In an opinion today, Judge Scheindlin largely denied a motion to dismiss a case alleging that it is anticompetitive for Major League Baseball and the National Hockey League to generally allow the broadcast of out-of-market games only as part of all-or-nothing packages, like MLB Extra Innings or NHL Center Ice:
Plaintiffs allege that the Leagues’ arrangements define the territory in which each individual team may televise its games, meaning that individual clubs are prohibited from telecasting their baseball and hockey games outside the designated home territory, irrespective of consumer demand for those games . . . In other words, the agreements result in an arrangement by which the clubs have authority over the output of their own games in their home territory, but must “forego their own output” outside their home territory and cede to the Leagues’ authority over out-of-market games. As numerous courts have recognized, “a horizontal agreement that allocates a market between competitors and restricts each company’s ability to compete for the other’s business may injure competition.” . . . . Plaintiffs have adequately alleged harm to competition with respect to the horizontal agreements among individual hockey and baseball clubs, as part of the NHL and MLB, to divide the television market. Making all games available as part of a package, while it may increase output overall, does not, as a matter of law, eliminate the harm to competition wrought by preventing the individual teams from competing to sell their games outside their home territories in the first place.