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NFL loses bid for antitrust protection

Tuesday, May 25, 2010
 

The Supreme Court rejected the NFL's request for broad antitrust law protection Monday, saying that it must be considered 32 separate teams — not one big business — when selling branded items such as jerseys and caps.

"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," said the retiring Justice John Paul Stevens, writing for an unanimous court.

The high court reversed a lower court ruling that threw out an antitrust suit brought against the league by one of its former hat makers, who was upset that it lost its contract for making official NFL hats to Reebok International Ltd.

American Needle, Inc. sued, claiming the league violated antitrust law because all 32 teams worked together to freeze it out of the NFL-licensed hatmaking business and gave Reebok an exclusive 10-year license.

The company lost and appealed to the Supreme Court, but the NFL did as well, hoping to get broader protection from antitrust lawsuits.

NFL spokesman Greg Aiello noted that the American Needle case still has to be tried in federal court in Chicago.

"We remain confident we will ultimately prevail because the league decision about how best to promote the NFL was reasonable, pro-competitive and entirely lawful," Aiello said.

Matt Mitten, director of Marquette's National Sports Law Institute, agreed with the prediction.

"It's very likely American Needle will lose," he said. "It's still going to be very difficult to sue the NFL or any other sports league on antitrust grounds."

Fans "should expect to pay the same prices for hats," said Mitten.

Major League Baseball is the only professional sports league with broad antitrust protection. The NBA, NHL, NCAA, NASCAR, professional tennis and Major League Soccer supported the NFL in this case, hoping the high court would expand broad antitrust exemption to other sports.

The NFL Players Association praised the court's decision. NFLPA lawyer Richard Berthelsen said the decision "affirms our belief that the NFL should not be allowed to operate as a monopoly to the detriment of fans, players and the government."

A ruling that the NFL was a single entity "would have been devastating to the players," said Scott Andresen, an attorney who teaches sports law at Columbia College in Chicago. "Essentially, what (that would do) is allow collusion.

"That's why single-entity is such potentially powerful weapon. In order to violate anti-trust laws, you have to conspire with another party. It's kind of like dancing with yourself. ... I think it really would have been detrimental to the labor negotiations."

A ruling in favor of the NFL "certainly would have made it much more difficult for the players associations out there," Pittsburgh-based agent Ralph Cindrich said. But he conceded the NFL is "still in a very strong position in regards to bargaining."

Steelers president Art Rooney II was traveling to Dallas yesterday for the owners meetings. Club spokesman Dave Lockett said the team had no comment on the decision.

Stevens said NFL teams directly compete on many levels. Citing the two teams in this year's Super Bowl, the New Orleans Saints and the Indianapolis Colts, Stevens said that teams compete against each other "to attract fans, for gate receipts and for contracts with managerial and playing personnel."

"Directly relevant to this case, the teams compete in the market for intellectual property," Stevens said. "To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks."

 

 
 


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