Laumann v. NHL - 56 F. Supp. 3d 280 (S.D.N.Y. 2014)

Rule:

The Sports Broadcasting Act (SBA) creates an antitrust exemption for certain types of professional sports broadcasting agreements, particularly league-wide contracts for over-the-air broadcasts. 15 U.S.C.S. § 1291. Aside from that limited exception, the SBA does not change the applicability of the antitrust laws to professional sports. 15 U.S.C.S. § 1294. The Act expressly does not apply to any agreement that prohibits the televising of any games within any geographic area, except within the home territory of a member club of the league on a day when such club is playing at home. 15 U.S.C.S. § 1292. The SBA demonstrates Congress's recognition that agreements among league members to sell television rights in a cooperative fashion could run afoul of the Sherman Antitrust Act, and in particular reflects its awareness of the decision in United States v. National Football League, which held that an agreement among the teams of the National Football League not to telecast games in certain geographic areas at certain times violated § 1 (15 U.S.C.S. § 1) of the Sherman Act. 

Facts:

Plaintiffs brought these putative class actions against the National Hockey League ("NHL") and various individual clubs in the league (the "NHL Defendants"); Major League Baseball ("MLB") and various individual clubs in the league (the "MLB Defendants") (together the "League Defendants"); multiple regional sports networks ("RSNs") that produce and distribute professional baseball and hockey programming; two multichannel video programming distributors ("MVPDs" or "distributors"), Comcast and DIRECTV (together with the RSNs, the "Television Defendants" or "broadcasters"); Madison Square Garden Company and the New York Rangers Hockey Club (the "MSG Defendants"); and New York Yankees Partnership and Yankees Entertainment & Sports Network, LLC ("YES") (together the "Yankee Defendants"). Plaintiffs alleged violations under Sections 1 and 2 of the Sherman Antitrust Act (the "Sherman Act").

Issue:

Did the baseball exemption from the antitrust laws extend to baseball's contracts for television broadcasting rights?

Answer:

No.

Conclusion:

The court held that baseball exemption from the antitrust laws did not extend to baseball's contracts for television broadcasting rights. Professional baseball and hockey leagues and clubs were not entitled to summary judgment on claims that they violated the Sherman Antitrust Act by agreeing to place territorial restrictions on television broadcasts of games. The leagues and clubs did not establish as a matter of law that the restrictions resulted in procompetitive benefits to the economy. Regional sports networks and distributors were not required to have requested or enforced the territorial restrictions in order to be liable for violations based on vertical agreements. Parallel conduct, knowledge of sure enforcement, and other evidence could support a finding that a tacit horizontal agreement existed among the networks and distributors.