With Judge Philip Gutierrez gutting the Sunday Ticket verdict and belatedly throwing the case out of court, the plaintiffs definitely will appeal the decision to the U.S. Court of Appeals for the Ninth Circuit.
So what happens next? It really is a crapshoot.
The Ninth Circuit currently has 29 judges. Three of them will be assigned to handle the appeal. Until we know the three judges, it becomes impossible to even try to begin to predict the outcome.
Some judges might be inclined to uphold Gutierrez’s decision. Some might be inclined to overturn it. More than any other factor, the composition of that three-judge panel will determine the case.
I’ve argued cases before the Fourth Circuit, in Richmond. There (and it’s been a while so it possibly has changed), the lawyers didn’t know the names of the judges until they showed up for the hearing, after all briefs and related paperwork were submitted.
Some judges will have a history of making pro-business rulings. Some judges will have a history of making pro-consumer rulings. That tendency is often revealed by the party of the president who appointed the judge.
The split for the 29 active circuit judges is 16-13, Democrat. For the 23 senior-status judges on the Ninth Circuit, it’s 14-9, Democrat.
The appeal will take a year or so to resolve. The case could be sent back for a new trial on damages, the $4.7 billion verdict could be reinstated, or the judge’s decision to throw the case out could be upheld.
Already, the Ninth Circuit has overturned a decision to throw the case out before the litigation even got going.
Of course, before anything would become final, whoever loses at this level will seek a rehearing and/or a decision from the full court and, inevitably, a petition to the Supreme Court.
Cowboys owner Jerry Jones testified at the trial of the Sunday Ticket class action. His appearance didn’t help the league avoid a $4.7 billion verdict and a potential $14.1 billion judgment.
The presiding judge on Thursday gave the NFL a pass for the full amount, finding that the jury properly found that Sunday Ticket package violates federal antitrust laws — but that the plaintiffs failed to introduce reliable expert witness testimony regarding the financial harm caused by 12 years of deliberate and concerted overcharging for out-of-market games.
Jones is obviously happy that he won’t have to write a check for $440 million, which would have been his 1/32nd share of the final amount.
“Well, we were pleased that we made our presentation to the judge and are pleased with his ruling,” Jones said Friday, via Calvin Watkins of the Dallas Morning News. “And we’ll go from there. I won’t be saying anything more about it.”
I’m not sure of many things. I’m sure that Jones will inevitably say something more about it.
While things can change on appeal, Jones seized last weekend on the looming liability as a reason for not paying his players. Now that the $14.1 billion has been erased, he should be able to assume the salary cap will keep soaring and the money will keep flowing, right?
Wrong. He’ll find another reason to drag his feet and to lowball his players before ultimately saying matae and writing the check regarding players like receiver CeeDee Lamb (who’s holding out) and linebacker Micah Parsons (who should be). Or, in the case of quarterback Dak Prescott, watching him leave next with as an unrestricted and unfettered free agent.
Civil trials can have two kinds of witnesses: (1) fact witnesses, who talk about events relevant to the controversy; and (2) expert witnesses, who offer relevant opinions based on their education, training, and experience.
The plaintiffs in the Sunday Ticket class action had their $4.7 billion verdict (and $14.1 billion judgment) thrown out on Thursday because Judge Philip Gutierrez decided the opinions provided by the plaintiffs’ expert witnesses regarding financial damages were not reliable.
That’s what happened, in the simplest possible nutshell. The judge, who knew what the experts would say and allowed them to say it, threw out the expert testimony after the jury issued its verdict.
So why let them testify in the first place? Why waste everyone’s time (including the jury’s) by conducting a four-week trial if the judge believed the opinions of the expert witnesses were insufficient?
The challenge in any antitrust case is to take the real-world expenses arising from antitrust violations and conjure a hypothetical world in which the antitrust violations didn’t happen. It’s not going to be easy to do, especially when (as in this case) the NFL didn’t offer its own but-for world but instead fought aggressively against anything/everything the plaintiffs suggested.
Dr. Daniel Rascher, one of the expert witnesses whose testimony was allowed until it wasn’t, crafted a model based on the NFL ditching Sunday Ticket and selling the out-of-market games to various networks that would broadcast the feeds from CBS and Fox.
It’s a simple concept. In each market, CBS and Fox would deliver the games that they always have. Steelers in Pittsburgh. Packers in Milwaukee. Falcons in Atlanta. Dolphins in Miami. Etc. Etc. Then, in each market, the other games would be delivered through a collection of networks and/or cable channels — NBC, ABC, ESPN, ESPN2, FS1, USA, NFL Network, and/or TNT.
The end result could have taken that form, or others. Ultimately, it would have been up to the NFL and the broadcast partners to figure out a world that didn’t violate antitrust laws.
