Challenge To Alleged Restraints On Baseball And Hockey Programming Survive Motion To Dismiss And Advance To The Next Round Of Litigation

Have you ever been away from home when your favorite baseball or hockey team is playing an important game? Ever wished you could watch that game, and just that game, live while you are on the road? If plaintiffs in Laumann v. Nat'l Hockey League, Case No. 1:12-cv-01817 (S.D.N.Y.) have their way, you might get your wish. On December 5, 2012, District Judge Shira A. Scheindlin largely denied a motion to dismiss plaintiffs' Sherman Act Section 1 and 2 claims challenging agreements that allegedly restrain the markets for baseball and hockey programming. Plaintiffs, consumers of television and internet packages that include baseball and hockey programming, allege that competition has been eliminated in the distribution of baseball and hockey games through a web of collusive agreements between and among numerous defendants, including the National Hockey League ("NHL"), Major League Baseball ("MLB") (collectively, the "Leagues"), the teams within those leagues, regional sports networks that televise the games ("RSNs") and multichannel video programing distributors ("MVPDs") Comcast and DirecTV, which sell cable programming packages. Defendants' agreements purportedly divide the market into exclusive "in-market" territories protected by blackouts, prohibit any option for viewing in-market games on the internet, and provide consumers with only one option for viewing "out-of-market" games, an all-or-nothing package containing all out-of-market games. The result, according to plaintiffs, is a double play—higher prices and reduced output of sports programming.

According to plaintiffs, the teams within the MLB and NHL own the rights to telecast their own home games. Each team permits visiting teams to generate their own telecasts as well. RSNs negotiate with teams for the rights to broadcast their games locally ("in market" games). RSNs then sell programming to MVPDs, and MVPDs sell a standard package of programs to consumers that includes in-market games. The teams give the Leagues exclusive rights to broadcast their games outside of the in-market region ("out-of-market" games). In order to watch out-of-market games, consumers have to purchase an all-or-nothing television package from an MVPD or an all-or-nothing internet package directly from the League, with one exception—a small percentage of games are nationally televised pursuant to agreements between the Leagues and national networks. If a consumer wants to purchase a package that includes all...