American Needle Clobbers the NFL

As updated earlier, the US Supreme Court today ruled 9-0 in favor of American Needle in its case against the National Football League. The case originated some ten years ago, when American Needle negotiated the merchandising rights with an NFL team. The National Football League then negotiated and signed a merchandising apparel agreement with Reebok, that gave Reebok the exclusive right to manufacture and sell the merchandising apparel for all 32 teams. American Needle then filed suit in Chicago, arguing that the NFL violated the Antitrust Laws as it applied to the teams within the league. Antitrust laws were enacted to prevent entities from working together in an effort to limit competition or place restraints on trade. American Needle argued that the teams within the NFL were actually individual entities, acting together within the structure of the NFL, and therefore, and efforts by the league to place restrictions or act on behalf of all the teams violated the antitrust laws because the teams were then colluding to limit competition. The NFL argued that the National Football League was one single entity, with 32 members, and as a result, the league could negotiate on behalf on all of the teams without violating these antitrust laws. Ultimately, the court ruled in favor of American Needle, and decided that the NFL is actually comprised on 32 different entities. What was strange about this case was not only the 9-0 vote by the US Supreme Court, which rarely happens due to the different views and opinions by the Justices, but also that the NFL had previously scored two victories in this case in the courts before the Supreme Court.

A lot has been made about how this ruling not only applies to the National Football League, but to other sports as well. Had this ruling been in favor of the NFL, fans could have seen the effects of it in their wallets. Not only could the NFL have fixed merchandising costs, which would be much higher without there being competition to drive costs down, it could have gone much further, such as the NFL fixing ticket prices to help increase revenue. Other major sports were keeping their eye on this case as well, for the reasons just laid out. It would have given the other leagues much more authority and opportunity to act on behalf of all the teams within the league, and ultimately do what was best for the league, and not necessarily what was best for the players or fans.

Click here and here for an ESPN.com and SI.com column on what this ruling means to the NFL, as well as players, unions, and fans.