How could anyone know what the NFL would do if it couldn’t sell Sunday Ticket in its current form? In this case, the plaintiffs tried to prove what a world without antitrust violations would have looked like. And the judge was either unwilling or unable to comprehend that, without Sunday Ticket, the NFL might have come up with a no-extra-charge distribution of games on up to nine or 10 different networks at 1:00 p.m. ET. Or maybe the league would have decided to start Sundays with a game at noon and another at 12:30 p.m. ET and another one every half hour, rolling throughout the day and allowing fans to watch any, some, or all of each game.
Judges often solve the maze of facts and law in a given case by picking a preferred destination and working backward. Here, it’s clear that the judge didn’t want the plaintiffs to prevail. But he didn’t throw the case out before the verdict, because he thought the jury might save him from having to do so. After the verdict was returned, he had no choice. To get to where he wanted to go, he had to throw out the entire case.
The flaws in the judge’s thinking are peppered throughout his 16-page opinion. For example, at footnote 6 on page 7, he writes that “Dr. Rascher’s solutions were contradicted by the record. Sean McManus, President of CBS, testified that CBS would not share its feeds with competitors . . . or let those networks ‘advertise however they wanted’ with their feeds.” That testimony from McManus was purely speculative and self-serving. If the NFL told CBS that, in order to televise in-market games in more than 200 markets throughout the country, it would have to share out-of-market feeds with other networks, CBS would piss and moan but ultimately do it. We know that because that’s what CBS has done with Sunday Ticket, ever since CBS returned to the NFL broadcast fold in 1998.
CBS hates Sunday Ticket. CBS wishes Sunday Ticket would die. And CBS tolerates the existence of Sunday Ticket, giving DirecTV (and now YouTube) the CBS feeds.
But Judge Gutierrez accepted the hypothetical contention of an executive who doesn’t even work at CBS any longer as gospel truth. To use a technical legal term, that’s bullshit.
Remember, the judge didn’t find that the jury improperly concluded that Sunday Ticket violates the antitrust laws. He specifically found that there was enough evidence to justify the verdict as to the issue of liability. He threw the verdict out because he determined that the expert witnesses he allowed to testify weren’t reliable.
And so millions of consumers who paid too much for Sunday Ticket (like me and maybe like you) are left with a finding that it violated the antitrust laws but with no way to obtain compensation for 12 years covered by the class, because the judge decided that the expert witness testimony was insufficient — after he decided that it good enough.
It makes no sense. None of it. And given the news that the judge is retiring in October, he’s arguably not concerned about the case being reversed and remanded for a new trial on damages. It won’t be for him to clean up the mess, if/when an appeals court sends the case back — as the appeals court already has done, after another judge dismissed the entire case.
Philip Gutierrez is leaving with a flourish.
The judge who presided over the Sunday Ticket trial — and who transferred $14.1 billion from the plaintiffs to the NFL in one fell swoop on Thursday — is retiring in October 2024, via Alex Schiffer of FrontOfficeSports.com.
“On October 15, 2024, I intend to retire from regular active service,” Gutierrez wrote in a letter to President Joe Biden in January 2024. “It is my intention to continue to render substantial judicial service as a senior judge.”
Gutierrez served as an L.A. County Superior Court judge from 1997 through 2007. He was appointed to the federal bench by President George W. Bush in 2007. The appointment wouldn’t have happened absent a track record suggesting that his decisions will mesh with the overall Republican, which disfavors public or private regulation of big business. (That’s not a political opinion; it’s an undeniable fact.)
Gutierrez turns 65 two days before his retirement. By rule, that qualifies him for his full current salary in retirement. Nationwide, senior-status judges handle roughly 15 percent of the total workload of the federal courts. It’s voluntary, since the senior-status judge gets his or her full salary anyway.
Meanwhile, the NFL is still looking for a new general counsel.
I’m kidding about the last part. I think.
In Judge Philip Gutierrez transferring $14.1 billion with the stroke of a pen, many around the NFL breathed a deep sigh of relief.
The prospect of each team coming up with $440 million to satisfy the verdict would have had widespread ramifications. (And, obviously, it still could, if the plaintiffs prevail on appeal.)
In the weeks after the $4.7 billion verdict was returned (by law, it would have been tripled), folks throughout the league’s overall infrastructure were realizing that paying it off wouldn’t be as simple as every owner writing a giant check and moving on. Even if there would have been no direct impact on the salary cap (and some owners were already plotting to spread the pain to players), plenty of teams would have been spending less.
For example, Packers quarterback Jordan Love will make, in all, $79 million this year under his new contract. That kind of cash flow would not happen in any year in which the Packers would have had to surrender $440 million for Sunday Ticket liability.
