U.S. Supreme Court

NFL Fumbles; Unanimous Supreme Court Allows Antitrust Suit over Merchandise Marketing

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The U.S. Supreme is allowing an Illinois company to bring an antitrust challenge to the National Football League’s exclusive marketing agreement with Reebok for caps with trademarked isignias.

The decision was a defeat for the NFL and a victory for American Needle, the company that lost its contract with the league, the New York Times reports. According to SCOTUSblog, the ruling applied only to the marketing venture and not to other collective action by the NFL.

The unanimous opinion (PDF) by Justice John Paul Stevens sought to ease anxiety, SCOTUSblog says.

“Football teams that need to cooperate are not trapped by antitrust law,” Stevens wrote. “The fact that NFL teams share an interest in making the entire league successful and profitable, and that they must cooperate in the production and scheduling of games, provides a perfectly sensible justification for making a host of collective decisions. But the conduct at issue in this case is still concerted activity under the Sherman [Antitrust] Act” that is subject to analysis under Section 1 of the statute.

The NFL had argued it was a single entity, and it can’t be accused of conspiring with itself to violate the antitrust laws.

But Stevens noted there are 32 teams in the NFL, and said they are not a single entity with respect to marketing of team merchandise, report USA Today and the New York Times. Even though the teams have common interests in promoting the NFL brand, “they are still separate, profit-making entities, and their interests in licensing team trademarks are not necessarily aligned,” Stevens said.

Sen. Patrick Leahy, D-Vt., issued a statement calling the decision “a rare win for sports fans, and in fact for all Americans who value competition in the marketplace.”

The case is American Needle v. National Football League.

Prior coverage:

ABA Journal: “A League of Their Own”

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