In March 2012, dissatisfied hockey fans from the United States filed a federal antitrust lawsuit in New York against the National Hockey League (NHL) challenging the in-market blackouts that accompany all of the League’s subscription packages. The NHL’s predicament revolves around those fans accusing the NHL conspiring to overcharge consumers.
Since the NHL has granted teams exclusive broadcast rights in local markets, subscribers of the NHL’s viewing packages, NHL Center Ice and NHL Gamecenter Live, cannot stream games involving teams in their local exclusive territory. The NHL’s restrictions originated from an effort to protect television ratings of the local teams’ networks. But, as fans argued, these restrictions represented a breach of U.S. antitrust law.
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According to the court filings: “No one in New York 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.” And without competition, the NHL “is able to charge monopoly pricing and limit the choices available to consumers.”
Months later, in August 2014, the Judge’s decision to deny the NHL’s motion to dismiss the lawsuit was unsealed. Almost a year later, in May 2015, the plaintiffs’ motion to certify class action status was granted by U.S. District Court Judge Shira Scheindlin. So, rather than suing on an individual basis, all of the disgruntled consumers who filed against the NHL can act collectively.
“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,” said Judge Scheindlin.
Finally, in June 2015, the NHL and fans sought to settle the class action lawsuit, with a proposed settlement offered that would decrease the price of NHL streams. Rather than buying the $159 bundle that includes streams for all teams, fans will have the option to purchase a $105 single-team package. Fans outside of exclusive markets can purchase a package for one team; for example, a Detroit Red Wings fan living in New York can purchase a package solely for the Red Wings, rather than the full bundle. However, this single-team package still includes local market blackouts.
This proposed settlement may not actually remedy the harms at issue in the case. It was the issue of in-market blackouts that inspired the lawsuit initially, because fans alleged the restrictions amounted to an illegal monopoly. Yet this proposed settlement would not solve that core issue. In fact, Judge Scheindlin agreed with the plaintiffs’ claim that the NHL’s blackout policy appeared to be a violation of antitrust law. Under the proposed settlement, fans still will still face local market blackouts.
In May, Judge Scheindlin also ruled that the plaintiffs could not recover monetary damages from this lawsuit, but could continue to fight to force the NHL to remove blackout restrictions. Incredibly enough, it is possible that the plaintiffs abandoned their original objective because of the judge’s ruling that removed the potential of financial compensation, even though injunctive relief would have been a groundbreaking victory for sports fans–especially cord cutters.
The defendants, the NHL and broadcasters, have urged the court to approve the proposed settlement prior to the start of the 2015-2016 NHL season. Although this case appears to be coming to a close, the leagues and broadcasters still have to be wary. It could be determined by other, and possibly higher, courts that local market blackouts do violate U.S. antitrust law. If that ruling is made, the business models of league subscription services–which currently rely on their monopolization of game streams–could be jeopardized.