MANHATTAN (CN) – Whether they watched online or on their big screen, sports fans claiming that the packages they bought violate antitrust law should proceed as class actions, a federal judge ruled Thursday.
U.S. District Judge Shira Scheindlin issued decision for two class actions involving different sports, but the same idea.
Thomas Laumann is the lead plaintiff in the class action against the National Hockey League, while Marc Lerner is the lead plaintiff taking on Major League Baseball.
Both cases allege that the leagues and various regional sports networks conspired with distributors like DirecTV and Comcast to limit options and increase prices for fans who must buy a special cable or Internet package to see games outside of their home television territories.
Under the current system, a Yankees fan in Brooklyn would have to purchase the YES Network to watch local games, whereas a Yankees fan in Iowa would have to purchase an out-of-market package that would include all baseball games.
Most out-of-market games are available only via national broadcasts, or through the out-of-market packages sold through Comcast and DirectTV.
The leagues meanwhile contend that it is the profits from these agreements that allow them and networks to broadcast their games in the first place.
Contending that some of the plaintiffs could be worse off without the exclusivity agreements, the leagues said that a hypothetical Yankees fan in Iowa would no longer have any option to purchase an out-of-market package to watch the Yankees, or the package would cost more.
The leagues wanted Scheindlin to deny class certification on the basis of this predicament, contending that it proves that the class members are not similarly situated.
Scheindlin found Thursday, however, that this “winners and losers” argument is too broadly worded.
“There is no question that here, a common injury exists in the form of diminished consumer choice,” the 66-page opinion states. “It is possible … that many fans would have preferred that the instant lawsuit not be brought. But the fundamental point remains. The restraints are either illegal or they are not.”
Scheindlin likewise concluded that the winners and losers argument “threatens the integrity of the antitrust laws.”
“If the fact that illegal restraints operate to the economic advantage of certain class members were enough to defeat certification, the efficacy of class-wide antitrust suits – and the deterrence function they serve – would wither,” she wrote.
The leagues also failed to sway Scheindlin with claims that many sports fans no longer subscribed to out-of-market packages, and therefore shouldn’t be considered “consumers in the relevant market” for the purpose of a class-action lawsuit.
“Short of death, cognitive illness, or a complete loss of interest in baseball and hockey, previous subscribers” should be added to the class, the ruling states.
In a separate opinion Thursday that dealt some bad news to the plaintiffs, Scheindlin threw out their proposed damages model.
Attorneys for the defendants and plaintiffs could not be reached for comment.
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