Legal scholars and reporters are touting American Needle v. NFL as a case that could "shake some pillars of sports law" and "become the most important sports law case in U.S. history." Why? In 2000, the NFL made an exclusive contract with Reebok to make licensed apparel. American Needle sued the league for violating antitrust laws, claiming that its 32 separate teams conspired to stifle competition and inflate prices. The NFL countered that its 32 teams make up a single entity, eliminating the possibility of conspiracy.
Where the case gets interesting is the NFL's decision to back American Needle's petition to the Supreme Court--even though the league had already won its case in appellate court. Experts interpret this move as a strategic gamble. If the court rules in favor of the NFL, they explain, the league will have knocked out future challenges to its franchising, contract, and salary decisions, cementing its power over players and merchandisers. With conservatives on the bench, the league must be thinking that now is the time to take its shot. The fact that the court accepted the case hints that some of the justices might have sympathy for the NFL's argument. Here's how observers predict the legal outcome and practical fall-out:
- Players, Coaches, and Fans Beware If the NFL Wins, warns John Gibeaut in a comprehensive breakdown at the ABA Journal. The NBA and NHL have sided with the NFL in an amicus brief, Gibeaut explains, while the players and coaches unions are backing American Needle. "Opportunity awaits the NFL if it becomes an all-purpose single entity. It could end free agency for players, limiting their ability to reap megasalaries when they pit teams against each other. It could cabin coaches into salary scales that don't pay them to switch jobs--the typical road for advancement in the profession. Fans, besides paying more for souvenirs, also could wind up forking out money just to vegetate on their couches on Sunday afternoons and watch games."
- NFL Has Everything to Gain and Nothing to Lose, argues sports law professor Gabriel Feldman at the Huffington Post: "This case is a lottery ticket for the NFL. If they win, it could be a significant victory... If the NFL loses, nothing really changes. The issue before the Supreme Court is not whether the NFL's exclusive licensing arrangement is legal under the antitrust laws. The issue is whether the licensing arrangement should even be subject to scrutiny under the antitrust laws."
- An NFL Victory Would Give Professional Sports Leagues Free Reign, cautions Bill King at Portfolio. The Court will have the opportunity to expand its ruling beyond the specific licensing issue at stake, King explains, so "the breadth with which the court considers the case may have more bearing on the sports world than the side it chooses. Its ruling could be limited to the core of the specific case: an exclusive licensing agreement. Or, it could bleed over into other segments of the business, affecting the sale and relocation of franchises, labor relations strategy, and other areas." If the justices take the latter route,their decision "would turn at least three decades of precedent on its ear, giving the leagues a decided advantage in disputes with dissident owners, players unions, licensees--anyone, really, with whom they might cross swords."
- Don't Believe the Hype--Even if the NFL Wins, Nothing Much Will Change, counters Forbes' Tom Van Riper. Invoking the example of Major League Baseball, which has had an antitrust exemption since the 1920s, Van Riper argues that strong players unions can counter a united league in order to stave off salary caps."From a business standpoint, the NFL, like any sports league, has always predominantly acted as a single entity. Teams compete on the field, which does mean bidding on players and coaches. But from a business standpoint, they're partners above all else."
This article is from the archive of our partner The Wire.