Likewise, there’s a salary cap and a salary floor. More teams would be congregating at the floor, if/when they have to pay the out-of-market piper.
Belts would be tightened elsewhere. Coaches would be paid less. Executives would be paid less. Other non-player employees would be paid less. Layoffs would happen. Even though the owners were responsible for the antitrust violation, they would have found a way to spread the consequences as broadly as possible. That’s just the way business works.
Thursday’s ruling doesn’t mean everything goes back to normal. Until the case is completely and totally over, the possibility of eventually having to pay the money looms. But the league has pivoted in one fell swoop from a position of extreme weakness to a position of extreme strength.
In turn, the plaintiffs are now in a position of extreme weakness. Even though the jury properly found (per the judge) that the Sunday Ticket distribution and pricing violates federal antitrust laws, those who purchased it from 2011 through 2022 will get nothing and like it, barring a successful appeal.
The biggest question is whether anything will change, when it comes to the availability and pricing of Sunday Ticket. Will out-of-market games still be exclusive to YouTube, or whoever buys the Sunday Ticket package in the future? Will the price go down? Will a single-team option be available?
And, ultimately, will every game be available as part of a basic package of network and cable channels? Judge Gutierrez seems to be unable or unwilling to comprehend the basic reality that, if the NFL had to get rid of Sunday Ticket, it would come up with another way to distribute out of market games.
The best way to maximize viewership — and potentially revenue — could be to sell the national home-team packages to CBS and Fox and to sell the rights to the out-of-market games to other networks, from NBC to ABC to ESPN to FS1 to USA, allowing all fans to watch any games they want. Without paying more than $400 per year. Without paying anything more than what they already pay for their cable/satellite/streaming block of options.
To date, the league has opted to restrict out-of-market games to the Sunday Ticket package. If the NFL was forced to disband Sunday Ticket, it would come up with something else. While we’ll have more to say about the decision, Gutierrez decided that he didn’t like the “something else” that the plaintiffs presented through a pair of expert witnesses.
And so, even though Sunday Ticket violates antitrust laws — and even though the jury pegged the damages at $4.7 billion — the judge decided to give the NFL a free pass for past violations. It remains to be seen what that means for the future.
It has to mean something. It’s impossible to think that the Sunday Ticket package violates antitrust law, but that it’s fine for the NFL to do it because judges will continuously reject any effort to conjure a world without it. The easiest solution would be to tell the NFL to disband Sunday Ticket in its current form, and to let nature take its course.
The Sunday Ticket plaintiffs won’t be getting a mulligan on damages, at least not for now. Thursday’s order from Judge Philip Gutierrez ends the case, subject to appeals.
In the 16-page ruling, Judge Gutierrez explains that the plaintiffs’ economic experts failed to provide sufficiently reliable testimony on the world that would have existed but for the NFL’s antitrust violation. (We’ll have plenty more to say about the judge’s rejection of the expert testimony. Without any suitable evidence of economic harm to the class, there was no proven economic harm to the class.
Despite his hostility to the plaintiffs’ case on damages, Judge Gutierrez had no qualms with the jury’s finding that an antitrust violation occurred.
From the order: “Despite finding Dr. Rascher’s and Dr. Zona’s opinions unreliable, the Court does not find that it would be unreasonable for a juror to find that there was a conspiracy that unreasonably restrained trade. . . . There was evidence in the record—even without the testimonies of Dr. Rascher and Dr. Zona—to support a reasonable jury’s finding of an unreasonable restraint of trade at each step of the rule of reason. . . . Given a reasonable jury could find that there were anticompetitive effects, that Defendants’ procompetitive justifications were pretextual or unrelated to the restraints, and/or that there were less-restrictive alternatives based on the record, judgment as a matter of law is inappropriate on these grounds.”
In other words, the judge upheld the finding that Sunday Ticket, as constructed, violates federal antitrust laws. So why not issue an order disbanding it?
For now, the reality is that Judge Gutierrez has blocked more than 2.4 million residential customers from receiving a partial refund for the money they paid for an out-of-market package that was deliberately overpriced in order to encourage people to not buy it, and to watch in-market games on CBS and Fox instead.
Again, we’ll have more to say about the judge’s rejection of the damages case. Either he’s wrong or the plaintiffs’ lawyers screwed up the case.
Either way, the consumers who paid too much for Sunday Ticket have lost.
And the NFL has won.
The NFL has snatched legal victory from the $14.1 billion jaws of defeat, thanks to a ruling by Judge Philip Gutierrez.
On Thursday night, the NFL issued a statement acknowledging the decision to overturn the verdict.
