As some of you have noticed (and, fortunately, only a few of you have complained), I took a brief pause in the review of the 2,506-page transcript of the Sunday Ticket trial. The past three days have entailed plenty of car time, culminating in a nine-hour drive to an undisclosed location in one of the Carolinas for the annual family beach trip.
But I continued to read when I could, with 408 pages now fully scoured. (That’s 16.28 percent of the whole thing. Which leaves 83.72 percent.)
We started with a look at jury selection and then opening statements. The first witness called to the stand by the plaintiffs was former NFL Network chief Steve Bornstein.
Although the plaintiffs called him, he wasn’t cooperating with them as some sort of disgruntled former Big Shield employee. The plaintiffs used Bornstein as an adverse witness; he admitted early on that he met with the lawyers for the NFL to prepare to testify. (That’s not improper, but it shows the lingering connection and potential bias for one of the parties to a trial.)
The plaintiffs primarily hoped to establish through Bornstein’s testimony that the NFL continued to control pricing of Sunday Ticket even after it gave DirecTV, ostensibly, the power to control pricing.
After Bornstein was hired, the DirecTV relationship shifted from “agency” to “licensing.” Previously, the NFL controlled everything, including pricing and marketing. Although Bornstein wasn’t specifically aware of the term, the agency model apparently required DirecTV to indemnify (fancy word for “protect”) the league for any antitrust liability arising from an arrangement that entailed the league’s 32 teams directly controlling the pricing of an out-of-market offering via satellite to its fans.
The plaintiffs made it clear through Bornstein’s testimony that CBS and Fox didn’t like Sunday Ticket, and that they wanted to minimize the number of fans who purchased it.
“I think they both would have wished Sunday Ticket went away, but Sunday Ticket was a fact of life, they didn’t want to see it broadly distributed,” Bornstein said.
The reason was obvious. Sunday Ticket threatened the CBS and Fox ratings.
“We always wanted -- and it was always a concern of CBS and FOX to keep it behind a subscription wall so that it would not be broadly distributed and potentially harm their ratings performance,” Bornstein said. “That was always their concern. That was the concern of taking their products, you know, the games they produced and distribute them up against them. They were fanatical about that having a negative impact and they would do anything to protect that.”
They were fanatical.
That speaks directly to the heart of the case. Bornstein said on multiple occasions during his two-day testimony that the league tries to keep all partners happy. In this case, the league was caught between one partner that pays billions for Sunday Ticket and two other partners that pay considerably more billions for over-the-air broadcasts in local markets.
The liability (as imposed by the jury) arose from the notion that the league’s broadcast antitrust exemption doesn’t apply to, as in this case, the league’s effort to sell out-of-market rights on a collective basis. Thus, by ensuring that DirecTV kept the price high (even when, on paper, it had the right to price the package however it wanted), the NFL committed an antitrust violation.
It didn’t require 2,506 pages of trial proceedings to prove this, frankly. And, yes, I’m saying that because I really don’t want to read another 2,098 pages.