BroadwayJ667 Posted May 24, 2010 Share Posted May 24, 2010 The U.S. Supreme Court has ruled that the National Football League can be considered 32 separate teams, rather than one big business, with respect to selling NFL merchandise. The Court's unanimous ruling reversed a lower court ruling that threw out an antitrust suit brought against the league by American Needle, which used to make NFL-approved hats. "Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned," Justice John Paul Stevens wrote. American Needle sued the league after losing the hat contract to Reebok, saying the league violated antitrust law when all 32 of its teams worked together to go with Reebok and keep American Needle out of the NFL hat business. Now the lawsuit will go back to district court. -PFT Huge news out of DC this morning, as the Supreme Court overturned a ruling that would have given the NFL an effective antitrust exemption. Let's look at what this means for the sporting landscape. In 2002, the NFL signed a deal with Reebok, giving them the exclusive right to make NFL-licensed apparel. American Needle, which had produced NFL merchandise for more than 50 years, sued the league, claiming that it was a violation of antitrust laws. Their argument was that all 32 teams acted together to monopolize the licensing of merchandise. The NFL's argument was that the league doesn't consist of 32 separate teams, but rather a single organization. A district court had sided with the NFL, throwing out American Needle's case. They appealed to the highest court, and, in an unusual move, the NFL also asked for a Supreme Court ruling. It was clear they wanted a more sweeping ruling that would give them what amounted to an antitrust exemption. They didn't get it. Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned," Justice Stevens wrote. In a 9-0 decision, the Court overturned the district court ruling. Here's what it means for everyone involved. American Needle doesn't actually score a victory here, at least, not yet. The case merely returns to district court, where it will be reconsidered under what's called the "Rule of Reason." A doctrine dating back to Standard Oil, it states that monopolies aren't inherently illegal, only if they "unreasonably" restrain trade. That's still up for debate with the NFL's licensing deals, and the Supreme Court gave no indication on that one way or another. The NFLPA wins big. They had been terrified of a league with unchecked power to act unilaterally in labor issues, especially with an expiring CBA. Not that the player's union is particularly powerful as is, but at least the league won't be able to dictate salaries, free agency conditions and age restrictions without getting into the CBA first. If the NFL had won this case, those would all have been very real possibilities. The NFL doesn't so much lose as they fail to win. The league had been hoping for that antitrust exemption, which would have been a hammer to bring down in myriad smaller cases against the league. It would have given them sweeping powers enjoyed by no other business other than Major League Baseball. Now, those other cases proceed on their own merits. Other sports leagues are not happy right now. Both the NBA and NHL filed amicus briefs in support of the NFL, hoping the precedent would give them more powers. With the NHL recently having to bail out a handful of teams, and a labor stoppage looming for the NBA, it could have been big. NASCAR, MLS, and most chillingly, the NCAA also publicly supported the NFL. Baseball, on the other hand, still enjoys the country's only antitrust exemption, dating back to a 1922 ruling that's considered curious today. There's no indication the High Court would revisit that ruling, but should it be challenged there's certainly a precedent for it now. A limited one, however; American Needle v. NFL appears to apply specifically to merchandising. Reebok, and, yes, the Madden series of video games, along with every company that has exclusive licensing deals with the league, could be the biggest losers. The NFL is a money factory, and even given the huge payments for exclusive rights, everyone selling NFL products are making out like bandits. Should the district court find the league in violation of antitrust laws, the field would be open again for other manufacturers. Any final decision is still a ways off, but NFL 2K12 is now a distinct possibility. -Deadspin Link to comment Share on other sites More sharing options...
BroadwayJ667 Posted May 24, 2010 Author Share Posted May 24, 2010 Reebok, and, yes, the Madden series of video games, along with every company that has exclusive licensing deals with the league, could be the biggest losers. The NFL is a money factory, and even given the huge payments for exclusive rights, everyone selling NFL products are making out like bandits. Should the district court find the league in violation of antitrust laws, the field would be open again for other manufacturers. Any final decision is still a ways off, but NFL 2K12 is now a distinct possibility. -Deadspin Oh HELL YEAH. Link to comment Share on other sites More sharing options...
GodWearsAGrayHoodie Posted May 24, 2010 Share Posted May 24, 2010 I think a strong case can be made that the video games are different than apparel. There is no compelling reason why the same hat company needs to make the hats with the Jets logo and the Patriots logo, and so there is a compelling case to say each team should negotiate licensing the team apparel separately. OTOH, having some of the teams license their image to one video company and other teams to a different game would create two or more really sucky games as you could only play against a subset of other teams so the NFL could make a really good case that that should be licensed NFL wide, even if hats and shirts aren't allowed to be licensed NFL wide. Link to comment Share on other sites More sharing options...
Matt39 Posted May 24, 2010 Share Posted May 24, 2010 Maybe the Cowboys will go back to Apex Link to comment Share on other sites More sharing options...
uart Posted May 25, 2010 Share Posted May 25, 2010 I know a little something about antitrust law... I'm mildly surprised. Link to comment Share on other sites More sharing options...
Thai Jet Posted May 25, 2010 Share Posted May 25, 2010 Maybe the Cowboys will go back to Apex They've always seem to go their own way Link to comment Share on other sites More sharing options...
Thai Jet Posted May 25, 2010 Share Posted May 25, 2010 I know a little something about antitrust law... I'm mildly surprised. A 9-0 shutout no less. Link to comment Share on other sites More sharing options...
rillo Posted May 25, 2010 Share Posted May 25, 2010 American Needle hats suck. Link to comment Share on other sites More sharing options...
The Gun Of Bavaria Posted May 25, 2010 Share Posted May 25, 2010 Sotomayor must have been under the bench sucking the guys off to get a 9-0 decision. That court is like the rest of the country, divided. Link to comment Share on other sites More sharing options...
Bob Posted May 25, 2010 Share Posted May 25, 2010 Sotomayor must have been under the bench sucking the guys off to get a 9-0 decision. That court is like the rest of the country, divided. That's Alito's job. The 9-0 decision just shows how clearly wrong the lower court decision was. It's about time some of these trusts got busted. Link to comment Share on other sites More sharing options...
GodWearsAGrayHoodie Posted May 25, 2010 Share Posted May 25, 2010 Sotomayor must have been under the bench sucking the guys off to get a 9-0 decision. That court is like the rest of the country, divided. 9-0 are actually quite common, they just make the news less often than the 5-4's. Link to comment Share on other sites More sharing options...
JerryK Posted May 25, 2010 Share Posted May 25, 2010 OK MAX...I'm gonna say it again, but you keep ignoring me... Link to comment Share on other sites More sharing options...
rillo Posted May 25, 2010 Share Posted May 25, 2010 Sotomayor must have been under the bench sucking the guys off to get a 9-0 decision. That court is like the rest of the country, divided. Link to comment Share on other sites More sharing options...
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