It’s been eight days since Judge Philip Gutierrez did the NFL a $14.1 billion favor by throwing out the jury’s verdict in the Sunday Ticket antitrust case. With an appeal inevitable, should the NFL try to settle the case?
Ben Fischer of Sports Business Journal raised that issue in his weekly newsletter, with quotes from Jodi Balsam, a professor at Brooklyn Law School and a former in-house lawyer with the NFL.
Opines Balsam: “The NFL is at a point of maximum settlement leverage. But the plaintiffs are not without leverage, because there’s a really good chance the Ninth Circuit will undo what the District Court judge did. But there’s still significant questions about what, on remand, they could achieve financially. To me, at this point it makes total sense to engage in settlement talks.”
As we explained last week, the outcome at the Ninth Circuit is and will be a crapshoot, until the parties know which three judges will handle the case. If at least two were appointed by Republican presidents, advantage NFL. If at least two were appointed by Democratic president, advantage plaintiffs.
Again, that’s not a political opinion. That’s a political fact.
Is a settlement possible? Sure. Because it’s a class action, any deal would have to be approved by the court. Along the way, the members of the class would have an opportunity to oppose the deal. (Recently, a judge rejected a proposed $353 million settlement of a class action brought against the UFC by fighters.)
So what would the number be? If the appeal is essentially an all-or-nothing gamble (a middle ground for the Ninth Circuit could be to send the case back for a new trial on damages, since the finding of an antitrust violation was essentially upheld by Gutierrez), is it half of $14.1 billion?
There’s a number the plaintiffs wouldn’t be able to refuse to take. There’s a number the NFL wouldn’t be able to refuse to pay. If those numbers overlap, the case would, or should, settle.
That said, there’s another wrinkle that can’t be ignored. The NFL continues to operate Sunday Ticket as it always has — exclusive provider (then DirecTV, now YouTube) sets a price so high that most will choose to watch free games in their local markets on CBS and Fox, even if they’d rather watch out-of-market games. Part of the settlement should include an agreement by the NFL to change how it distributes and prices Sunday Ticket.
That’s where things can become dicey for the plaintiffs. Would a judge approve a massive payment, 40 percent of which (or so) would go to the lawyers, without an agreement as to the pricing of Sunday Ticket going forward?
The smartest play for both sides would be to find a former judge who would serve as a mediator, pushing the two sides toward a deal that both find equally unacceptable. (That’s when you know it’s a good deal.) And, even if the lawyers wouldn’t get any of the savings moving forward, one major aspect of any settlement effort should be to get the NFL to overhaul Sunday Ticket, making it much cheaper and more readily available for consumers.
Absent a settlement, one side is guaranteed to win big — and one side is guaranteed to lose big. The fundamental question for both sides is simple.
