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 Against the advice of U.S. Solicitor General Elena Kagan, the US Supreme Court has granted certiorari to hear the case of American Needle v. NFL. As earlier reported, the NFL was petitioning the High Court to hear the case so the NFL could formalize the Seventh Circuit’s ruling that NFL is a single entity for certain activities and is therefore immune to antitrust scrutiny.
Here the activity being examined is the NFL’s licensing practices of team intellectual property. As Professor Gabe Feldman, Director of Tulane Law School’s Sports Law Program, explains in a great Sports Law Blog entry, the NFL is really pushing for the Supreme Court to hear this case because “[t]he NFL—and other professional sports leagues in the U.S.—have a tremendous amount to gain from the Supreme Court’s decision, but not much to lose.” The Seventh Circuit’s holding in favor of applying the single entity defense to the NFL defies the great weight of virtually all prior case law. As Feldman explains, the NFL appealed to the Supreme Court to gain an opportunity to widen this exemption and strike a victory that will negate decades of contrary authority. Feldman predicts that the NFL will now argue that “professional sports leagues are single entities for all purposes and thus should be completely exempt” from all antitrust scrutiny. In the alternative, the NFL will assert that sports leagues are single entities for all “core venture functions,” which can be virtually anything. NFL spokesman Greg Aiello reflected the League’s excitement to potentially receive antitrust immunity, “saying that the league looked forward to explaining why the [C]ourt should extend, on a national basis, favorable appeals court rulings on how antitrust laws apply ‘to the unique structure of a sports league.’” If the NFL loses the above-mentioned arguments, all that will happen is the Court will analyze the licensing issue according to traditional antitrust law, the rule of reason analysis. This happening would be commensurate with the last fifty years of case law. However, if the NFL is successful in their argument, professional sports would have carte blanche by receiving single entity protection related to methods of restricting player mobility (i.e. the draft and free agency). In effect, as Feldman bluntly states, “a broad ruling in favor of the NFL could rewrite almost all of sports antitrust law.” The business implications could be immense if the NFL manages to convince the Court to expand the Seventh Circuit’s ruling. Virtually any League decision, whether related to revenue streams, merchandising, licensing or player restraints could be defended as immune from antitrust challenge. The NFL could wield the Supreme Court’s holding as both a sword or a shield by classifying League decisions as being outright exempt or as “core venture functions” of the business and therefore insulated against antitrust challenge. Thus, the sports law world will be carefully watching this matter play out in Washington late this year or in early 2010.
 Jeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International. He can be reached at\n \n \n
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