Antitrust case could be Armageddon

coynejeremy · Jul 20, 2009

National Football League goes after big game in landmark American Needle antitrust case - ESPN

The deciders of the future of sports? These nine Supreme Court Justices (minus David Souter, and plus Sonia Sotomayor, who has yet to be confirmed) could dramatically change the landscape.

All of those scenarios, in fact, could become realities if the NFL triumphs in a case now under consideration in the U.S. Supreme Court. Experts agree that the case known as American Needle vs. NFL could easily be the most significant legal turning point in the history of American sports.
[...]
The legal doctrine at the center of the case is known as "single entity." If the NFL manages to persuade the Supreme Court that the league is a single entity competing with other providers of entertainment rather than a group of 32 separate businesses competing with each other, the landscape of the sports industry will be transformed, according to law professors and experts contacted by ESPN.com.

If it is a single unit and not 32 separate, competing teams, any violation of American antitrust law would be impossible to establish. A violation of the Sherman Act begins with a "combination, contract or conspiracy" that restrains competition and hurts consumers. If the NFL is a single unit, it cannot be in combination, contract or conspiracy. It would be immune to the antitrust cases that have allowed player unions to establish and to protect free agency and other benefits.
[...]
With their new powers and freedom from antitrust concerns, all four leagues would enter a new reality. Owners could attack free agency, using their new bargaining power to restrict player movement from team to team and impose a salary schedule...
[...]
Leagues could easily establish a similar salary schedule for coaches and managers, who are considered a part of management and cannot legally form a union. And leagues could further centralize control over other team operations such as paraphernalia sales, TV programming and web initiatives.
[...]
If the NFL succeeds in its single-entity gambit in the Supreme Court, the words "decertification" and "class action" will disappear from the vocabulary of sports. Unions will be left to the uncertainties of bargaining a contract with strikes as their only significant leverage. Instead of resolving bargaining impasses with court cases, the deadlocks will be resolved in strikes and lockouts -- the baseball way.

American Needle's experience offers some evidence of what can happen when the NFL is successful in defending itself against antitrust suits. In court papers, attorneys for American Needle explain that the manufacturer was one of several competing companies licensed to make hats and caps bearing NFL logos. When the league agreed to grant caps-and-hats exclusivity to Reebok in 2000, the prices jumped from $19.99 to $30. Prices of replica jerseys increased by 60 percent, according to Carey, the ANI attorney.

After hearings in 2006, the Senate Judiciary Committee confirmed that it is "well documented" that fans and consumers suffered "losses from potentially anticompetitive agreements among professional sports clubs" such as the exclusive contract with Reebok.

So the Supreme Court will hear powerful arguments and evidence that contradict the single-entity concept. But experts agree -- and the unions fear -- that the NFL and the other leagues have a chance for success.

Log in or Sign up

Antitrust case could be Armageddon

coynejeremy Super Moderator

Share This Page

Log in or Sign up

Antitrust case could be Armageddon

coynejeremy Super Moderator

Share This Page

Useful Searches