Antitrust Suit Against NFL and DirecTV

     LOS ANGELES (CN) – A disgruntled Patriots fan in Los Angeles sued the NFL and DirecTV in an antitrust class action, claiming they restrain competition by carving the nation into territories and blacking out games.
     Thomas Abrahamian says he does not want to pay “supra-competitive prices” to get Patriots broadcasts in Los Angeles, but he’s forced to do so because of the defendants’ Sherman Act violations. He says the NFL allows team owners to make such “anticompetitive agreements,” restricting competition for the right to televise games.
     “The defendants have accomplished this elimination of competition by agreeing to divide the live-game video presentation market into exclusive territories, which are protected by anti-competitive blackouts. Not only are such agreements not necessary to producing football contests, they are directed at reducing competition in the live-game video presentation market, involving and protecting third parties who operate only in that separate market,” the complaint states.
     Citing the U.S. Supreme Court’s 1953 ruling in United States v National Football League, Abrahamian says sports leagues are subject to antitrust laws and that blackout agreements are an unreasonable and illegal restraint of trade.
     Nonetheless, the NFL has carved up the country into exclusive territories assigned to specific teams and their “televised partners” to create “regional monopolies,” the complaint states.
     Fans who want to watch games for a team outside their territory have to buy the NFL Sunday Ticket package, available only from DirecTV and sold exclusively through the NFL. A season package costs $251.94 this year, according to the complaint.
     Abrahamian says this “illegal monopoly” lets the NFL and DirecTV overcharge for the package and forces fans to pay for all out-of-market games even if they only want to watch games for their own team – in his case, the Patriots.
     Were it not for the defendants’ anticompetitive blackout system, Abrahamian says, fans across the country could watch any live game from any team and business would have to compete for the broadcast rights, resulting in “lower prices and increase[d] choice for consumers.”
     “These ‘exclusive’ agreements and other competitive restrains are not reasonably necessary to maintain a level of competitive balance within the league that fans prefer, or to maintain the viability of franchises. To the extent that competition among teams for television rights would result in revenue disparities that preclude a fan-optimal level of competitive balance, agreements that require revenue sharing, if set at levels that do not restrict output, is an obvious and well-recognized less restrictive alternative,” the complaint states.
     The system also hurts teams by restricting distribution of their games to one network rather than letting them decide what kind of distribution works best for them, the complaint states.
     Abrahamian’s attorney Abbas Kazerounian compared it to buying cheese in a supermarket.
     “Let’s say you want to buy cheddar cheese, but the supermarkets all get together and say, ‘No, you can’t just buy cheddar cheese, you have to buy Gorgonzola, Swiss, and all these other cheeses along with it.’ It’s not fair to the consumer,” Kazerounian said in an interview.
     Football fans are forced to pay a lot of money “to buy a big thing versus the little thing that they actually want,” he said.
     Taking the cheese analogy and running with it, Kazerounian said that just as a pizza restaurant will sell pizza by the slice rather than forcing customers to buy the whole pie, fans want to pay to see the games they want to watch, not be forced to buy access to games they don’t want to watch.
     Asked whether the NFL has antitrust exemptions like those granted to Major League Baseball, Kazerounian said the NFL operates more like the National Hockey League, which until recently imposed local blackouts and required fans to buy a season pass even if they wanted to watch just one team’s games.
     A class action against the NHL alleging similar antitrust allegations was settled recently, with the NHL agreeing to allow fans to buy a single-team stream of their favorite team rather than pay for the entire package.
     The NFL did not immediately return requests for comment.
     DirecTV could not immediately be reached for comment.
     Abrahamian seeks class certification, declaratory judgment that the defendants’ regional monopolies violate the Sherman Act, an injunction, and treble damages.
     Kazerounian’s office is in Costa Mesa.

%d bloggers like this: