Even in the era of a Federal Trade Commission (FTC) led by Lina Khan, antitrust law can be a pretty hum-drum affair, consumed with minutiae about relevant markets, market shares, the Herfindahl-Hirschman Index (HHI), unilateral effects, coordinated effects, and possible efficiencies. Things get just a bit more interesting when there are allegations of a conspiracy to restrict output and raise prices.
Then, there are the once-in-a-lifetime cases that turn knobs all the way up to 11. And that’s the recent National Football League (NFL) “Sunday Ticket” litigation. Plaintiffs were a class of DirecTV “NFL Sunday Ticket” subscribers who claimed NFL teams colluded with broadcasters to suppress the availability of out-of-market NFL game telecasts, driving up the price paid for Sunday Ticket. After a three-week trial, the jury came back with an eye-popping $4.7 billion award against the NFL that could have been trebled to more than $14 billion.
If that’s where things ended, the case would be one for the record books.
But it didn’t end there. Last week, the judge in the matter threw out the verdict by granting the defendants’ motion for judgment as a matter of law. As Harry Caray would say (I know, wrong sport): “Holy cow!”
First, the judge eviscerated the plaintiffs’ experts: Daniel Rascher and John Zona. Rascher concluded that damages were $7 billion, based on a “but-for” world in which consumers would have paid nothing for out-of-market football games.
He explained his but-for world was based on college-football telecasts, many of which are available at no charge via over-the-air broadcast or at no additional charge via cable or streaming services. When pressed about how that would happen, Rascher asserted that the teams would figure it out, somehow, testifying that:
They will find their way on to these major networks and these major cable stations.
This is what is known as ipse dixit, meaning it’s just the expert’s say-so. Courts don’t like ipse dixit, and neither did this judge.
To make matters worse, Rascher’s opinions were contradicted by fact witnesses and reality. For example, the court points to the testimony of the president of CBS, who said that the network would not share its NFL feed with competitors. Moreover, the judge observed that many college-football games are not available on over-the-air networks or cable stations and that many games of top-ranked teams are available only through premium packages.
For these reasons, the judge tossed Rascher’s testimony, describing it as “ipse dixit opinion untethered to an economic analysis.”
While Rascher’s opinion was clearly flawed, Zona’s approach bordered on the bizarre. His model estimated damages of $3.5 billion based on assumptions that included:
- Distribution was available on some alternative “direct-to-consumer” service (namely, streaming) for the entire time period running from 2011 to 2023;
- The price charged by the alternative service would have been higher [note: not a typo] than NFL Sunday Ticket on DirecTV; and
- Consumers would willingly pay the higher price on the alternative service.
The judge rejected the first assumption, concluding that: “Plaintiffs provided no evidence that any distributor other than DirecTV was working to provide live streaming of sports during the entire class period.”
The judge glided over the second assumption that the price on the alternative service would be higher, but that doesn’t really matter. That’s because the judge skewered the third assumption, concluding: “It is impossible to determine if it would have been economically rational for consumers to purchase Sunday Ticket from an alternative distributor at a higher price.” With that, Zona’s modeling was rejected as unreliable, and his testimony was excluded.
If that’s where things ended, the case would be one for the record books. But it didn’t end there.
The jury returned a verdict of $4,610,331,671.74 to the class of residential consumers and $96,928,272.90 to the class of commercial consumers. That’s right, the jury came up with damages down to the penny. Something seemed amiss.
First, while the jury’s amount was in between Rascher and Zona’s calculations, it was nowhere near either of them. Second, the penny thing seemed just a tad too precise.
It didn’t take too much sleuthing for the defendants to figure out where the number came from. They found that if the total amounts were divided by the number of class members, the average amount per-subscription was exactly the same, $191.26. That number came from taking the $294.00 list price for Sunday Ticket and subtracting the average price paid by consumers of $102.74 for two years, 2018 and 2019. That number was then multiplied by the number of subscriptions to arrive at the total for each class.
Something seemed really amiss: If the price paid is less than the list price, how can that be a measure of damages?
The judge asked the same question, and came a straightforward answer—the jury screwed up, big time:
[T]he jury instead calculated the average “discount” a residential consumer received. Awarding discounts as damages is nonsensical. It is the opposite of what the Court instructed and gets the relationship between overcharges and discounts exactly backwards — awarding damages based on the money the residential class members theoretically saved.
Based on that, the judge vacated the jury’s damages verdict. With Rascher and Zona’s testimony excluded, the judge determined—as a matter of law—that “no reasonable jury” could have found class-wide injuries or damages.
Put simply, the entire case was tossed because of unreliable expert testimony and a rogue jury, putting this case squarely in the record books.
