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NFL Sunday Ticket — a pricey add-on sports package that offers live access to every out-of-market Sunday afternoon NFL game — is exclusively available through DirecTV, and will remain that way for years to come. But some bar owners allege that the satellite company’s deal with the NFL creates an illegal monopoly.
This is according to a lawsuit [PDF] filed earlier this week against both the NFL and DirecTV in federal court by the owners of a San Francisco bar, The Mucky Duck.
The complaint contends that, by only having one way to purchase access to out-of-market games, DirecTV is able to charge “supracompetitive rates” — upwards of 43% higher than they should be — especially to bar owners who need these games to bring in Sunday afternoon business during the NFL season.
“Every NFL member team owns the initial rights to the broadcast of that team’s games. However, the teams have chosen to collude with each other, and to grant the NFL the exclusive right to market those games outside each team’s home market,” explains the lawsuit. “But for the NFL teams’ agreement in which DirecTV has joined, teams would compete against each other in the market for NFL football programming, which would likely induce more competitive pricing.”
The plaintiffs note that Sunday Ticket is so critical to DirecTV’s business, that when AT&T decided to acquire the satellite company for $49 billion, the deal gave AT&T the right to walk away from the merger if DirecTV didn’t reach a new exclusive contract with the NFL.
“The fact that NFL Sunday Ticket is only available through DirecTV locks commercial subscribers into the DirecTV service throughout the year,” argue the plaintiffs, saying that this arrangement puts other pay-TV providers at a competitive disadvantage, and “as a result, DirecTV can extract monopoly rents for its service.”
Thus, contends the lawsuit, Sunday Ticket purchasers can’t go to lower-cost pay-TV providers for the rest of the year. This is particularly difficult for bars with business accounts through DirecTV.
“A bar or restaurant with a fire code occupancy between 51-100 will pay $2,314.00 for Sunday Ticket in 2015 (in addition to television package subscription charges, high-definition access fees, and other charges),” explain the plaintiffs. “And the price for Sunday Ticket is higher the larger the establishment’s EVO is. The largest establishments— like Nevada hotels—are charged more than $120,000 per year for Sunday Ticket.”
The plaintiffs, who are seeking class-action status for the lawsuit, note that in Canada Sunday Ticket is not exclusive to a single pay-TV provider but is sold through multiple cable companies.
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