And now for the main event…

A couple of weeks ago, over dinner, a veteran lobbyist asked a table of media executives to name a time when Capitol Hill had ever shown this much interest in the sports business. Nobody had an answer. From the F.C.C. to the Justice Department to various House and Senate committees, the NFL’s media rights strategy has become a topic of conversation in Washington in a way that even seasoned hands couldn’t recall.

Yet for all the attention, there’s a fair chance it leads nowhere. My Puck partner Eriq Gardner, our legal maestro, sees the NFL’s most serious challenges not in the corridors of government, but in the courts. The F.C.C. may issue a sternly worded reminder that the NFL ought to prioritize broadcast TV even more than it already does, and the Justice Department may rattle its sabers over the league’s antitrust exemption. But such gestures feel light—almost ceremonial—beside the weight of a $4.6 billion Sunday Ticket verdict, which could alter the league’s business in a far more material way. Herewith, a lightly edited version of the conversation I had with Eriq about these issues.

John Ourand: Let’s start on Capitol Hill. The F.C.C. opened a public inquiry into the NFL’s migration to streaming. The Department of Justice is looking into whether the NFL is selling its rights in an anticompetitive way. Regulators on both sides of the aisle are wondering aloud whether the league should keep its antitrust exemption. This is a real issue in D.C.; regulators and lawmakers really seem to care about it. On the other hand, we all know how difficult it is for anything to get through Congress. Is the NFL in peril here?

Eriq Gardner: The NFL is facing a lot of peril from cases that are making their way through the courts—not so much from Capitol Hill. The F.C.C. inquiry, in particular, is overhyped. The agency really has no jurisdiction over streaming. I expect Brendan Carr will merely write back to Congress about the laws he believes should be adjusted. (Don’t hold your breath.)

Now it’s possible that the Justice Department takes direct action, but I see that as unlikely. Antitrust cases aren’t easy. The D.O.J. would essentially have to refute the NFL’s pro-competitive justifications for centralizing rights sold—balance among teams, a coherent broadcast schedule, avoiding further fragmentation, etcetera. Of course, things have become unpredictable in the Trump era, so I wouldn’t rule out some bold stroke. But traditionally, this is not something the Justice Department would lead with.

Let me push back a bit here. The idea of keeping games on broadcast television—or “free TV,” as the lawmakers call it—is a bipartisan issue. Who’s against helping consumers save money rather than buying a bunch of streaming services and a cable TV package? Everyone from liberal Sen. Elizabeth Warren to conservative Mike Lee has made headlines on this issue over the past month.

Yes, there’s a populist sentiment against putting NFL games behind streaming paywalls. On the other hand, Republican and conservative administrations tend to be pro-business and laissez-faire. They prefer to let the market dictate—which, of course, would be much friendlier to the league’s position that it’s free to sell to whomever it wishes. Remember, the NFL asked the Supreme Court a few years ago to take up the Sunday Ticket case when it was first revived by the Ninth Circuit. At the time, the justices turned it down, but Brett Kavanaugh was receptive to the league’s position. It showed the more traditionally conservative way to view the issues.

Is there nothing to be done? Well, a more populist prescription might be to adjust tax policy to incentivize the NFL to keep games on broadcast rather than behind paywalls. But that’s just one idea.

Okay, let’s get to the courts, which is where the NFL faces the biggest challenges—particularly with the Sunday Ticket case that’s been making its way through the system. I’m perplexed as to why the NFL doesn’t settle. If there is real danger here—and we both think there is for the league—why hasn’t Roger Goodell settled this case and made it go away?

We don’t know what the settlement calculus is or what the offers are. This is a case that resulted in a $4.6 billion verdict—and that was before the figure was tripled. If the plaintiffs are saying they want $2 billion, or even $1 billion, to settle this case, that could impact things like the salary cap. Of course, with its business model on the line, you’d think the NFL would be very receptive to even that amount. But at the moment, the league is digging its heels. We’ll see if that posture survives appeal.

Where does that case stand right now? It seems like things have gone quiet.

We’re waiting for the decision from the Ninth Circuit, which could come any day or any week. Once that decision comes, expect the losing side to ask the Ninth Circuit for a rehearing. That’ll happen relatively quickly. From there, expect a petition to the Supreme Court. It’ll get real noisy, real quick.

I understand that the NFL is the biggest sports property in the U.S. today, so it’s not a surprise to see so much focus on the Shield. But what about the other sports? Surely, there are some knock-on effects from all of this that could affect the NBA or MLB.

This happened so many years ago that people forget, but before the Sunday Ticket case, there were very similar cases against both MLB and the NHL. Both of those cases were settled.

What about MLB’s famous antitrust exemption?

The judge in the case, Shira Scheindlin, actually ruled that the exemption applied only to what was central to the business of baseball, and—get this—she said TV broadcast contracts weren’t central. She rejected MLB’s summary judgment motion—Comcast’s, too—and the case was settled before a trial could examine the league’s pro-competitive justifications, such as how centralized dealmaking encourages broadcasters to invest in higher-quality telecasts.

I think it’s noteworthy that these leagues settled for pretty cheap: Fans got the option to purchase single-team packages and discounts on leaguewide ones; the lawyers, of course, got legal fees. Whereas the NFL dug its heels in with a high-stakes game of legal brinksmanship.

Still, be mindful of the possibility that someone could bring a new case against, say, the NBA for its recent deals. That next generation of litigation on the sports-rights dealmaking front will almost certainly be influenced by what the Ninth Circuit and Supreme Court soon say in the Sunday Ticket case.

On ESPN’s layoffs: “When someone like Ilan Ben-Hanan gets laid off, it’s a humbling reminder that no one is safe in an increasingly tenuous industry. Ilan also made the Spelling Bee a nationally televised event and was the programming point person when ESPN first expanded to Los Angeles.” —A broadcast executive

On the Great 8: “True story: A doc featuring Ovi breaking Gretzky’s goal record was shopped, but there were no good offers. He was on board, but the doc market has become so, so tough.” —A production executive

More on the Great 8: “I was at Ovi’s last game on Tuesday. It felt like a gentle sail into the sunset, though some reporting indicates the Caps are more willing to move on than he is…” —A business executive

Have a great week. See you tomorrow,
John

Correction: In my scoop about Monumental Sports hiring Dorian Craft to call Mystics games, I described the play-by-player as a “former ESPN and CBS Sports Network announcer.” Craft is still working at other networks in addition to her Mystics gig. I apologize for the error.

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