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MLB / NHL Blackout Policy Legal Thread


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#1 pack

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Posted 22 January 2013 - 07:04 PM

http://www.fangraphs...-in-the-courts/

There's an interesting article on fangraphs today about the MLB Blackout Policy being challenged. The article doesn't mention the NHL, but it applies there as well. It's a set of disgruntled subscribers to MLB/NHL online services who claim the leagues are violating antitrust laws.

I've been picking thru the court finding on why the case will go forward (http://l.yimg.com/j/...ipt/Opinion.pdf). It's a long complex document, and momma didn't raise no big city lawyer, but I found it interesting. Here are the 4 claims that the Leagues are violating anti trust...
  • for Television plaintiffs, violation of Section 1 of the Sherman Antitrust Act based on agreements to “forbid[] the carrying or online streaming of any [NHL/MLB] game in any geographic market except those licensed by the [NHL/MLB] team in that geographic market”
  • for Television plaintiffs, violation of Section 1 based on agreements “that [NHL/MLB] will be the exclusive provider of live ‘out-of-market’ games distributed through television providers”
  • for Internet plaintiffs, violation of Section 1 based on agreements “that [NHL/MLB] will be the exclusive provider of live ‘out-of-market’ games over the Internet”
  • for all plaintiffs, violation of Section 2 for conspiracy to monopolize the “market for video presentations of major league [hockey/baseball] games and Internet streaming of the same"
...and the 6 claims for why the leagues aren't.
  • plaintiffs have not alleged harm to competition.
  • plaintiffs lack standing on the following grounds:

(1) plaintiffs are “indirect purchasers;”

(2) plaintiffs’ injuries are “too attenuated and remote from the alleged horizontal conspiracy;”

(3) the Garber plaintiffs lack standing to assert claims concerning the MLB Extra Innings television package, because none of them purchased that product;

(4) five of six plaintiffs are “former subscribers who assert no intention to subscribe to any of the challenged television or Internet services in the future,” and therefore lack standing to request injunctive relief.

  • plaintiffs allege “no cognizable conduct by Comcast, DirecTV or any of the RSN Defendants” because “[t]he only plausible allegations as to these Defendants relate to their vertical distribution, which is presumptively legal.”
  • the alleged horizontal activities of the NHL and MLB defendants are “lawful on their face” as the “very core of what professional sports league ventures do – sell their jointly created product.”
  • plaintiffs’ “proposed relevant market is insufficient as a matter of law” because plaintiffs fail to “allege facts regarding reasonable"
  • plaintiffs’ claims must be dismissed for:

(1) failure to allege any anticompetitive effect;

(2) failure to allege any plausible “conspiracy” among the Leagues, the clubs and the RSNs and distributors; and

(3) failure to allege any of the necessary elements of a monopolization claim


Is anyone else on SoSH following this? Did I miss a thread somewhere? I've already picked a horse in this race, but I'm interested to hear opinions on why the blackout restrictions are a good idea. I'm interested as to why I'm considered an "indirect purchaser" means, since I've bought MLB.tv before and was definitely charged by MLB Baseball.

Mods: feel free to move where you think is reasonable.
TIL: Many many words used by lawyers are flagged by chrome's spell checker.

#2 Spacemans Bong


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Posted 22 January 2013 - 07:56 PM

No blackouts probably leads us to the end game of sports fans paying a la carte pricing for cable and MLB.TV. Which means fans will end up paying more to keep watching sports. Right now, cable effectively free loads on the majority of the population that doesn't watch baseball to keep prices down. Economies of scale and all that. Plus advertising on MLB.TV doesn't make jack.

I suppose people may ask why it's essential for baseball to basically live off of rent-seeking but I think people need to understand that if the plaintiffs win, it won't be $110 MLB.TV but you just get to see your local team's games too. It probably means wholesale changes to the pricing structure of watching baseball that is going to place a greater burden on the fans who actually watch night in night out.

#3 PrometheusWakefield


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Posted 22 January 2013 - 08:38 PM

I don't have the time to pick through the documents but I don't understand the case at all. MLB is exempted from the Sherman Antitrust Act because of Federal Baseball Club v. National League. That's an awful, stupid, barely reasoned opinion written by none other than Oliver Wendell Holmes but I'm pretty sure it's still law of the land.

Edited by PrometheusWakefield, 22 January 2013 - 08:38 PM.


#4 Orel Miraculous

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Posted 22 January 2013 - 10:08 PM

I don't have the time to pick through the documents but I don't understand the case at all. MLB is exempted from the Sherman Antitrust Act because of Federal Baseball Club v. National League. That's an awful, stupid, barely reasoned opinion written by none other than Oliver Wendell Holmes but I'm pretty sure it's still law of the land.


Some would argue that Federal Baseball Club v. National League held that baseball is exempt from the Sherman Act in the context of the 30 individual teams contracting and combining with each other, but did not necessarily issue a blanket antitrust exemption that applies even to MLB dealings with outside parties. In Piazza v. MLB, a district court allowed a suit in antitrust to proceed against MLB, reasoning that the antitrust exemption really only applied to the reserve clause (Mike Piazza's uncle or cousin or something sued MLB after the owners voted against his bid to buy the Giants). That case was eventually settled so a circuit court never ruled on that decision--and its definitely an outlier--but there is an argument to made that blackout agreements go beyond the scope of the antitrust exemption.

#5 PrometheusWakefield


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Posted 22 January 2013 - 10:28 PM

Wow, I didn't know that. So basically the only thing the exemption meant was the right to act as a cartel to drive down the wages of their employees. Really one of the worst SCOTUS decisions of all time.

Edited by PrometheusWakefield, 22 January 2013 - 10:29 PM.


#6 perfectgedman

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Posted 23 January 2013 - 10:37 AM

I am one of the attorneys representing the plaintiffs that are challenging the MLB / NHL policies in this lawsuit. I started a thread in the Media Forum back in June:

http://sonsofsamhorn...ging-blackouts/

As that Fangraphs piece describes, the Court denied the Defendants' motions to dismiss last month and both the MLB and NHL cases are now headed into discovery.

I am happy to discuss these cases in greater detail with anyone who is interested -- my contact information is below. We are particularly interested in discussing these cases with DirecTv subscribers who have purchased Extra Innings or Center Ice.


Thanks for your interest,

Kevin Costello

Klein Kavanagh Costello, LLP
85 Merrimac Street, 4th Floor
Boston, MA 02114
http://www.kkcllp.com
617-357-5500
costello[at]kkcllp.com


[edited for formatting]

Edited by perfectgedman, 23 January 2013 - 10:40 AM.


#7 glennhoffmania


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Posted 24 January 2013 - 10:00 AM

Kevin, I have a question for you.  I think I understand the two issues involved in your law suit, but do either of them address the general Fox Saturday blackouts?  For example, I live in NYC so the Iowa example wouldn't apply to me but how are you addressing the issue that whenever there's a NY team playing on Saturday afternoon I can't get the Sox game that's on at the same time even if I purchase EI?



#8 perfectgedman

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Posted 24 January 2013 - 11:31 AM

Kevin, I have a question for you.  I think I understand the two issues involved in your law suit, but do either of them address the general Fox Saturday blackouts?  For example, I live in NYC so the Iowa example wouldn't apply to me but how are you addressing the issue that whenever there's a NY team playing on Saturday afternoon I can't get the Sox game that's on at the same time even if I purchase EI?

Short answer is yes.  Please give me a call or drop me an email for the long answer.  






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