Finally -- some real value in my work

[tzill]

MLB, Comcast Hit With Antitrust Suit Over Game Packages - Law360


Just doin' my job, keeping up on IP law....and BAM!

 

[Heathbar012]

Nice, man! Think you can work on the end of TSA shutting down the websites that share games, too? I pay for my internet. I don't see anything wrong with a friend in Germany showing me a game that isn't being broadcast anywhere in my area without exorbitant costs. That might be a little greedy, but entertainment costs have to be cut somewhere in most households. Why can't I watch every Giants, Warriors, Niners, Sharks and Liverpool game for less than $3,000 per year? Keep up the good work!

 

[calsnowskier]

For us lay, it is a locked site.

Can you give us a quick gist of the suit? On the surface, I am nit sure how they can be in violation for limiting the access to their own product.

 

[tzill]

For us lay, it is a locked site.

Can you give us a quick gist of the suit? On the surface, I am nit sure how they can be in violation for limiting the access to their own product.

Aw crap; sorry dudes. I'll see if I can get a summary of the suit for you.

 

[tzill]

I live to serve:
______________________


A handful of avid baseball fans on Wednesday launched a putative class action against Major League Baseball Enterprises Inc. and several cable and Internet providers, including Comcast Corp. and Directv LLC, claiming their live-game video offerings violate antitrust laws.

The plaintiffs claim that the league, its teams and the Internet and cable providers they do business with have created an illegal monopoly over the availability of live games for fans to watch online or on television that allows them to jack up prices to their liking without worrying about competition.

The complaint, which also names the Office of the Commissioner of Baseball and several baseball clubs as defendants, says club owners act in their own economic self-interest by entering into agreements that eliminate, restrict and prevent off-field business competition.

"These anti-competitive agreements go far beyond any cooperation reasonably necessary to provide major league men’s professional baseball contests that increase fan appeal or respond to consumer preferences," the complaint says.

The only way fans can watch teams and games that are not in their geographic areas are by purchasing "out of market" package, the suit says. MLB.tv is available to buy online, and MLB Extra Innings can be purchased through a cable or satellite provider.

However, for both packages, in-market games, or those within the viewer’s geographic location, are blacked out to protect the local television partner, according to the suit.

"Thus, a New York Mets fan living in New York cannot watch the Mets play through the Internet or television package," the suit says. "The fan must own a television and subscribe to a cable package that includes channels that carry Mets’ games."

The suit also claims the defendants also have colluded to sell the "out-of-market" packages only through the league, and are then able to exploit their allegedly illegal monopoly by charging sky-high prices.

As a result of this monopoly, the league is able to require purchasers of MLB.tv and MLB Extra Innings to buy all "out-of-market" games of all the league’s teams even if the fan is interested only in one particular team or game, the complaint says.

In 2011, a season of games through MLB.tv cost $99.99 or $119.99 for a premium subscription, which allows the viewer to watch both home and away games, according to the suit.

Plaintiffs are seeking a judgment for three times the amount they allegedly suffered in damages.

Representatives for the league, Comcast and Directv could not be immediately reached for comment Wednesday.

The plaintiffs are represented by Michael Bichman of Pomerantz Haudek Grossman & Gross LLP and Edward Diver, Howard Langer and Peter Leckman of Langer Grogan & Diver PC.

Counsel information for the defendants was not immediately available.

The case is Fernanda Garber et al. v. Office of the Commissioner of Baseball et al., case number 12-cv-3704, in the U.S. District Court for the Southern District of New York.

 

[Heathbar012]

Obviously, baseball's antitrust exemption can't be used as a defense here because it incorporates business dealings with other entities. However, do you anticipate an attempt at an argument that the antitrust exemption blankets over this situation? If it doesn't, was the antitrust exemption solely meant for the "business of baseball?" Could the argument be made that these contracts are the "business of baseball" even though it stretches across other entities? Is there any precedent there? In my time studying MLB's antitrust exemption, I found it most interesting that the federal government has never attempted to outline exactly what it entails. Given the rapid changes in technology, I don't know that they could with any conviction or longevity. Either way, this should be a fascinating case. I look forward to reading more about it.

 

[gp956]

So the plaintiffs are going after the local black-out rules and the bundling of out-of-market games. I hope they win. In the long run this is where the market has to go anyway.

 

[Heathbar012]

So the plaintiffs are going after the local black-out rules and the bundling of out-of-market games. I hope they win. In the long run this is where the market has to go anyway.

I believe that certain regulations of the internet need to take place, but not the ones that most businesses and lobbyists want to see.

 

[tzill]

Obviously, baseball's antitrust exemption can't be used as a defense here because it incorporates business dealings with other entities. However, do you anticipate an attempt at an argument that the antitrust exemption blankets over this situation? If it doesn't, was the antitrust exemption solely meant for the "business of baseball?" Could the argument be made that these contracts are the "business of baseball" even though it stretches across other entities? Is there any precedent there? In my time studying MLB's antitrust exemption, I found it most interesting that the federal government has never attempted to outline exactly what it entails. Given the rapid changes in technology, I don't know that they could with any conviction or longevity. Either way, this should be a fascinating case. I look forward to reading more about it.

