Laumann v. National Hockey League
907 F. Supp. 2d 465
S.D.N.Y.2012Background
- Plaintiffs allege NHL and MLB, their clubs, RSNs, and MVPDs conspired to partition live baseball/hockey video markets, restricting Internet and TV distribution and imposing blackouts.
- Leagues centralize distribution rights outside home territories through exclusive territorial agreements with clubs and RSNs.
- In-market telecasts are produced by clubs with RSNs; MVPDs distribute these within territories and enforce blackouts.
- Out-of-market packages (TV: Center Ice/Extra Innings; Internet: Gamecenter Live/MLB.TV) require all-out-of-market games, limiting single-game access and competition.
- Plaintiffs contend these agreements reduce output, raise prices, and diminish consumer choice in live game presentation.
- Court analyzes antitrust standing, Section 1 restraints (in-market and out-of-market), and Section 2 conspiracy claims, dismissing some claims and allowing others to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Antitrust standing governing claims | Television plaintiffs have Illinois Brick exceptions (ownership/control or co-conspirator) making them proper | Illinois Brick direct-purchaser rule bars indirect purchasers; standing lacking for many | Illinois Brick exceptions apply; some TV plaintiffs have standing; others dismissed; efficiency factors favor TV plaintiffs |
| In-market and out-of-market restraints governing Section 1 | Leagues and RSNs unlawfully divide markets, restraining trade in both in-market and out-of-market distributions | Market divisions are necessary to organize sports rights and may be justified by efficiency/competitive balance | Allegations plausibly show market division restraints under the rule of reason; not per se lawful; claims survive |
| Section 2 conspiracy to monopolize the market for video and Internet streaming | NHL/MLB monopolize live game programming and restrict competition via exclusive platforms | Leagues’ joint ventures are legitimate; no proven conspiracy to monopolize | Section 2 claim dismissed against RSNs and MVPDs; may proceed against League defendants |
| Harm to competition and standing under Associated General Contractors | Market division harms consumers via reduced output and higher prices | Output coordination may be essential for product availability; no clear harm to competition | Harm to competition adequately alleged for in-market/out-of-market agreements; standing favoring efficient enforcers |
Key Cases Cited
- American Needle, Inc. v. National Football League, 560 U.S. 183 (2010) (rule of reason analysis and unity of purpose concepts in joint ventures)
- NCAA v. Board of Regents of Univ. of Okla., 468 U.S. 85 (1984) (antitrust scrutiny of league plans to restrict broadcasting)
- Salvino v. MLB, 542 F.3d 290 (2d Cir. 2008) (rule of reason analysis for League rights and licensing within Salvino framework)
- Brantley v. NBC Universal, Inc., 675 F.3d 1192 (9th Cir. 2012) (output and tying analogies; when discussed in sports context)
- Dagher v. United States, 547 U.S. 1 (2006) (antitrust standing and hub-and-spoke conspiracy considerations)
- Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007) (per se vs. rule of reason analysis framework)
- Interstate Circuit, Inc. v. United States, 306 U.S. 208 (1939) (acceptance of participation in unlawful plan establishes conspiracy)
- Board of Regents of Univ. of Okla. v. NCAA, 546 F. Supp. 1276 (W.D. Okla. 1982) (market testing for NCAA-telecast restraints and output effects)