NFL ‘Single Entity’ Supreme Court Case Begins Wednesday
While the Federal Court in California enters day 3 of the Prop 8 case tomorrow (today now, on the east coast), the Supreme Court will begin hearing American Needle v. NFL, a case to determine if the NFL can act as a single-entity representing its 32 teams for licensing agreements (as it did with the endorsement deal granting Reebok exclusive rights in 2001.)
The simple, elementary issue to be resolved is whether the NFL is permissible to do so or if it violates laws established under the Sherman Act for restricting competition. The argument for American Needle, supported by each major sport’s player’s association and Drew Brees (see below), in simple form, again, is that each team in the NFL is at fierce competition with each other in so many capacities, and that competition, and the free-market competition in which it operates, should be extended to licensing agreements for their brands. Further, that each team is individually owned and operated. They argue that allowing the NFL to operate as a single-entity for licensing grants monopoly power that is unnecessary, unwarranted, and strips the freedom to make individual brand licensing agreements from each team.
I tend to agree. In many ways, major sports leagues do need some protection from antitrust suits; however, that protection should not extend to areas where the competitive business arena is sufficient. Areas where teams must agree to cooperate, or act as a single entity, in order for the league to function does not include licensing agreements.
I have read various news reports on the importance of this case: some say it is monumental for how all major sports leagues will function; others downplay it. Forbes says: “Many are hyping the upcoming Supreme Court case as the biggest in sports history. Don’t believe it.” Contrarily, the Sports Business Journal (Daily) reports: “American Needle is suing the NFL for antitrust law violations, and the apparel company contends that its case ‘could have a sweeping effect on the sport’s relationship with its players.’”
As I mentioned earlier, each player’s association is siding with American Needle. You can read the amicus brief the NFLPA, MLBPA, NBAPA, and NHLPA jointly filed to the Supreme Court here (note: it’s 52 pages long and mostly just talks about how the teams in the leagues compete in countless areas and should also be allowed to with apparel and other licensed goods.)
One of the most interesting developments of this story was Drew Brees throwing his hat in the ring by offering his opinion in an article for the Washington Post. As an NFLPA Executive Committee member, you can imagine which side he’s on. Very rarely do athletes take such a bold stand (Scott Fujita, another Saint, rocked the boat a bit with his support of gay rights earlier this year: read more if you missed it), especially in direct opposition against the NFL. If the Saints get bad calls this weekend, I’m calling shenanigans on the entire integrity of NFL refereeing.