A high-profile lawsuit that could have increased consumer protections was shot down by the Supreme Court. “The justices by a 6-3 vote overturned a state ruling and threw out a class-action lawsuit against DirecTV over its termination fees for customers who canceled its service,” the Los Angeles Times reported. “The high court said the Federal Arbitration Act calls for honoring arbitration agreements that are written into company contracts, regardless of whether there are more consumer-friendly protections set by states such as California.”

The case against the El Segundo-based company had been working its way up the judicial ladder for years. “The dispute began in 2008 when a former DirecTV customer sued the satellite TV provider in Los Angeles Superior Court, alleging it had violated several California laws when it charged cancellation fees,” the Los Angeles Business Journal noted.

Unlikely divide

Justices split along highly unorthodox lines, with dissents penned by Clarence Thomas and Ruth Bader Ginsburg (Sonia Sotomayor joining). While Ginsburg and Sotomayor challenged the notion that arbitration agreements such as DirecTV’s could be treated as contractual agreements between equals, Thomas insisted, as he has in the past, that the Federal Arbitration Act does not apply in state disputes.

Remarkably, Justice Steven Breyer — known as one of the court’s most liberal justices — wrote the decision for the majority, drawing swift fire from anti-corporate crusaders. “What SCOTUS essentially said today is whenever ‘arbitration’ is mentioned by a corporation — whether it defies state jurisprudence, fundamental fairness, or what the state’s courts rule — the Federal Arbitration Act will shield them,” wrote Consumer Watchdog president Jamie Court at The Huffington Post.

The majority’s decision reinforced recent rulings. “The action continues the court’s string of rulings that cut back on class-action suits and strengthens the power of companies to insist that consumer complaints must be settled by arbitration, which is generally seen as more advantageous for businesses,” the Washington Post reported.

Legal twists

The fees charged by DirecTV had drawn sharp criticism and scrutiny. In an extraordinary move, the company had slapped consumers with “cancellation fees” of up to $480, often seizing the money by charging it to a credit card or even withdrawing it directly from a bank account, all without the customer’s permission, according to Consumer Watchdog, a plaintiff in the case.

“The ruling surprised the lawyers who brought the litigation because DirecTV’s contract left it to ‘the law of your state; to decide whether the arbitration clause applied, and the California Court of Appeal had ruled in this case that DirecTV’s arbitration clause was illegal and therefore unenforceable under California contract law,” Consumer Watchdog noted in a release.

“Indeed, DirecTV initially acknowledged in the California court that its arbitration clause did not apply to the lawsuit,” Consumer Watchdog added, “but later changed its mind after the U.S. Supreme Court issued a 2011 ruling, Concepcion v. AT&T, that requires American courts to honor virtually all arbitration clauses that corporations insert into the fine print of lengthy contracts most consumers never read.” That case was closely divided, with four justices — including Breyer himself — dissenting.

Notably, DirecTV was recently acquired by AT&T for nearly $50 billion, with the telecom giant planning to phase out the DirecTV brand, according to the Wall Street Journal. DirecTV’s business practices have gotten it into trouble before. Its recent “creepy Rob Lowe” ad campaign “ran afoul of the National Advertising Review Board as being misleading,” the Journal observed. Critics have also noted that DirecTV has hiked rates “on the heels of AT&T raising prices for AT&T U-Verse customers,” as DSL Reports noted.

“Several DirecTV users this week wrote in to say they’ve been receiving emails from DirecTV directing them to this memo and pricing detail sheet posted to the DirecTV website. The website and email note that most base packages, channel bundles, and premium channels will be seeing price hikes ranging from $2 to $8 per month.”

But the fact that the teams see no trouble in coming up with $850 million apiece seems likely to make San Diego and Oakland voters more opposed to subsidizing billionaire team owners than ever. So does the fact that Walton family member Stan Kroenke, who owns the eager-to-move St. Louis Rams, is preparing to build a $1 billion-plus stadium of his own in Inglewood without public dollars — and with the blessing of city officials who are putting the project on a fast track, bypassing environmental laws.

The deal accepted by Santa Clara County voters in 2010 limiting the subsidies for the 49ers’ new $1.2 billion Levi’s Stadium seemed a good deal at the time; the highest estimate of direct subsidies for the project CalWatchdog.com could find is $156 million. After what’s happened in recent years, that deal doesn’t look so good anymore.

Live sports are gold for TV networks

That’s because the economics of sports have changed since the 49ers’ deal was negotiated. Whether they move or not, the Chargers and Raiders have much less to back up their argument that they would face a “competitive disadvantage” by going without the subsidies that pro teams have traditionally demanded for new stadiums and arenas. They understand that franchise ownership is more beneficial than ever in an era in which live sports are the most consistent way to build a big real-time audience on TV and online.

For the 2014 season, TV networks paid more than $5.5 billion to the NFL. After some league and player pension expenses are paid, the rest of the TV money and other revenue is divvied up among the 32 teams. The $188 million each team got in 2014 was up at least 20 percent from 2013.  Teams are likely to get even more money in coming years. In October, when DirecTV renewed its contract with the NFL, it increased its annual payment from $1 billion to $1.5 billion.

The National Basketball Association and Major League Baseball are enjoying similar huge gains in TV rights payments. Teams in those sports benefit both from national TV fees and local deals with cable companies.

Cable TV bills swell due to sports fees

This double revenue stream explains why the Dodgers sold for a record $2.15 billion in 2012 and the Clippers sold for a record $2 billion in 2014.

Only franchises in the New York City metropolitan area are likely to do better than the 20-year, $3 billion deal the Lakers struck with Time Warner Cable in 2011 to build two regional cable TV networks around the team; and the 25-year, $8.5 billion deal the Dodgers signed with Time Warner in 2013 to set up a dedicated cable channel built on the team’s preseason and regular-season games.

These TV costs, of course, are passed along to consumers via sky-high cable TV bills — something Californians already complain about. When residents put two and two together and realize that pro sports are already hitting their pocketbooks in their cable bills, they may be even less enthusiastic about conveying money to billionaire team owners to help build stadiums.

For these reasons and more, Levi’s Stadium could be the last publicly subsidized pro sports stadium in California.