Fans take step closer in action to sue NHL

Two years ago in New York, a lawsuit was filed by a group of unhappy NHL fans who claimed that the restrictions on broadcasting were inappropriately driving up the price of sports cable television packages. We are now heading towards an impending trial which I’ll touch upon later.

The lawsuit isn’t just filed at the NHL with the MLB also a target but for the purposes of this article I’ll concentrate on the NHL side of things.

The Toronto Star reported this back in 2012 and the following report from them fully explains the situation better than I could.

*** “No one in New York,” the court filings say, “has access to any live presentation of a contest involving the Rangers over the Internet, despite the fact that Rangers’ contests are routinely streamed over the Internet to consumers elsewhere. . . . The sole reason for this restriction is to interfere with competition.”

By restricting more widely available game telecasts, the league “is able to charge monopoly pricing and limit the choices available to consumers.”

The restrictions amount to a breach of U.S. antitrust law, charges the lawsuit, filed in U.S. District Court for the Southern District of New York. Maple Leaf Sports & Entertainment, which owns the Maple Leafs, is listed as a defendant, as are the NHL’s other 29 clubs.

The blackouts have long been a point of contention among fans when it comes to Game Centre Live, in particular. They are of course designed to protect the ratings of the network that owns the TV rights for the local team, but the consumer is often a big loser in that scenario.

It’s not just for teams in their home markets. For instance, in Iowa (where I got to find this out for myself the hard way), a fan who purchases the GCL package is likely to have games blacked out for each of the Chicago Blackhawks, Minnesota Wild and St. Louis Blues, whether that individual’s cable provider carries the networks that those teams are on or not. That’s a loss of a significant amount of games despite the cost associated with the service for the consumer.

What will make this trial even more interesting to follow is how it would impact each individual team’s flexibility in controlling their own broadcasting rights outside of their local market.

The NHL has prevented its teams from selling their TV rights outside of the local markets since 1985 according to Rick Westhead.***
NHL-Gamecenter-Blackout

 

The lawsuit will also challenge the NHL’s tactic of charging customers $179.80 for its full-season offering of games available on cable and satellite providers. Again, both of those packages, known as NHL Center Ice, black out in-market games.

The motion to dismiss was denied by Shira Scheindlin, a federal judge in New York, according to the New York Times and we are set for a trial to start in early 2015.

Interesting if the lawsuit is successful it would definitely benefit some teams in the NHL who would be able to stretch out their financial muscle across North America and across the world in some cases.

Imagine the Toronto Maple Leafs with the power to sell their brand and TV rights across the world?

I’m sure there might be some inside MLSE who hope this lawsuit bears fruition.

You could probably say the same for the original six and perhaps a handful of others.

As the Toronto Star says “The question for the individual teams is if they would be able to find a market for selling their rights beyond the boundaries of their local market. Surely, not every team would, but most owners probably wouldn’t mind finding another revenue stream that they can solely control.”

Television rights and blackouts have always been a course of contention, no more so than recently in Europe and my home in the UK, where we face average television coverage but also blackouts on our equivalent internet NHL package in the form of Game Center Live.

The NHL are putting a brave face on the situation with Bill Daly, the NHL’s deputy commissioner, quoted as saying that the NHL remains “confident of ultimately prevailing on the merits,” despite losing their motion to dismiss the case.

The impact of this case could well have a major impact on the NHL and the television rights moving forward and I imagine it’ll be a long drawn out affair with so many complex issues and laws to consider.

 

 

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