NFL’s rejection of Sunday Ticket is another big victory for small law firm

For the second time in three months, Wilkinson Stekloff has played a key role in a serious case with implications for the world of sport.

Attorney Beth Wilkinson and her team convinced a federal judge on Thursday to throw out a judgment awarding the NFL $4.7 billion in damages in a dispute over the pricing of its Sunday Ticket game-television package.

In May, the Washington law firm led a landmark $2.8 billion antitrust settlement for the NCAA that is moving toward approval. Last year, Wilkinson also beat the Justice Department in a high-profile lawsuit to save Microsoft Corp.’s $69 billion deal to acquire Activision Blizzard Inc.

“This ruling vindicates the NFL’s television distribution and litigation strategy and exposes the inconsistency of plaintiffs’ antitrust theory,” said Jodi Balsam, a law professor at Brooklyn Law School and former NFL attorney.

The NFL is facing a judgment that would have been tripled to about $14 billion under federal antitrust law. Balsam said the league can now continue operating as usual and not worry about financial obligations before the season begins.

Wilkinson Stekloff was founded nearly a decade ago by a group of Big Law alumni led by Beth Wilkinson and Brian Stekloff. Wilkinson was the NFL’s first presiding judge during the three-week Sunday Ticket trial in June. Rakesh Kilaru, another Wilkinson Stekloff partner who spearheaded the NCAA’s agreement with current and former college athletes, led the NFL’s post-trial briefing, and Stekloff argued the motion that ultimately secured the league’s victory.

The long-running Sunday Ticket dispute began when Wilkinson was still a partner at Paul, Weiss, Rifkind, Wharton & Garrison, a law firm that has maintained a close relationship with the NFL for years. Stekloff, another former Paul Weiss attorney, became a partner at Wilkinson Stekloff in 2020.

Covington on the outs

Wilkinson Stekloff’s NFL win came amid a strained relationship with his longtime outside attorney at Covington & Burling.

Covington has handled a variety of matters for the NFL, including negotiations with Sunday Ticket’s broadcast partners and early antitrust litigation. Gregg Levy, a former partner and current senior attorney at Covington who served as the NFL’s lead outside counsel for nearly three decades, was part of the team representing the league when the U.S. Court of Appeals for the Ninth Circuit revived the Sunday Ticket case in 2019.

Levy and Covington, however, were noticeably absent from the Sunday Ticket trial, although court records in the case still list him and Covington partners Derek Ludwin, John Playforth and Neema Sahni as advisers to the NFL. Ludwin was part of the Covington team that advised the NFL in December 2022 on Sunday Ticket’s new $14 billion package with Alphabet Inc.’s YouTube.

Levy was once a candidate to succeed former NFL commissioner Paul Tagliabue, a former Covington partner who was replaced by Roger Goodell in 2006. Goodell, who testified during the Sunday Ticket trial, has been working closely with league general counsel L. Jeffrey Pash, another former Covington partner who is preparing to retire after more than 25 years in the NFL.

Three sources familiar with the matter said Covington drew the NFL’s ire this year for advising Warner Bros. Discovery Inc. on the formation of Venu Sports, a new sports streaming service also backed by The Walt Disney Co.’s ESPN and Fox Corp. The formation of Venu, which hired its first legal chief in June, is facing scrutiny from federal antitrust regulators.

Covington and Warner Bros. Discovery, which recently sued the NBA over another broadcast deal announced last month, did not respond to requests for comment. Neither did the NBA, which is also a longtime client of Covington.

Drag?

Gutierrez’s ruling was a devastating defeat for the plaintiffs, led by veteran trial attorney Bill Carmody of Susman Godfrey.

The plaintiffs are expected to appeal Gutierrez’s decision, though Carmody did not respond to a request for comment. Hausfeld and Langer, Grogan & Diver are co-counsel for the plaintiffs, who survived earlier attempts by the NFL to dismiss the case before the U.S. Supreme Court declined to take it up in 2020.

While the NFL is pleased with Gutierrez’s ruling, it could still face a lengthy legal battle to resolve the Sunday Ticket issues. A federal appeals court could reinstate the ruling or send the case back for a recalculation of damages.

“We could see multiple appeals on multiple issues, and this could drag on for years to come,” said Marc Edelman, a professor of sports and antitrust law at the Zicklin School of Business at Baruch College. “This is still a case that is likely to be settled, although last night’s decision would likely reduce the fair market value of the settlement because it undermines the plaintiff’s ability to recover damages.”

The case is National Football League Sunday Ticket Antitrust Litigation, 2:15-ml-02668, United States District Court, Central District of California (Los Angeles).