“We are grateful for today’s ruling in the Sunday Ticket class action lawsuit,” the league said in a statement. “We believe that the NFL’s media distribution model provides our fans with an array of options to follow the game they love, including local broadcasts of every single game on free over-the-air television. We thank Judge Gutierrez for his time and attention to this case and look forward to an exciting 2024 NFL season.”
The case won’t end. The ruling will be appealed. Previously, a judge threw out the entire case, and the U.S. Court of Appeals for the Ninth Circuit reinstated it.
There’s also the question of whether the finding of an antitrust violation arising from the pricing and distribution of Sunday Ticket will stand. We have the order, and we’ll scour it for information and other clues.
The jury giveth. The judge taketh away.
Per multiple reports, Judge Philip Gutierrez has overturned the $4.7 billion verdict against the NFL in the Sunday Ticket antitrust class action. The ruling comes one day after a three-hour hearing on the NFL’s attack on the jury’s decision.
The verdict, if upheld, would have automatically become a $14.1 billion judgment.
Via Eriq Gardner of Puck, the judge found the plaintiffs’ economic experts to be unreliable, and the jury’s award to be based not on the evidence and reasonable inferences but guesswork or speculation.
We’ve asked both sides for comment, and we’re trying to get our eyes on the official order. There seemed to be more than enough evidence to support a finding of an antitrust violation. The problem seemed to be damages.
That could mean a new trial or it could mean a $1 verdict.
Regardless, the case is destined to continue to churn through the court system. Far too much money is at stake.
We’ll have more once we get more. The official order will have plenty of clues as to what it means, and as to what comes next.
The NFL’s owners typically meet four times per year. Sometimes, they have special meetings.
The issue of private equity has suddenly become sufficiently special.
Ben Fischer of Sports Business Journal reports that Commissioner Roger Goodell has asked the 32 owners to set aside Tuesday, August 27 for a potential league meeting on the long-expected rule to allow teams to sell a portion of the franchise to private-equity funds.
The meeting will happen if the committee formed to address the issue finishes its policy. For now, the Commissioner wants the owners to be ready to meet.
It’s expected that teams would be allowed to sell up to 10 percent to a private-equity fund. Plenty of other details need to be worked out, including the approved funds and whether funds would be allowed to acquire equity in multiple teams.
Last month, Goodell didn’t rule out the possibility of the 10-percent ceiling potentially moving higher.
The owners currently are due to meet in October, roughly six weeks after the planned special meeting. So why the rush?
It would be foolish to not at least consider the possibility that a sense of urgency has been created by a certain pending liability of $14.1 billion from the Sunday Ticket case, which if upheld would cost each team roughly $440 million each. For the owners who can’t just snap their fingers and manifest the money, selling a slice of the team could be the key to raising the cash.
And even though the reckoning could be several years away, it makes sense to start the rainy-day fund for the potentially coming monsoon.
With a jury finding in late July that the NFL’s Sunday Ticket package as currently constituted violates antitrust law, a major question remains unanswered.
Will the NFL make changes to Sunday Ticket, given the $4.7 billion verdict?
Per a source with knowledge of the situation, the NFL anticipates making no changes.
That strategy carries significant risk. The class action covers 2011 through 2022. Already, the league has exposure for 2023, the first season of the shift from DirecTV to YouTube. It will now risk further liability in 2024 and beyond. By the time the appeals process concludes, the league might have three or four (or maybe even five) more years of refunds to eventually make.
The NFL also could guess right. If the league ultimately wins the case via the trial court judge or the two levels of available appeals, the status quo will be validated.
There’s another potential development that could occur. Even if Judge Philip Gutierrez overturns the damages award or orders a new trial on damages, it’s hard to imagine (based on our review of the full trial transcript) that he will scrap the finding of an antitrust violation. One of his biggest complaints during the case was that the basic theory was simple and clear — the NFL banded together to sell the out-of-market games in a way that protected the CBS and Fox audiences for in-market games.
As he said in court on June 18, 2024, “I thought, you know, going into this, you might have had the edge because, again, that’s an easy story to tell: I’m a poor Seattle Seahawks fan in Los Angeles and I’ve got to pay more.”
If Judge Gutierrez upholds the finding of an antitrust violation, he could issue a court order disbanding the current Sunday Ticket structure. That would prompt, presumably, expedited appeals to undo the court order. However, if he opts for what’s known as injunctive relief, there will be a court order requiring the NFL to stop selling Sunday Ticket the way it has sold Sunday Ticket since its inception in 1994.
At trial, the NFL used “chaos” as the primary response to any and all potential alternatives to its longstanding out-of-market product. Chaos will be more than a talking point if Judge Gutierrez issues an order between now and Week 1 telling the NFL to pull the plug on Sunday Ticket, in its current form.