This touches on, but is not exactly within, my area of expertise. As I understand it, the antitrust exemption is very limited in scope and can be rescinded by Congress if MLB acts in such a way as to harm the baseball consumer.

That said, I think the plaintiffs will argue that the exemption doesn't apply to business dealings, but rather was intended to allow the teams to act in concert regarding the draft, limiting free agency, etc. All those things would be restraint of trade in the real world and punishable under the Sherman Act.

The essential difference is that Apple doesn't need Google to sell iPhones, but the Yankees need the Royals to play baseball. Thus, even though they're "competing" they also have a vested interest in ensuring the viability of the league as a whole.

Again, I haven't read most of the exemption, but that's my back-of-the-envelope take. I did clerk for the Minneapolis Judge who issued the injunction against MLB from contracting the Twins, but it's been a while since I've read any of that material.

 

[tzill]

Obviously, baseball's antitrust exemption can't be used as a defense here because it incorporates business dealings with other entities. However, do you anticipate an attempt at an argument that the antitrust exemption blankets over this situation? If it doesn't, was the antitrust exemption solely meant for the "business of baseball?" Could the argument be made that these contracts are the "business of baseball" even though it stretches across other entities? Is there any precedent there? In my time studying MLB's antitrust exemption, I found it most interesting that the federal government has never attempted to outline exactly what it entails. Given the rapid changes in technology, I don't know that they could with any conviction or longevity. Either way, this should be a fascinating case. I look forward to reading more about it.

MLB has some very, very powerful anti-trust lawyers who are going to argue that the Exemption DOES indeed cover this. I'll be interested in reading the briefs. I'll report back when I do.

I suspect that, like 97% of all civil lawsuits, it will settle. And I'd bet that it'll settle with the easing of restrictions of in-area games being broadcast over the interwebs.

However, it'll take a couple of years and quite a few attorney's children will have their tuitions paid by the exercise.

Second best thing I ever did, becoming a lawyer...

 

[Heathbar012]

MLB has some very, very powerful anti-trust lawyers who are going to argue that the Exemption DOES indeed cover this. I'll be interested in reading the briefs. I'll report back when I do.

I suspect that, like 97% of all civil lawsuits, it will settle. And I'd bet that it'll settle with the easing of restrictions of in-area games being broadcast over the interwebs.

However, it'll take a couple of years and quite a few attorney's children will have their tuitions paid by the exercise.

Second best thing I ever did, becoming a lawyer...

Don't settle without this. Thanks, man. This actually is really interesting stuff. I hate most of the legal work that I do for banks and rich people, but reading up on this stuff again would be a blast.

I'm guessing the best thing you ever did has something to do with a ring and a smart, beautiful woman. At least, we have that feeling in common.

 

[gp956]

This touches on, but is not exactly within, my area of expertise. As I understand it, the antitrust exemption is very limited in scope and can be rescinded by Congress if MLB acts in such a way as to harm the baseball consumer.

That said, I think the plaintiffs will argue that the exemption doesn't apply to business dealings, but rather was intended to allow the teams to act in concert regarding the draft, limiting free agency, etc. All those things would be restraint of trade in the real world and punishable under the Sherman Act.

The essential difference is that Apple doesn't need Google to sell iPhones, but the Yankees need the Royals to play baseball. Thus, even though they're "competing" they also have a vested interest in ensuring the viability of the league as a whole.

Again, I haven't read most of the exemption, but that's my back-of-the-envelope take. I did clerk for the Minneapolis Judge who issued the injunction against MLB from contracting the Twins, but it's been a while since I've read any of that material.

Other sports don't have anti-trust exemptions, yet they have drafts, limited free-agency, and the like. I'm out of my depth on these issues, but I thought so long as the "workers" agree to collective bargaining, then the leagues can implement "anti-trust" policies within their own sport.

 

[Heathbar012]

Other sports don't have anti-trust exemptions, yet they have drafts, limited free-agency, and the like. I'm out of my depth on these issues, but I thought so long as the "workers" agree to collective bargaining, then the leagues can implement "anti-trust" policies within their own sport.

No other league has attempted to get the label of anti-trust exemption from the federal government. I think (based on exactly what you mentioned) that the other leagues view it as pointless. Given the expansion of the entertainment market, it probably is (again, for the reasons you point out).

MLB got the exemption back in the mid 1910s, if I recall correctly. Obviously, there was no way to anticipate not only the financial and technological growth, but changing of the sports and society, in general. Imagine trying to explain free agency and amateur player drafts to a bunch of "barnstormers." It really is an outdated "perk" in a lot of ways, and in its purest form is something that should (and in most ways) is afforded to all professional sports leagues. It really only comes up, and is challenged, in situations such as this. As usual, tzill's interpretation of the likely events, is completely spot on, in my opinion. The attorneys will get paid. Some subscribers will get a small check, and hopefully, I'll be able to watch all of my favorite sports teams for the cost of my $20/month internet (much to the dismay of Mrs. Heath).

