## Facts

- Residential and commercial subscribers to DirecTV’s “NFL Sunday Ticket” sued the NFL, related NFL entities, and the 32 member clubs, along with DirecTV, challenging the league’s distribution of live, out-of-market regular-season NFL games.
- The suits were consolidated in the Central District of California as multidistrict litigation (MDL No. 2668).
- Plaintiffs alleged that the clubs, acting through the NFL and NFL Enterprises, pooled each club’s rights to televise games and agreed not to compete with one another in licensing live telecasts of their games for viewing outside each club’s “home territory.”
- According to the complaints, instead of allowing clubs (or independent distributors) to offer individual games or smaller packages to out-of-market viewers, defendants made out-of-market live game telecasts available primarily through a single league-wide package.
- Plaintiffs alleged that the NFL (through its licensing structure) granted DirecTV exclusive distribution rights to the out-of-market package, and that DirecTV sold it to consumers and commercial establishments at supracompetitive prices.
- Plaintiffs claimed the arrangement reduced output and consumer choice by limiting how, where, and in what form out-of-market live games could be purchased (e.g., preventing competing distributors from offering substitute packages and preventing teams from selling directly).
- Defendants sought dismissal under Rule 12(b)(6), arguing among other things that the Sports Broadcasting Act of 1961 (SBA) shielded the challenged conduct and that plaintiffs failed to plead viable Sherman Act § 1 and § 2 claims, including market definition and antitrust injury.
- The district court dismissed the consolidated complaints; plaintiffs appealed.

## Issues

1. Whether plaintiffs plausibly alleged a Sherman Act § 1 conspiracy among NFL member clubs (and related NFL entities), together with related vertical agreements with DirecTV, restraining trade in the sale of out-of-market live NFL game telecasts.
2. Whether the Sports Broadcasting Act’s limited exemption for joint agreements related to “sponsored telecasting” barred the claims at the pleading stage.
3. Whether plaintiffs plausibly alleged relevant product and geographic markets and antitrust injury based on reduced output/choice and higher prices for out-of-market live telecasts.
4. Whether plaintiffs plausibly stated Sherman Act § 2 claims (monopolization/attempted monopolization) based on alleged control of, and exclusive dealing in, a market for out-of-market live NFL game broadcasts.

## Decision

- The Ninth Circuit reversed the Rule 12(b)(6) dismissal in substantial part and remanded for further proceedings.
- The court held plaintiffs plausibly alleged a horizontal agreement among the clubs not to compete in selling live telecasts of their games to out-of-market viewers, implemented through pooled licensing, along with an exclusive vertical distribution arrangement with DirecTV.
- The court rejected dismissal based on the Sports Broadcasting Act at the pleading stage, concluding the SBA did not clearly immunize the challenged scheme as alleged, particularly as to out-of-market, pay-television/package distribution rather than “sponsored telecasting.”
- The court held plaintiffs plausibly pleaded anticompetitive effects and antitrust injury by alleging that defendants’ agreements restricted output and alternative avenues of distribution and resulted in supracompetitive prices for Sunday Ticket.
- The court also allowed plaintiffs’ Sherman Act § 2 theories to proceed at the pleading stage, finding the allegations of exclusive control over out-of-market live telecasts and foreclosure of rivals sufficient to state plausible claims.

## Legal Principles

- On a Rule 12(b)(6) motion, antitrust plaintiffs must plead enough facts to make a § 1 or § 2 claim plausible; courts generally do not resolve fact-bound justifications or competitive effects disputes on the pleadings.
- A coordinated licensing structure can be attacked under § 1 where plaintiffs plausibly allege that separate economic actors agreed not to compete and instead centralized sales in a way that restricts output or raises price.
- Horizontal restraints (among competing teams) and vertical restraints (exclusive distribution with a single provider) may be evaluated together where the complaint plausibly alleges they operate as one scheme affecting the same market.
- The Sports Broadcasting Act provides a limited antitrust exemption tied to joint agreements for “sponsored telecasting” of professional sports; it does not automatically bar challenges to out-of-market package arrangements or other conduct outside its terms based solely on the existence of league-wide broadcasting agreements.
- Antitrust injury can be plausibly alleged by consumers who claim they paid higher prices and faced reduced choices because the challenged agreements foreclosed alternative sellers or alternative product forms (such as individual-game sales or competing packages).
- For § 2 claims at the pleading stage, allegations that defendants collectively control a market and use exclusivity and foreclosure to maintain that control can suffice to plead monopoly power and exclusionary conduct, subject to proof later.

## Conclusion

The Ninth Circuit held that Sunday Ticket subscribers plausibly alleged that NFL clubs, acting through league-wide pooled licensing and an exclusive deal with DirecTV, restrained competition and maintained monopoly power in a market for live, out-of-market NFL game telecasts; it therefore reversed the district court’s pleading-stage dismissal in substantial part and remanded, rejecting a categorical Sports Broadcasting Act defense on the allegations presented.


In re National Football League’s “Sunday Ticket” Antitrust Litigation, 933 F.3d 1136 (9th Cir. 2019)