“Because any broadcast involves the active participation and intellectual property of at least the two participating teams and the NFL, an agreement regarding assignment of broadcast rights is essential if there are to be broadcasts at all,” states the NFL’s petition for writ of certiorari.
Highlighting the stakes, the NFL adds that if the Supreme Court doesn’t step in and blow the whistle on a lower federal appeal court’s decision last August, it could impact other sectors of the economy depending on joint ventures involving separately-owned assets. “Such ventures are common not only in sports, but also in the motion picture, recording, publishing, high-tech and other industries in which cooperation is commonly required to produce and license products protected by intellectual property laws,” continues the NFL’s brief.
The case at hand concerns the league’s “Sunday Ticket,” a package of out-of-market games currently available through DirecTV. As most football fans know, watching a local game — the Los Angeles Rams in Los Angeles, for example — means tuning into a local over-the-air station. But if during the season a fan wishes to watch two non-local teams play — a New Yorker interested in a game between the New England Patriots and the Dallas Cowboys, for example — that’s often only available though “Sunday Ticket,” which is priced at nearly $300 per season for an individual and anywhere between $1,500 and $58,000 for commercial establishments like bars and restaurants (depending on size).
A class action lawsuit challenges the status quo.
If teams didn’t pool rights and collectively license, theoretically each team could produce its own version of a game and maybe stream it online. So a game between the Patriots and Cowboys would result in two telecasts (and maybe more), and the injection of off-the-field competition might translate into lower prices and more choices for consumers. At least, that’s what the plaintiffs in the case insist. A federal judge rejected the proposition that output was being limited, but then surprisingly, the Ninth Circuit Court of Appeals revived the case and ruled the plaintiffs should be able to move forward. The NFL now wants the Supreme Court to take another look.
The NFL believes that when it comes to an antitrust challenge over a joint venture’s production and distribution of its joint product, a court should apply a “rule of reason” analysis, meaning a weighing of the pro-competitive features of a restrictive business practice against its anticompetitive effects.