EDIT: All that being said, MLB's exemption (no matter how seemingly useless) will never be revoked because it is another card that they can play in situations such as this.

 

[gp956]

No other league has attempted to get the label of anti-trust exemption from the federal government. I think (based on exactly what you mentioned) that the other leagues view it as pointless. Given the expansion of the entertainment market, it probably is (again, for the reasons you point out).

MLB got the exemption back in the mid 1910s, if I recall correctly. Obviously, there was no way to anticipate not only the financial and technological growth, but changing of the sports and society, in general. Imagine trying to explain free agency and amateur player drafts to a bunch of "barnstormers." It really is an outdated "perk" in a lot of ways, and in its purest form is something that should (and in most ways) is afforded to all professional sports leagues. It really only comes up, and is challenged, in situations such as this. As usual, tzill's interpretation of the likely events, is completely spot on, in my opinion. The attorneys will get paid. Some subscribers will get a small check, and hopefully, I'll be able to watch all of my favorite sports teams for the cost of my $20/month internet (much to the dismay of Mrs. Heath).

EDIT: All that being said, MLB's exemption (no matter how seemingly useless) will never be revoked because it is another card that they can play in situations such as this.

Yeah, I can't see how that exemption can really be used in this situation. From a pure logic POV, let's say the current method of product delivery is ruled anti-competitive, you'd be asking the Federal Government to, in effect, approve of the transfer of wealth from the relatively poor to the relatively wealthy. Now that does actually occur in the financial industry, but the thinking there is too much competition in that industry causes instability in all other markets.

 

[Heathbar012]

Yeah, I can't see how that exemption can really be used in this situation. From a pure logic POV, let's say the current method of product delivery is ruled anti-competitive, you'd be asking the Federal Government to, in effect, approve of the transfer of wealth from the relatively poor to the relatively wealthy. Now that does actually occur in the financial industry, but the thinking there is too much competition in that industry causes instability in all other markets.

Exactly. Sometimes, the law can be logical.

EDIT: ... there is always argument of fact, though... and that is where the attorneys' kids' college expenses come into play.

 

[gp956]

Exactly. Sometimes, the law can be logical.

EDIT: ... there is always argument of fact, though... and that is where the attorneys' kids' college expenses come into play.

Yeah. It will be fascinating to see how baseball, if they invoke anti-trust protection, justifies stealing nickles from kids in order to give them to millionaires and billionaires.

 

[calsnowskier]

IF MLB were to lose this one, I wonder how it will affect all the MASSIVE TV contracts that have been signed in the last few years. The internet, I feel, will ultimately kill TV, and maybe sooner than any of us think (within 10-15 years).

If CSN, YES, FOX, etc lose their territory rights to the local teams, will they be able to renegotiate their $B deals?

 

[tzill]

Don't settle without this. Thanks, man. This actually is really interesting stuff. I hate most of the legal work that I do for banks and rich people, but reading up on this stuff again would be a blast.

I'm guessing the best thing you ever did has something to do with a ring and a smart, beautiful woman. At least, we have that feeling in common.

Nailed it. Im a Giants fan and a Jew by birth, no choice there.

 

[tzill]

Other sports don't have anti-trust exemptions, yet they have drafts, limited free-agency, and the like. I'm out of my depth on these issues, but I thought so long as the "workers" agree to collective bargaining, then the leagues can implement "anti-trust" policies within their own sport.

That's essentially correct. And although the NFL and NBA don't have EXPLICIT anti-trust exemptions, they are exempt by precedent. That's why, when the exemption is challenged, you see the NFL and NBA file amicus briefs. If baseball loses its exemption, the other leagues would be drastically affected.

That is, the effect would be severe.

 

[tzill]

No other league has attempted to get the label of anti-trust exemption from the federal government. I think (based on exactly what you mentioned) that the other leagues view it as pointless. Given the expansion of the entertainment market, it probably is (again, for the reasons you point out).

MLB got the exemption back in the mid 1910s, if I recall correctly. Obviously, there was no way to anticipate not only the financial and technological growth, but changing of the sports and society, in general. Imagine trying to explain free agency and amateur player drafts to a bunch of "barnstormers." It really is an outdated "perk" in a lot of ways, and in its purest form is something that should (and in most ways) is afforded to all professional sports leagues. It really only comes up, and is challenged, in situations such as this. As usual, tzill's interpretation of the likely events, is completely spot on, in my opinion. The attorneys will get paid. Some subscribers will get a small check, and hopefully, I'll be able to watch all of my favorite sports teams for the cost of my $20/month internet (much to the dismay of Mrs. Heath).

EDIT: All that being said, MLB's exemption (no matter how seemingly useless) will never be revoked because it is another card that they can play in situations such as this.

And at the end of the day, isn't that really all that matters?