The National Hockey League lost a court motion last week that would have dismissed a case brought by six fans who claim the league’s restrictions on local television broadcasts are non-competitive.
According to TSN.ca, the case is expected to go to trial early next year and a loss for the NHL could dramatically alter the way the league handles its TV rights.
The suit was filed in New York two years ago by a group of unhappy fans who claimed the restrictions on broadcasting served to artificially inflate the price of sports cable television packages.
One of the plaintiffs, a Florida man named Thomas Laumann, said that as a fan of the New York Islanders he should not be locked into either purchasing a full out-of-market package to get games for one team or be forced to subscribe to paid channels to watch Islanders games against the Florida Panthers and Tampa Bay Lightning, which are blacked out through NHL’s Gamecenter Live in his area.
The suit also takes issue with the NHL’s $179.80 for its full-season offering of games known as NHL Center Ice, which also black out in-market games.
Lawyers for the plaintiffs are expected to spend the next few months asking to get the case considered as a class action.
If that is approved, every customer of NHL Center Ice in the U.S. would become a plaintiff.
If the litigation is successful, it could lead to teams with national followings such as the Detroit Red Wings or Chicago Blackhawks being able to sell TV rights outside of their local markets.
Documents from 30 years ago by former NHL president John Ziegler are at the heart of the plaintiffs’ case. At that time, some teams in the league were upset that larger rivals were selling TV rights outside of their own markets.
Ziegler wrote in 1984 that preventing teams from selling their TV rights would be anti-competitive.
However, the league reversed itself in 1985 under pressure from then-fledgling cable sports channel ESPN, which would only pay a lucrative rights fee if teams were prevented from competing with them for national TV rights.
In the ruling, the judge wrote:
“Plaintiffs have carried their initial burden of showing an actual impact on competition. The clubs have entered into an express agreement to limit competition. There is also evidence of a negative impact on the output, price and perhaps even quality of sports programming.”
The NHL is defending the case in conjunction with Major League Baseball, which is facing similar claims over local TV rights.