NFL readies for multidistrict litigation panel – Los Angeles Daily Journal

KWIKA Partner Greg Aldisert was recently quoted in Ashley Cullins’ Los Angeles Daily Journal piece “NFL readies for multidistrict litigation panel,” which discusses the ongoing lawsuits alleging that DirectTV’s NFL Sunday Ticket package violates antitrust law.

The full article can be found below:

The United States Judicial Panel on Multidistrict Litigation will hear arguments Friday in New Orleans about who should have home-field advantage in the growing antitrust litigation involving the National Football League and DirecTV LLC.

The JPML hearing will address an August motion to centralize in the Central District of California eight separate antitrust class actions against the NFL and DirecTV. The lawsuits each claim DirectTV’s NFL Sunday Ticket package, an exclusive arrangement between the two entities, is creating an anti-competitive marketplace for consumers leading to “supracompetitive prices” for live broadcasts of Sunday afternoon out-of-market NFL football games.

Subsequent to the August motion, a handful of bars in New York, along with a few individual customers, filed another suit in October that suggests the NFL shouldn’t be arranging broadcast deals, but rather the teams themselves. The suit lists all 32 NFL teams, as well as the NFL, DirecTV, CBS Corp., Fox Broadcasting Co., ESPN Inc. and NBCUniversal Media LLC as defendants.

“As the Supreme Court has observed, each team ‘is a substantial, independently owned, and independently managed business,’ competing with its rivals ‘not only on the playing field, but to attract fans, for gate receipts and for contracts with managerial and playing personnel,’ as well as ‘in the market for intellectual property.’ Am. Needle, Inc. v. NFL, 560 U.S. 183, 196-97 (2009),” wrote Jeffrey B. Dubner, plaintiffs’ counsel and attorney at Cohen Milstein Sellers & Toll PLLC. “Yet rather than compete in the multibillion-dollar football broadcasting market, they have joined forces to restrict supply and raise prices.”

The complaint states the Sunday Ticket arrangement is unlike anything in American sports. “The comparable bundles of MLB, NHL, and NBA games are each available from numerous distributors, not only DirecTV but many cable companies and competing satellite providers,” Dubner wrote. “Not coincidentally, they are all sold at significantly lower prices, despite being subject to anticompetitive restraints of their own.” Trilogy Holding v. National Football League Inc. et al, 15-cv-8188 (S.D.N.Y., filed Oct. 16, 2015).

On Oct. 28 the court found the case to be related to that filed by 8812 Tavern Corp., one of the cases before JPML, but at this time it is not included in the pending consolidation decision.

A spokesman for DirecTV sent a comment via email Wednesday stating, “These lawsuits are without merit. We are fully confident in the legality of our agreement with the NFL.”

Gregory Aldisert, partner at Kinsella Weitzman Iser Kump & Aldisert LLP who is not involved in the cases, said the lawsuits raise some valid and serious questions under antitrust law.

“The NFL has to defend by showing that there’s a legitimate purpose for their exclusivity,” Aldisert said. “I think that’s going to be tough to do because it’s certainly not necessary to have an arrangement like that.”

Jeffrey S. Kravitz, partner at Fox Rothschild LLP who is also not involved in the cases, said he has always found it funny that in these types of cases Major League Baseball gets “favored nation treatment.”

“There was an opinion in [1922] where the Supreme Court gushed about baseball and said it’s not a business it’s a sport,” Kravitz said. “Every time they do an opinion on baseball and look at antitrust they always look at that.”

The NFL, however, Kravitz said has to play by the rules.

“They had to go to Congress to get antitrust exemption to merge the AFL and NFL,” he said. “It strikes me that all of these cases are likely to be preempted by Congress.”

While it remains anyone’s guess as to what the panel will decide, attorneys agree that it shouldn’t have much bearing on the case.

“If they put it in the Central District, we don’t have a football team here so you’re going to have pundits saying plaintiffs are going to get a break,” Kravitz said.

Fred Taylor Isquith, Sr., partner at Wolf Haldenstein Adler Freeman & Herz LLP in New York and counsel to a New York plaintiff, Jon 2 LLC, doing business as Manny’s on 2nd, agreed, and added that he expects a decision quickly.

“The panel acts very quickly, surprisingly so,” Isquith said. “I would think we’ll have a response before Christmas. I would think that’s very likely.”

DirecTV is represented by Kirkland & Ellis LLP. The NFL is represented by Covington & Burling LLP. NFL attorneys did not respond to a request for comment.

Aldisert said it’s tough to defend a lawsuit when the claims include driving up prices and depriving consumers of choice, and in addition to the legal issues at hand the lawsuits raise some interesting business questions for the NFL.

“Since they’ve never done it the other way, allowing out of market games to be broadcast, I wonder how they even know they make more money this way,” he said. “I could see a scenario where they could potentially make as much, or more money, by broadening the number of people that buy more limited packages, or if the packages become cheaper because they’re not exclusive anymore.”

Kravitz said NFL Commissioner Roger Goodell is “an extraordinarily bright man” and a settlement would make sense.

“Where it’s going to get interesting [is] if the NFL decides to offer alternatives, several packages instead of one,” he said. “You’ve got some plaintiffs’ lawyers looking at a huge cash day if there’s a settlement along those lines.”

Source: Ashley Cullins, Los Angeles Daily Journal