Fans sue NHL in broadcast battle
Local market exclusivity at heart of TV dispute
A group of disgruntled U.S. hockey fans is going to war against the National Hockey League, accusing the league of conspiring to overcharge customers for its game broadcasts in an antitrust lawsuit.
The litigation, if successful, could cost the NHL hundreds of millions of dollars in damages, several legal experts said.
The lawsuit focuses on the NHL’S practice of giving teams broadcast exclusivity in local markets. That exclusivity means customers who buy the NHL’S season-long viewing packages on the Internet or satellite and cable TV cannot watch broadcasts of games featuring teams in their own market.
Because of these restrictions, there is no way for U.S. consumers to obtain live Internet streaming of games involving a team from within the exclusive territory of that team, the lawsuit alleges.
“No one in New York,” the court filings say, “has access to any live presentation of a contest involving the Rangers over the Internet, despite the fact that Rangers’ contests are routinely streamed over the Internet to consumers elsewhere. . . . The sole reason for this restriction is to interfere with competition.”
By restricting more widely available game telecasts, the league “is able to charge monopoly pricing and limit the choices available to consumers.”
The restrictions amount to a breach of U.S. antitrust law, charges the lawsuit, filed in U.S. District Court for the Southern District of New York. Maple Leaf Sports & Entertainment, which owns the Maple Leafs, is listed as a defendant, as are the NHL’S other 29 clubs.
Because the lawsuit attacks the NHL’S practice of blacking out local games on the Internet in the U.S., there is little case law to rely on, said Geoffrey Rapp, a professor of law and antitrust expert at the University of Toledo. “I imagine that is what the NHL has its lawyers researching right now,” he said.
“The NHL is the poorest of the major sports. Maybe the thinking is . . . they might have a desire to avoid the press and settle.” GEOFFREY RAPP LAW PROFESSOR
The NHL is expected to file a request to dismiss the case by June 1. “Same allegations and claims have been made before against both our league and others,” NHL deputy commissioner Bill Daly said in an email. “Plaintiffs have never prevailed.” That’s not quite true, several legal experts said.
During the 1960s, several prominent U.S. universities including Notre Dame and the University of Oklahoma won an antitrust suit against the NCAA after alleging the NCAA held an illegal monopoly over the negotiation of U.S. college football TV rights.
In the 1990s, the Chicago Bulls filed a suit against the National Bas- ketball Association, alleging they should have the right to sell rights to their games on cable TV throughout the U.S. While the NBA won that case, an appeals court overturned the decision. The case was subsequently settled.
In 2010, the National Football League lost an important antitrust lawsuit filed by American Needle, a sportswear company that charged the league was breaking the law by forcing all of its teams to sign a new licensing agreement with Reebok. The U.S. Supreme Court rejected the NFL’S request to provide it with an antitrust exemption. “This new case is definitely not a nuisance suit,” said an antitrust lawyer in New York who has worked for several NHL owners. The lawsuit also attacks the NHL’S tactic of charging customers $179.80 for its full-season offering of games available on cable and satellite providers. Again, both of those packages, known as NHL Center Ice, black out in-market games. “The use of exclusive territories has long been recognized to be unlawful in the sports broadcasting context,” Howard Langer, a lawyer for the plaintiffs, said in a statement.
Langer wouldn’t say whether he planned similar lawsuits against other major sports leagues.
“The NHL is the poorest of the major sports,” Rapp said. “Maybe the thinking is they don’t have as big a war chest as the other leagues and with the NHL’S labour issues, they might have a desire to avoid the press and settle.”
The latest antitrust litigation is filed by plaintiffs from California, Florida and Illinois, but since lawyers are seeking class-action status, it could include thousands of other plaintiffs. Lawyers have asked that any customers of the NHL Gamecenter Live or NHL Center Ice packages for the past four years be eligible to join the case.
A lawyer involved with the case said it could last three years.
“I think the plaintiffs have a difficult case to make because sports leagues have historically had restrictions on video and audio,” said Northwestern University law professor James Speta.