In a preemptive move intended to secure independence from antitrust law, the NFL is asking the Supreme Court to affirm an appellate court decision in which the appellate court sided with the League.    

The case involves a challenge from American Needle, a company that manufactured apparel for the NFL up until the League signed an exclusive supplier contract with Reebok in 2000.  The most important issue here is whether certain business activities within professional sports leagues are insulated from antitrust scrutiny, such as pooling the trademark rights of its member clubs and then collectively licensing them to the highest bidder.  If the Supreme Court affirms the ruling, it could give rise to a backhanded argument by all professional sports that teams are not subject to antirust law.

A major reason why the NFL filed an appeal to reaffirm a case they won below is because, as Tulane Law School Sports Law Director Gabe Feldman so accurately states, “the Seventh Circuit’s decision conflicted with nearly every other court’s determination that sports leagues are not single entities.”  So basically, now that a court finally ruled in the NFL’s favor, the League is trying to get an endorsement from the High Court in an effort to finally be rid of any future lawsuits.

As sports law guru Gary Roberts simply states, the NFL seems to think that the current make up of the Supreme Court could secure the League a favorable ruling, thereby settling the issue of whether the NFL acts as a single entity, which would mean it is not subject to the antitrust laws.  “Even though they [the NFL] risk losing this case [by appealing it], the potential gain for all sports leagues from having the Supreme Court affirm the decision would be huge.”

The NBA and NHL both filed briefs in support of the NFL. However MLB did not file anything because it is the only professional sport to be exempt from antitrust law, which prohibits any contract that restrains trade.

The Supreme Court is expected to decide whether to hear the case as early as next week. Allowing another court to interpret antitrust law as applied to the NFL is certainly a gamble considering the Court could easily side with American Needle, who does have on its side a large body of law that says traditionally structured sports leagues cannot avoid antitrust liability through a single entity structure. Years of case law illustrate this point. As Rutgers School of Law Professor Marc Edelman points out, between 1982 and 2006, the NFL and its franchises have raised the single-entity defense on seven different occasions, and the reviewing court rejected this defense each time. Will this eight time be the charm?

Comments (0)

Subscribe to this comment's feed