American Needle v. NFL
In a decision with far-reaching consequences, the Supreme Court has ruled unanimously in favor of plaintiff American Needle in its antitrust lawsuit against the NFL. The origins of the lawsuit stem from 2000 when American Needle lost its contract to make officially-licensed NFL hats when the NFL signed an exclusive licensing contract with Reebok. Throughout the lawsuit’s circuitous course through the court system, American Needle has sustained that the NFL’s actions violated antitrust laws because the league acted as a single entity, while American Needle contended that the league should be recognized as 32 separate teams. In explaining the Court’s decision, Associate Justice John Paul Stevens said: “To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks.”
Previous to the ruling many observers expected the Supreme Court to reaffirm the decisions of the lower courts that were favorable to the NFL. Now, American Needle’s claim goes back to the federal district court in Chicago, where the case will resume.
Although the Court’s ruling dealt a blow to the antitrust exemption the NFL was seeking, the league was reluctant to appear defeated. In a statement released after the decision, the NFL said: “The court noted that the NFL teams’ shared interest in making the league successful and cooperating to produce NFL football provide ‘a perfectly sensible justification for making a host of collective decisions.” On the other hand, the president of the NFL Player Association, DeMaurice Smith had this to say: “Today’s Supreme Court ruling is not only a win for the players past, present and future, but a win for the fans.”
How can the Court’s ruling be interpreted as “a win for the fans“? With the league acting as a single entity fans could have expected to face rising prices for tickets, television packages and team merchandise including, presumably, even team fabrics. With the league viewed as 32 separate teams, the fans retain a bit more leverage. The Supreme Court’s ruling also makes a lockout in 2011 less likely, since the owners now face the prospect of antitrust litigation on any lockout. That means that there is potentially more for the owners, and thus the league, to lose during a lockout than previously thought. And with no 2011 work stoppage, you’ll be able to see your favorite team play every Sunday.
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