But there’s a catch. Unlike the other full season sports packages, NFL Sunday Ticket is only available on DirecTV. With a customer base of 13.5 million subscribers, DirecTV pal es in comparison to the approximately 90 million cable subscribers in the country. This means that a large portion of the television-viewing population cannot get the Sunday Ticket package. Even worse news, don’t expect Sunday Ticket to be available on cable anytime soon. Last year, DirecTV renewed its exclusive Sunday Ticket agreement with the NFL through 2010. The Rupert Murdoch- controlled company will now pay $700 million annually for the rights, while in contrast, CBS and Fox pay $622 and $715 million, respectively, for their games. While cable would have loved to get in on the action, DirecTV’s bid went above and beyond what any of the cable companies were willing to pay.
If this exclusivity deal seems a little monopolistic to you, you’d be right. In fact, one particularly litigious DirecTV customer brought a lawsuit against the NFL in 1998. In Shaw v. Dallas Cowboys, the plaintiff argued that the NFL’s joint agreement with DirecTV was a violation of Section 1 of the Sherman Act. The NFL countered with the argument that the selling of the rights was exempt from antitrust law under the Sports Broadcasting Act, which grants an antitrust exemption to “sponsored telecasts.” Sponsored telecasts refer to broadcasts financed by advertising, which is the category the regular broadcast games fall under. The NFL argued that the games available through DirecTV also fell under the exemption; however, the district court ruled that to apply the exemption to the Sunday Ticket games would effectively make the exception into the rule (this was later affirmed by the Third Circuit).
The suit evolved into a class action encompassing all Sunday Ticket subscribers. The parties eventually settled, with the plaintiffs getting a share of $7.3 million, discounts on NFL merchandise, and the opportunity to buy access to Sunday Ticket on a weekly basis. This initial agreement, however, was rejected by the district court because it was too favorable to the league (the NFL could rescind the weekly Sunday Ticket option after one season), and the attorneys’ fees were too high for the amount the plaintiffs actually received in the settlement (the attorneys got $3.7 million in fees while the 1.8 million members of the class had to split the settlement). The agreement was revised to increase the settlement pool by $1 million and also forced the NFL to offer the weekly Sunday Ticket package up until 2004.
So where does that leave you, the diehard football fan? Pretty much back where you started. For the immediate future, Sunday Ticket will still be in the firm grasp of DirecTV, but there are several possibilities for opening up Sunday Ticket access to the masses. While the simplest solution would be for the NFL to let cable companies offer Sunday Ticket, this could end up hurting cable customers in the long run. With Sunday Ticket available on cable, there would be a mass exodus from DirecTV, which could severely affect the ability of DirecTV to compete with cable. With less competition, cable companies would resort to their old monopolistic ways. This scenario is unlikely, as the NFL would not want to give up a single huge payment for several smaller payments. The NFL is also against the widespread offering of the Sunday Ticket package because it feels it would hurt ratings for the local broadcast games. So, any possible solution would have to balance the concerns of the NFL over local ratings, the necessity of maintaining a legitimate cable competitor, and the needs of the consumer.
Fortunately, a solution that satisfies all three of these concerns is already being utilized by another sport—baseball, with its MLB.TV service. MLB.TV, which, as of last year, already has a subscriber base of 850,000, provides streaming video of live baseball games to out-of-market fans, and this model easily could be adapted for the NFL. Instead of offering access to every game for every team, pricing instead could be on a per-team basis. This would prevent a decrease in local ratings and also insure that DirecTV’s subscriber base remains stable. Watching football is more of a social event than watching baseball, so many fans would prefer to watch the game on a regular television than on a computer. Still, by allowing broadcasting games online, the NFL would be able to give fans who don’t or can’t get DirecTV another viable viewing option.
For now, though, you’ll have to be content with heading out to your local sports bar to get your football fix. And maybe that’s not such a bad thing. Despite the overpriced food and drink, there’s nothing quite like taking in a game surrounded by tons of rabid football fans. Just try not to get into an argument with the guy wearing the Joey Harrington jersey sitting at the table next to you; he’s suffered enough.
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