Baseball, hockey leagues lose ruling in broadcast antitrust case

NEW YORK Fri Aug 8, 2014 4:27pm EDT

NEW YORK Aug 8 (Reuters) - A federal judge rejected an effort by Major League Baseball, the National Hockey League, Comcast Corp and DirecTV to dismiss a lawsuit by fans unhappy about restrictions on watching their favorite teams play.

Friday's decision by U.S. District Judge Shira Scheindlin in Manhattan moves the antitrust lawsuit closer to a possible trial that examines restrictions on how games are broadcast.

"We are obviously pleased," Ned Diver, a lawyer for the plaintiffs, said in a telephone interview. "We don't view it as a surprise that the court simply accepted that the leagues and their media partners are subject to the antitrust laws."

A DirecTV spokesman said the company does not discuss pending litigation. Comcast and the sports leagues did not immediately respond to messages seeking comment.

At issue were agreements that limit where certain games can be broadcast, which consumers say result in "anticompetitive blackouts."

Typically, regional sports networks have exclusive rights to broadcast professional baseball and hockey games in their home markets, but cannot broadcast those games elsewhere.

Sports fans, however, complained that this lets professional sports leagues charge premium prices to watch games outside home markets - for example, if a San Francisco resident wanted to watch the New York Yankees.

Scheindlin rejected an argument by Major League Baseball that it was protected from antitrust claims under an exemption it received from the U.S. Supreme Court in 1922, saying the exemption did not extend to contracts for broadcasting rights.

The judge also rejected arguments by both leagues that the broadcasting restrictions had "pro-competitive" justifications, such as offering incentives for clubs to build local fan bases.

She said "consciously depriving consumers of out-of-market games they would prefer" is generally not "a permissible aim under the antitrust laws."

Comcast and DirecTV argued they should not be liable because they had no role in creating the restrictions.

But Scheindlin found enough evidence that the companies defended the broadcast structure, and were "more than passive participants."

The cases are Laumann et al v. National Hockey League et al, U.S. District Court, Southern District of New York, No. 12-01817; and Garber et al v. Office of the Commissioner of Baseball et al in the same court, No. 12-03074. (Reporting by Andrew Longstreth. Editing by Andre Grenon)

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