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Tuesday, October 21, 2014

NFL Loses Antitrust Case

The NFL missed out on what could have been a huge money-maker for the league this morning and given them a tremendous amount of power with not only licensing and apparel deals; but also labor negotiations.  The Supreme Court ruled 9-0 to overturn a district court decision that had ruled that the NFL was a single organization, not 32 separate organizations (its teams).  Here is what Justice Stevens of the Supreme Court said in lieu of the decision:

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.”

The issue dated back to 2002, when American Needle — a company that had produced NFL merchandise for over 50 years — sued the NFL claiming its exclusive deal with Reebok was a violation of antitrust laws and a result of 32 teams monopolizing the licensing of merchandise.  Deadspin, which created a detailed account of what the Supreme Court decision could mean, points out that the decision to call the NFL a collection of seperate entities could have ramifications for the NFLPA, as well as all companies who have licensing deals with the NFL.  Here are a few snip-its from the Deadspin piece that outline the trickle down affect that could be felt as a result of the Supreme Court ruling:

The NFLPA wins big. They had been terrified of a league with unchecked power to act unilaterally in labor issues, especially with an expiring CBA. Not that the player’s union is particularly powerful as is, but at least the league won’t be able to dictate salaries, free agency conditions and age restrictions without getting into the CBA first. If the NFL had won this case, those would all have been very real possibilities.

Other sports leagues are not happy right now. Both the NBA and NHL filed amicus briefs in support of the NFL, hoping the precedent would give them more powers. With the NHL recently having to bail out a handful of teams, and a labor stoppage looming for the NBA, it could have been big. NASCAR, MLS, and most chillingly, the NCAA also publicly supported the NFL.

Reebok, and, yes, the Madden series of video games, along with every company that has exclusive licensing deals with the league, could be the biggest losers. The NFL is a money factory, and even given the huge payments for exclusive rights, everyone selling NFL products are making out like bandits. Should the district court find the league in violation of antitrust laws, the field would be open again for other manufacturers. Any final decision is still a ways off, but NFL 2K12 is now a distinct possibility.

Source:
Supreme Court Rules Against NFL In Antitrust Case: What It All Means [Deadspin]



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