NHL and Television Subscribers Reach Settlement in Antitrust Case

The National Hockey League (NHL) and a group of fans reached a settlement last week in an antitrust class-action lawsuit that was originally filed in 2012. The lawsuit was filed in New York federal court by a group of television subscribers who claimed that the NHL, many of the league’s teams, and the league’s television partners violated antitrust laws by imposing territorial restrictions on the broadcast of games.  The NHL uses television blackouts to limit the availability of local, in-market game broadcasts to fans over the internet.

The lawsuit alleged that the NHL formed agreements with television providers such as Comcast and DirecTV to block access (blackout) to in-market games to protect regional television networks from competition. These regional television networks own the monopoly broadcasting rights to the games of individual teams. The lawsuit also alleged that the NHL forced consumers to pay an excessive amount to watch out-of-market games (i.e. non-local teams) over the internet.

The lawsuit addresses the ability of fans to watch games online through the league’s NHL Game Center Live platform. The settlement must be accepted by the judge in the case, and there is still an opportunity for members of the plaintiffs’ class to object to the proposed deal.

The settlement requires that the NHL cut prices for out-of-market games and allow subscribers to purchase team-specific television packages. This will allow fans to only pay to watch the teams that they personally want to see. In the past, fans were forced to pay for a television package that included every NHL team (excluding local teams) if they wanted to be able to stream games over the internet. The new individual team package will cost subscribers twenty percent less than the old all-inclusive package.

While this new package will benefit fans who live outside of their favorite team’s broadcast market, the settlement does not address complaints about the blackouts of all in-market teams. If the settlement is approved, the NHL will likely continue to be permitted to block subscriber’s access to the live broadcasts of in-market/local teams online. This means that fans of local teams will continue to be without an option for watching their favorite team’s games online.

This settlement is particularly significant because access to live sports programming is one of the major reasons that many television subscribers have chosen not to cord-cut and keep their cable or satellite TV subscription. As long as fans are unable to watch their local team’s games over the internet, they will be forced to continue to subscribe to a cable or satellite TV package to watch their local team. A subscription to NHL Game Center Live is the only way for NHL fans to watch games over the internet. Surprisingly, plaintiffs support the settlement even though U.S. District Judge Shira Scheindlin said just last month that these television blackouts are likely illegal.

The NHL has been focused on striking a settlement that does not cut into the profit margin of its broadcast partners and cable and satellite companies. The league relies on these companies to distribute its product and does not want to anger or weaken them. Additionally, analysts suggest that if internet blackouts of local games are ruled to be an antitrust violation, it would pose a threat to the business model of professional sports because these leagues rely on selling the monopoly broadcasting rights of their games for massive profits. Without the promise of monopoly rights, potential broadcasters would be much less willing to pay the large sums that they currently consistently offer.

Major League Baseball is facing a very similar federal court antitrust action also brought by its television subscribers. Many have suggested that if the NHL settlement is approved by the judge, it could serve as an indicator of the likely outcome of the lawsuit against Major League Baseball.