And no, I’m not referring to the fabled nine of the Supreme Court. Instead, #9, Saints quarterback Drew Brees, penned an op-ed piece in yesterday’s Washington Post arguing that the Supreme Court should not find the NFL exempt from the antitrust laws. He makes some good points (remembering, of course, that he is a member of the NFLPA executive committee):
The NFL originally won the case because the lower courts decided that, when it comes to marketing hats and gear, the 32 teams in the league act like one big company, a “single entity,” and such an entity can’t illegally conspire with itself to restrain trade. The NFL-Reebok deal is worth a lot of money, and fans pay for it: If you want to show support for your team by buying an official hat, it now costs $10 more than before the exclusive arrangement.
. . .
The notion that the teams function as a single entity is absurd; the 32 organizations composing the NFL and the business people who run them compete with unrelenting intensity for players, coaches and, most of all, the loyalty of fans. . . . I also know about it because in 2006, after five years with the San Diego Chargers, I became a free agent and witnessed firsthand the robust competition among teams for players. Thanks to free agency, I had the opportunity to sign a six-year contract with the New Orleans Saints . . . . I could choose to sign a contract with the Saints because of a crucial player-led antitrust lawsuit in 1993 that secured players’ rights to sell our services as free agents. Until that case, team owners had acted together to control players and keep salaries low, while the popularity of the game and teams’ revenues grew exponentially. Today, if the Supreme Court agrees with the NFL’s argument that the teams act as a single entity rather than as 32 separate, vigorously competitive and extremely profitable entities, the absence of antitrust scrutiny would enable the owners to exert total control over this multibillion-dollar business.
The argument is scheduled to be heard on Wednesday (1/13/10). For more background on the case, check out the briefs here.
My sense is that the Court will uphold the Seventh Circuit’s ruling that the NFL acts as a single entity when licensing its intellectual property (logos on hats, in this instance). Originally I had read the news reports to say that individual teams at one time licensed their own logos/brands to individual sports merchandising companies — but as I read the Seventh Circuit opinion, I find this is wrong. Since 1963, the NFL itself had licensed all of its teams’ logos/brands under the umbrella of NFL Properties.
Because sports leagues are impossible to define as either solely competitive or solely cooperative, there is some leeway for courts to permit competing firms (here, teams) to cooperate (deciding who will play who, and when, each week, for one small example) where other industries would be prohibited from such agreements by the antitrust laws. I see the licensing and marketing of the league as one area where the league can properly cooperate. I imagine that the Supreme Court will uphold this narrow ruling.
This brings me to my last point — and a short one b/c I have yet to read through the NFL, MLB, NBA, and NHL amicus brief (though those other leagues aren’t ‘in’ the case, they were permitted to let the Court hear their views on the subject because the ruling could affect them): according to several news reports (and my favorite antitrust professor/QB, Drew Brees), the NFL is asking the court to overrule our old friend, Radovich v. NFL, and declare that the NFL has a blanket antitrust exemption.
Like I said, that’s my sense from the news reports. When I finish reading the leagues’ brief, I’ll have a better idea of what they’re asking for.
[also -- sorry for the long layoff. No promises on heavily continued blogging, but I'll update a little more as things interest me. After getting shut out by the league and NFLPA for news, I decided they could stuff it and I'd just passively follow -- we'll see.]
Filed under: antitrust , American Needle, Bill Radovich
