## Facts

- Consumers who purchased television packages for live professional hockey and baseball games sued the National Hockey League (NHL), Major League Baseball (MLB), their member clubs, regional sports networks (RSNs), and multichannel video programming distributors (MVPDs) such as Comcast and DirecTV.
- Each NHL and MLB team allegedly owned the initial rights to telecast its games, and most games were telecast under agreements between teams and RSNs.
- RSNs sold game telecasts to consumers through MVPDs, but MVPDs provided telecasts only to consumers located within an RSN’s assigned territory.
- Under standard MVPD programming, consumers generally could watch only local (in-market) games; out-of-market games were subject to blackout restrictions.
- Consumers could also purchase league-wide, out-of-market packages (e.g., NHL Center Ice and MLB Extra Innings) that showed out-of-market games.
- Plaintiffs alleged the out-of-market packages were “all-or-nothing”: consumers could not buy a single out-of-market team’s games or select games à la carte, but instead had to purchase the full out-of-market bundle.
- The out-of-market packages did not include in-market games; plaintiffs alleged that the only way to watch in-market games was through a separate MVPD subscription carrying the local RSN feed.
- Plaintiffs alleged defendants agreed to divide territories for telecasts and to enforce that division through blackout rules and distribution arrangements, eliminating competition among teams and RSNs to sell live-game telecasts to fans outside a team’s home territory.
- Plaintiffs brought federal antitrust claims under the Sherman Act (including Section 1 and Section 2 theories) challenging the territorial restrictions, blackouts, and the structure of the out-of-market packages.
- Defendants jointly moved to dismiss under Rule 12(b)(6), arguing (among other things) that plaintiffs failed to plead an actionable agreement and antitrust injury, and that the Sports Broadcasting Act of 1961 (SBA) and other sports-related doctrines barred the claims.

## Issues

1. Whether plaintiffs plausibly alleged concerted action and an unreasonable restraint of trade under Sherman Act § 1 based on territorial broadcasting restrictions, blackout enforcement, and league-wide out-of-market packages.
2. Whether the challenged conduct should be treated as per se unlawful market allocation or analyzed under the rule of reason at the motion-to-dismiss stage.
3. Whether consumers who purchased MVPD service and/or out-of-market packages plausibly alleged antitrust injury and had standing to sue.
4. Whether the Sports Broadcasting Act of 1961 or other sports-related immunity doctrines barred the claims at the pleading stage.
5. Whether plaintiffs adequately stated Sherman Act § 2 monopolization or conspiracy-to-monopolize claims.

## Decision

- The court granted the motions to dismiss in part and denied them in part.
- The court held plaintiffs plausibly stated Sherman Act § 1 claims challenging the territorial allocation/blackout scheme and the league-wide out-of-market package structure, based on allegations that horizontal competitors agreed not to compete outside assigned territories and restricted consumer options.
- The court declined to resolve, on the pleadings, whether the restraints were per se unlawful or should proceed under a rule-of-reason framework, concluding that the appropriate mode of analysis depended on a fuller factual record.
- The court found plaintiffs plausibly alleged antitrust injury (higher prices, reduced output, and reduced choice in live-game telecasts) and adequately pleaded standing at the dismissal stage.
- The court rejected defendants’ broad immunity arguments at the pleading stage, including reliance on the Sports Broadcasting Act for the cable/satellite and subscription-package distribution at issue.
- The court dismissed certain claims, including at least some Section 2 theories, and allowed the surviving federal antitrust claims to proceed to discovery.

## Legal Principles

- A complaint can state a Sherman Act § 1 claim by plausibly alleging that horizontal competitors agreed to allocate territories and jointly enforce blackout restrictions that limit output and consumer choice in a downstream distribution market.
- At the Rule 12(b)(6) stage, a court may allow a sports-broadcast restraint claim to proceed without finally selecting per se, “quick look,” or full rule-of-reason treatment when the choice depends on facts not suitable for resolution on the pleadings.
- Consumers plausibly plead antitrust injury when they allege that challenged restraints raised prices and limited the availability of the product they purchased (here, live-game telecasts), and such consumers may have standing when the alleged harm is direct.
- The Sports Broadcasting Act’s limited protection for certain pooled broadcasting arrangements does not automatically shield cable/satellite distribution rules or subscription packages from Sherman Act scrutiny.
- Sherman Act § 2 claims require plausible allegations of monopoly power and exclusionary conduct meeting Section 2 standards; pleading deficiencies can warrant dismissal even when related Section 1 claims survive.

## Conclusion

Laumann v. National Hockey League held that consumers plausibly alleged Sherman Act § 1 violations arising from NHL and MLB territorial broadcast restrictions, blackout enforcement, and all-or-nothing out-of-market packages, and that immunity defenses such as the Sports Broadcasting Act did not warrant dismissal at the pleading stage; the court nevertheless dismissed some claims, including certain Section 2 theories, while allowing the core Section 1 case to continue.


Laumann v. National Hockey League, 907 F. Supp. 2d 465 (2012)