Letter from AmeriKat II - American Needle v NFL (Part 2 of 2)

The Court continued to state that the teams not only competed against each other on the playing field and for the attraction of fans, but they competed in the market for intellectual property:

"To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks. When each NFL team licences its intellectual property, it is not pursing the 'common interests of the whole'league but is instead pursuing interests of each 'cooperation itself'...Decisions by NFL teams to licence their separately owned trademarks collectively and to only one vendor are decisions that 'depriv[e] the marketplace of independent centers of decisionmaking'."

The Court considered the argument advanced by the NFL that they had formed a single entity (the NFLP) and had marketed their NFL brands (picture, left - all 32 teams) through this single outlet for a long time meant that their conduct fell outside section 1. The Court did not find favor with that argument and stated that "an ongoing section 1 violation cannot evade section 1 scrutiny simply by giving the ongoing violation a name and label." Although at times the 32 teams may operate through NFLP, the teams remained "separately controlled, potential competitors with economic interests that are distinct from NFLP's financial well-being." Ouch.....The Court did recognize that professional sports organizations have to necessarily unite and cooperate for advancement of the league, but cooperation is not justification when that cooperation is so concerted as to fall foul of section 1 (page 14 of the decision).

In closing the Court recognized that while the NFL teams share an interest in making the league successful and profitable in areas like scheduling, but that it does not justify "treating them as a single entity for section 1 purposes when it comes to the marketing of the teams' individually owned owned intellectual property." The case is remanded back to the lower court for further proceedings. In light that NFL agreements are capable of violating section 1, the parties will now have to argue that the NFL-Reebok licence agreement itself is or is not an unreasonable restraint of trade.

The ruling is heralded as being great for the NFL's players. How so? Had the NFL won the case they may have been able to justify continuing to act as 'one business entity' in implementing players' and coaches' salaries collectively, rather than the current system of individual bargaining. (picture, right - Brian Urlacher of the NFL's Chicago Bears and of the AmeriKat's home state) Commentators are suggesting that the ruling could initiate the stalled labor extension talks between the National Football League Players Association (NFLPA) and NFL team owners. However, Peter King of Sports Illustrated stated that the decision may not be the champagne-popping moment for the NFLPA. For further interesting sports-centric view on the impact of the decision see this article from ESPN and Huffington Post (here).

By way of interest, the AmeriKat directs readers to compare the position of the NFL with that of the Major League Baseball (MLB) who benefit from a host of anti-trust law exemptions. God bless the American past-time!

The AmeriKat has to mention that reading Justice Stevens's clear, structured, and well-argued decision makes his upcoming retirement even more poignant. He will be much missed.