Perhaps under-covered in the grand scheme of NFL media reporting is the league’s federal antitrust exemption, which affords the NFL certain special treatment when it sells its media rights inventory to broadcasters.
The logic of the exemption goes like this: the product the NFL is selling is competition. Thus, rather than having each of the league’s 32 franchises sell its media rights inventory individually, the league needs to sell this inventory collectively and share the revenue evenly to maintain a competitive balance on the field. By this logic, the NFL insists that restricting competition between individual franchises in the market for media rights is a prerequisite to the league’s viability.
In other words, allowing the Dallas Cowboys to sell their media rights for exponentially more than the Cincinnati Bengals would directly threaten the league’s on-field product, which is competitive, entertaining games.
The league has operated under this premise for decades.
Still, the exemption has been questioned recently after a jury found the NFL liable for significant financial damages centered around how the league sold its Sunday Ticket package to DirecTV from 2011-2022.
That case is currently in an appeals process. But one prominent NFL voice recently suggested that the league should see antitrust litigation as a real threat to its future.
Appearing on The Varsity podcast with John Ourand, NBC Sports’ Mike Florio, who spent nearly two decades practicing law, opined on the Sunday Ticket case, and what a possible worst-case scenario could look like for the NFL from an antitrust perspective.
“There’s no compelling argument against the jury’s finding that the Sunday Ticket product and the way the NFL markets it and the way that they want it to be priced in order to protect Sunday afternoon on CBS and Fox, that that was a clear antitrust violation,” Florio began. “So they’ve got future potential antitrust liability. You could argue Sunday Ticket, and I don’t think it’s a tough argument to make, the liability continues every year until they try and change the [Sunday Ticket] model.
“That Sunday Ticket antitrust case, I think, really is stronger than people realize,” Florio continued, “because the whole thing is marketed as, ‘Hey, if you live in Pittsburgh and you want to watch Bears games, this is the way to do it.’ ‘Okay, so how do I just get the Bears games?’ ‘Oh no, you can’t. You gotta buy the whole thing for the entire season…and we’re going to jack up the price because CBS and Fox really don’t want you to do it. They want you to just watch whatever games are served up in the local market.’ They market the whole thing as a way to do something that, it’s extremely expensive to do, and you could argue can and should be a lot cheaper.”
“It sounds to me that you think this is a real, living concern for the NFL,” Ourand suggested.
“How could it not be?” Florio answered. “On liability, they lost. …The jury found the NFL is liable. The Sunday Ticket package is a clear, and plain, and obvious antitrust violation going forward, and they’re just waiting for the reckoning. And maybe they think they’ll get lucky and nobody will ever come up with a measure of damages that’ll pass muster, I don’t know. But I think it’s very real.
“We’re conditioned to think that the NFL is one big happy family, the reality is…they’re 32 different businesses,” he continued. “And but for the places where they have an antitrust exemption, broadcast and also…they get labor antitrust exemption. Beyond that, they’re no different than Burger King, McDonald’s, Jersey Mike’s, Subway. There are all these different businesses that are supposed to be competing. When they come together and act collectively, that’s a problem.”
Ourand then outlined a “worst-case scenario” in which teams like the Cowboys would sell their rights individually, while teams like the Jacksonville Jaguars would become “have-nots.”
“That’s what would happen,” Florio replied. “It would implode the current model. …If they had to break it all up, could you imagine the land rush for all the Cowboys’ home games? Every NFL team would be like Notre Dame at that point; you got your own deal with your own network for your home games. And the Cowboys are going to be at one end, and I’m sorry, Jaguars fans, you know it’s true, the Jaguars would be on the other end. And how massive the divide would be between the Cowboys and the Jaguars. …It would blow up everything,” Florio concluded.
While it seems unlikely that things would ever reach this point, it would really only take one administration’s Justice Department to take an outsized interest in the NFL’s current exemptions to “blow up everything,” as Mike Florio put it. It shows just how much the NFL operates on a razor’s edge. Without the Sports Broadcasting Act of 1961, which gave the NFL its broadcast exemptions, the league’s media situation as we know it would be entirely different, for better or worse.
If the federal government starts questioning these longstanding exemptions, whether the league can continue to operate under them could be a major story.