This morning, I provided an overview of the settlement announced yesterday in the Garber v. Office of the Commissioner of Baseball lawsuit challenging Major League Baseball’s broadcasting policies under federal antitrust law. As I noted at the time, details regarding the precise terms of the deal were not yet available, as the official settlement agreement had not yet been released. Instead, this morning’s post relied on a brief announcement from the plaintiffs’ attorneys highlighting some of the key terms of the deal.
Earlier this afternoon, the plaintiffs filed the official proposed settlement in court. So we now know all of the terms of the tentative agreement. And while this morning’s piece covered most of the major details, there were a few more potentially noteworthy items included in the document filed with the court today.
First, the official settlement does place some restrictions on MLB’s ability to raise the price of both its single-team and league-wide MLB.TV packages in the future. Specifically, after setting the price of these service options at $84.99 and $109.99, respectively, for 2016, the agreement specifies that the league may only raise the price of these packages by no more than 3%, or that year’s inflation rate, whichever is greater.
So barring a major spike in inflation, MLB will only be able to raise the price of its MLB.TV packages by a few bucks per year until the settlement agreement expires following the 2020 season.
Second, the settlement also includes provisions covering the MLB Extra Innings cable/satellite service. In particular, MLB has agreed to give cable and satellite providers the option to sell single-team Extra Innings packages, should they wish to do so. While these providers aren’t obligated to offer a single-team service under the terms of the settlement, if they do elect to do so then they must offer packages for all 30 teams, and not just the league’s most popular clubs.
Third, although not directly eliminating MLB’s blackout policy, the settlement does try to provide some relief to what it terms “Unserved Fans.” Specifically, anyone who is completely unable to receive cable or satellite television service at their home will now be able to petition MLB for the ability to stream in-market games via MLB.TV.
To be clear, this provision is pretty limited. It only covers those who can’t subscribe to cable at all, and does not apply to those fans who are simply unable to subscribe to a particular RSN via their local cable provider. So this new option won’t help fans in Iowa or Las Vegas who often find themselves blacked out from as many as five or six games per night.
It’s hard to say exactly how many people will qualify as an “unserved fan” under the settlement’s definition, but needless to say the number is probably pretty low. So although the settlement does try to provide relief to some fans affected by MLB.TV blackouts, this measure won’t help most of those subject to the league’s blackout policy.
Finally, the settlement provides that MLB, Comcast, and DirecTV will pay the plaintiffs’ attorneys $16.5 million in legal fees.
All in all, then, the Garber settlement fairly closely follows the model established last year by the National Hockey League’s settlement of an analogous lawsuit. Unlike the NHL settlement, however, the plaintiffs’ attorneys in the MLB case were able to wring a few extra concessions out of the league, most notably the “Follow Your Team” option (discussed here) and the “Unserved Fan” option discussed above.
As a result, although the settlement certainly won’t satisfy those who were hoping that the suit would eliminate MLB’s blackout provisions entirely, it does provide some new and potentially valuable benefits to many baseball fans.
Nathaniel Grow is an Associate Professor of Business Law and Ethics at Indiana University's Kelley School of Business. He is the author of Baseball on Trial: The Origin of Baseball's Antitrust Exemption, as well as a number of sports-related law review articles. You can follow him on Twitter @NathanielGrow. The views expressed are solely those of the author and do not express the views or opinions of Indiana University.