Fans suing MLB, NHL over sports blackouts win class-action status

NFL and NBA next? I freaking hope so...

Fans suing MLB, NHL over sports blackouts win class-action status
Regional viewing restrictions reduce choice, raise prices, fans allege.

by Jon Brodkin - May 15, 2015 12:38pm CDT

Like its baseball counterpart, NHL GameCenter Live only shows out-of-market games.

NHLSports fans who sued baseball and hockey leagues for limiting access to live games through exclusive contracts and regional blackouts will be able to make their case in a class action.

US District Court of New York Judge Shira Scheindlin yesterday granted the fans' request for class-action certification, allowing them to continue their case collectively instead of as individuals. In addition to the National Hockey League (NHL) and the Major League Baseball (MLB) commissioner's office, defendants include Comcast, DirecTV, and several teams.

The complaint, filed in 2012, centers on contracts between the leagues and TV providers, which include territorial restrictions that reduce the choices fans have for watching their favorite teams. Fans within a home team's geographic region must buy a traditional TV package with a regional sports network (RSN) to watch the team's games, because leaguewide packages available through TV providers or over the Internet only show out-of-market games. Fans outside their favorite team's territory can only watch the games by buying out-of-market packages, since the RSNs are restricted to local territories.

Plaintiffs allege that the contracts "limit options, and increase prices, for baseball and hockey fans who want to watch teams from outside the home television territory ('HTT') where the fans live," Scheindlin wrote. The judge's description of the allegations continued as follows:

According to plaintiffs, defendants’ multilateral agreements impose conditions of “territorial exclusivity” that restrain individual teams and RSNs—such as the Yankees Entertainment Sports Network (“YES Network”)—from selling their content directly to fans outside the HTT (in the Yankees’ case, New York and New Jersey). According to plaintiffs, the ultimate consequence of this arrangement is that a Yankees fan living in Iowa who wants full access to a season’s worth of Yankees games has to buy an “out-of-market package” (“OMP”)—a bundle of all out-of-market games, from every team—instead of simply buying the YES Network. In plaintiffs’ view, this restraint is unnatural and anticompetitive. In its absence, RSNs would distribute their content nationwide in a la carte form, and an Iowa-based Yankees fan (for instance) would be able to choose between (1) buying the YES Network by itself, or (2) buying an OMP. Furthermore, the competition between these options would also push the price of the OMP down. For the Yankees fan in Iowa, therefore, the “but-for world” (“BFW”)—the world without the complained-of restraints—would involve two distinct but mutually reinforcing benefits. First, out-of-market fans would have more options for watching the games of their preferred teams. Second, all fans, whether they primarily follow their home teams or out-of-market teams, would be able to pay less for the OMP.​

MLB and the NHL argued that the plaintiffs can't be treated as a class because eliminating the territorial restrictions "would be favorable to some consumers and detrimental to others" and that many members of the putative class have no standing because they no longer subscribe to out-of-market packages, Scheindlin wrote. The judge rejected these arguments.

"Here, every class member has suffered an injury, because every class member, as a consumer in the market for baseball or hockey broadcasting, has been deprived of an option—a la carte channels—that would have been available absent the territorial restraints," Scheindlin wrote. "On top of this general injury, certain class members have also suffered the additional injury of having to pay too much for the content they wanted."

It wasn't all good news for the sports fans. In a separate decision issued yesterday, Scheindlin granted a motion by the defendants to exclude a damages calculation that the leagues argued suffered from numerous methodological flaws. "As a result, plaintiffs cannot prove their damages case on a class-wide basis," she wrote. However, previous cases have established that "the fact that damages may have to be ascertained on an individual basis is not sufficient to defeat class certification." The class action can still seek "Injunctive relief," i.e. changes to the leagues' behavior that would benefit fans.