only a few hours to make their decision. But as of now, the NFL was ordered to pay $4B to residential subscribers and $96M to commercial subscribers.

• But let’s be real…this is far from wrapped up. The NFL will fight this. And the next step will be asking the judge on this case to overturn the decision.

  • If that doesn’t work, then the NFL can appeal to the Ninth Circuit and eventually the Supreme Court of the United States — but all of this could take years.

• In the meantime, consumers will have no idea if/when they get money back until a final ruling has been made and all appeals are done.

  • The plaintiffs’ attorneys could take up to 40% of the total amount designated for subscribers. And the remaining money would mean that each of the 2.4M residential class members could get an average of $3,450 apiece.

    • There are still a number of questions to be answered, like: will consumers receive more money if they had purchased Sunday Ticket for a longer period of time? Or will Sunday Ticket be less expensive going forward?

Where could this all lead?

• Market-specific rights deals. We understand there’s still a long ways to go, but hypothetically if the ruling doesn’t change, we could see a major change when it comes to broadcasting rights. NFL teams might be able to make their own individual and market-specific rights deals, and consumers would likely get the ability to purchase individual games or team-specific packages instead of watching local broadcasts (aka “geoblocking”) or purchasing “premium products” such as, Sunday Ticket. However, this could lead to teams selling their rights individually. And not all rights would be sold equally — teams with deeper pockets would be willing to pay more compared to others, leading to better production and a higher quality viewing experience for their team broadcast.

• NFL revenue generation issues. The NFL could even find themselves in quick sand if a judge rules they need to change the structure of their broadcasting/streaming services. Why? Because the NFL salary cap is based on total revenue generated. And YouTube TV pays the NFL $2B annually for the rights to Sunday Ticket…that’s nearly one-fifth of the NFL’s ~$12.4B in annual media rights income. This means the NFL could be in some serious trouble from a revenue standpoint that not only affects the league as a whole but affects players and teams paychecks.

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Quick Hitters

• 🏀 You know how it goes, break some NBA records, win your 18th NBA championship, and then sell the team. Just another Tuesday right? The Boston Celtics majority ownership group, led by Wyc Grousbeck, is planning to put the team on the market. In a statement, the Celtics said the decision to sell was made “for estate and family planning considerations.” Grousbeck and his investment group bought the team from the Gaston family in 2002 for $360M. According to Forbes, the Celtics are valued at ~$4.7B, the fourth-highest among NBA teams — but that was calculated prior to their most recent championship, which more than likely increased their valuation. The Celtics said they expect to sell a majority stake in 2024 or early 2025 with the remaining balance closing in 2028. Grousbeck will stay on as team governor until 2028, when the second part of a deal is expected to close.

  • And it all comes at great timing too. The NBA’s new CBA is designed to break up teams that eventually become too expensive and the Celtics are expected to have the richest starting five in league history…which means Wyc needs a richer partner to come into Boston and take the reigns.

• 🤓 Nick Saban, the former Alabama head football coach is back in Tuscaloosa…kind of? We think? Did he ever leave? In a post-retirement advisory role, reports came out the legendary coach will make $500K a year 😮 acting as an advisor to the Alabama Athletic Director. Saban retired after the 2023 season, his 17th season at Alabama. At the time of his retirement, Saban was making over $9M per season, but the base salary was just over $300K because of the contract’s structure. Saban will also be apart of the College Gameday crew in the fall as well as a college football analyst at ESPN.

• 📺 Welcome back, Hard Knocks! The official kickoff to football season is here and all of us viewers couldn’t be more excited to see the clips on social media and not watch a full episode 😂. The long-running docuseries mostly associated with the preseason is getting started early this summer, as the HBO and NFL Films franchise looks to fight off viewer fatigue by kicking off its most ambitious year yet. Hard Knocks is expanding to show 3 different teams in different aspects of the football season:

  • Offseason: New York Giants, July 2–30 (5 episodes)

  • Training Camp: Chicago Bears, Aug. 6 to Sept. 3 (5 episodes)

  • In-Season: AFC North teams , Dec. 3 into postseason (7 episodes)

    • Hard Knocks will air more episodes than ever before in one season (17), it will also feature the most teams (6).

    • Last summer, HBO said the traditional training camp version of Hard Knocks saw its best viewership in 13 years as it averaged 4.4M viewers per episode as they followed the New York Jets.