The NFL and DirecTV: How the Sunday Ticket package can be classified as an illegal monopoly

Students in this semester’s Sports Media class and followers of media issues related to sport, may have caught wind of the latest scandal involving DirecTV and the NFL. A class action lawsuit has been proposed against DirecTV and the National Football League stating that the two have colluded to raise the price of the Sunday Ticket package which DirecTV sells allowing them the rights to broadcast out-of-market games.

But just who exactly is suing the two parties? That would be bar and restaurant owners, specifically those in the San Francisco area. They figure that they are the ones with the most to lose as they are paying higher prices than they would if multiple broadcasters were allowed access to these games. Therefore last week they decided to file a lawsuit in the federal court in California.

So what’s the problem? Well the owners of these bars and restaurants claim that the NFL is enabling DirecTV to acquire these games illegally through an exclusive deal and maintain a monopoly power. The lawsuit by Ninth Inning Inc. states that the deal between the two parties stifles competition by preventing other TV providers (like Dish) from airing the games.

What does that mean for the average fan? Well if you or I wanted to watch say, the New Orleans Saints at the Arizona Cardinals and we live in Detroit. In order to legally watch this game we would have to be subscribed to DirecTV’s service and additionally subscribe to Sunday Ticket on top of DirecTV’s regular package. Or, we could go to a bar that we knew had a Sunday Ticket subscription and ask them to play it on one of their screens.

So these bars and restaurants know that playing out of market games attracts more customers. However they aren’t given the courtesy of being able to choose a broadcast service, and in order to attract these customers they must subscribe to DirecTV. For us average fans, it means that the costs incurred by bars are passed onto us the consumer, which may translate as increase in menu prices, less money available for improvements to patron comfort, or less TV screens available on which to watch the game you want to.

DirecTV has exclusive rights to Sunday Ticket through the end of the 2022-23 season. The satellite TV provider has offered Sunday Ticket since 1994. For commercial establishments like bars and restaurants, they are expected to pay based on their maximum occupancy. According to the lawsuit the price for commercial establishments has more than doubled between 2010 and 2014. The average bar with an occupancy of 100 people will pay almost $2,500 per year ONLY for Sunday ticket and not including regular subscription fees and HD access fees too.

So where do we go from here? Recently the NFL ended its policy of blacking out poorly attended games on local TV.

Is this a step in the right direction?

Will opening up the “out-of-market” market lead to increased competition and in turn, greater revenue for TV rights for the NFL?

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