Lawtalkers and NFL fans: to this thread!

[CountDeMoney]

NFL hat case may adjust sports landscape

By Jesse Holland
Associated Press

WASHINGTON — A hat can be a small thing.

Then there's the Supreme Court battle over who gets to make official NFL headgear logos. It could end up having a very large effect not only on all professional sports, but also the landscape of business in the United States.

"Make no mistake about it, this case is about more than just hats," said DeMaurice Smith, executive director of the National Football League Player Association.

The high court will hear arguments Wednesday from a former NFL apparel maker seeking to overturn rulings that the National Football League is one business, not 32 separate ones or teams working together, and therefore immune to an antitrust complaint.

A decision granting the NFL a blanket antitrust exemption could lead to player strikes not only in football, but also pro basketball, hockey and other sports, advocates said. It also could give leagues leeway to reduce player salaries by ending free agency, mean higher ticket price and even reshape nonsport business practices by narrowing the scope of antitrust enforcement.

"NFL players have advanced the game — by forcing free agency, for example — because of the ability to challenge the NFL on antitrust violations," Smith said. "If the Supreme Court grants the NFL immunity from those laws, 50 years of precedent will be ignored, and the game will suffer as a result."

The fallout if the ruling says a league with privately owned clubs can't be considered one business? Lawyers on the other side says that could lead to lawsuits against pro sport leagues, multinational businesses and even credit card companies, potentially driving up the cost of doing business and of everyday products.

A victory by American Needle Inc. of Buffalo Grove, Ill., "would convert every league of separately owned clubs into a walking antitrust conspiracy," NFL lawyer Gregg H. Levy said in court briefs.

The company filed an antitrust challenge to an NFL deal with Reebok International Ltd. American Needle had been one of many companies that made NFL headgear until the league awarded an exclusive contract to Reebok in 2001.

American Needle sued the league and Reebok in 2004, claiming the deal violated antitrust law. Lower courts threw out the suit, holding that nothing in antitrust law prohibits NFL teams from cooperating on apparel licensing so the league can compete against other forms of entertainment.

But in what sports fans would call "running up the score," the NFL is asking the Supreme Court to review the case in hopes of getting a blanket antitrust exemption that could eliminate most, if not all, the antitrust suits against the league.

"It was an odd request — similar to my asking an official to review an 80-yard pass of mine that the official had already ruled a touchdown," New Orleans Saints quarterback Drew Brees wrote in The Washington Post. Brees serves on the executive committee of the NFL Players Association.

Right now, only Major League Baseball has an antitrust exemption, dating from a 1922 Supreme Court decision. The National Basketball Association, the National Hockey League, the NCAA, NASCAR, professional tennis and Major League Soccer are supporting the NFL in hopes the court will expand that antitrust exemption to other sports.

The NFL and other sports leagues want the high court to cement the league's victory in the 7th U.S. Circuit Court of Appeals in Chicago because other appeals courts have ruled differently.

The major credit card companies, Visa and MasterCard, also want the NFL to win, because if the NFL can be considered 32 separate businesses and vulnerable to antitrust lawsuits, then the federation of banks that makes up the credit card network would be in the same position.

An NFL victory would come at the cost of labor peace in pro sports, possibly leading to strikes and lost seasons for professional hockey, basketball and football, player unions say. Even the baseball players endorsed that view because, although baseball has an antitrust exemption, they fear competition among teams over player pay could be eliminated.

The NFL's players union and other pro athlete associations oppose the court's giving the league antitrust protection, noting that labor agreements in the NFL, NBA, NHL and pro baseball all expire in or around 2011.

If the NFL prevails, "decades of antitrust precedents that have protected competition for player services would be reversed, the benefits that both players and consumers have gained from competitive markets would be jeopardized and labor disputes and work stoppages would likely ensue," lawyers from the NFL, NBA, NHL and MLB players' associations said.

"If the NFL wins this case, they can set ticket prices and stop nearby teams from competing for fans by offering discounted tickets. With the economy the way it is, I don't see how that's good for fans," said Pro Bowl guard Steve Hutchinson from the Minnesota Vikings. Hutchinson is also a player representative for the NFL's players association.

The case is American Needle v. NFL, 08-661.

[Neil]

There's no force in the universe that can prevent a strike/lockout in 2011, so it probably doesn't make much of a difference except to stengthen the owners' position.

[JacobL]

There's no force in the universe that can prevent a strike/lockout in 2011, so it probably doesn't make much of a difference except to stengthen the owners' position.

Sick part is the more inevitable it looks the lower the chances are of any late miracle compromise as no one will even be trying for one.

[Valmy]

Finally nothing to distract us from thrilling NCAA matchups like Texas vs. Lousiana-Monroe.

[dps]

The whole idea of anti-trust having any appreciable impact on labor relations in pro sports is completely overblown.  Which pro sport has the strongest players' union?  The one with the anti-trust exemption. 

[Martinus]

It's an interesting case. There is some substance behind NFL's claims, but I don't buy the argument that clubs never compete against each other. For example, I'm pretty certain there is competition for sponsorships and advertisement.

It seems, in a way, not unlike some other "two-side" markets (e.g. newspapers, which compete for readers but also for advertisers) where a relatively small competition for fans/readers (due to high "brand" loyalty etc.) is coupled with a very strong competition for advertisers.

[Neil]

It's an interesting case. There is some substance behind NFL's claims, but I don't buy the argument that clubs never compete against each other. For example, I'm pretty certain there is competition for sponsorships and advertisement.

Actually, national-level sponsorship and advertising are done by the league.

[CountDeMoney]

It's an interesting case. There is some substance behind NFL's claims, but I don't buy the argument that clubs never compete against each other. For example, I'm pretty certain there is competition for sponsorships and advertisement.

Actually, national-level sponsorship and advertising are done by the league.

And team markets are reserved, which is why you don't see the Ravens advertising in the Washington Post, or the Redskins in the Baltimore Sun.

[Neil]

It's an interesting case. There is some substance behind NFL's claims, but I don't buy the argument that clubs never compete against each other. For example, I'm pretty certain there is competition for sponsorships and advertisement.

Actually, national-level sponsorship and advertising are done by the league.

And team markets are reserved, which is why you don't see the Ravens advertising in the Washington Post, or the Redskins in the Baltimore Sun.

Which no doubt made 84-95 extra galling for you, eh?

[CountDeMoney]

Which no doubt made 84-95 extra galling for you, eh?

Particularly painful.  Which is why Jacke Kente Cooke colluded to keeping a team out of Baltimore.

"Baltimore? That's my market now, Commissioner Tagliabue!"

I hope he's rotting in hell, nice and slow.

[DontSayBanana]

The teams have solo business of promoting players and applying their label to an endorsement.  It might take two teams to put on a game, but nobody's going to call up the Eagles' general manager when booking an appearance for Tony Romo.  The revenue's pooled, but what about capital injections?  They come from team owners and single-purpose investors, right?  Sounds to me like the NFL's a regulatory body that's far overstepped its authority, to be honest.

[Martinus]

It's an interesting case. There is some substance behind NFL's claims, but I don't buy the argument that clubs never compete against each other. For example, I'm pretty certain there is competition for sponsorships and advertisement.

Actually, national-level sponsorship and advertising are done by the league.

Oh, ok. This does sound like either a single economic entity or a very tight cartel then.

[citizen k]

Sotomayor prodded further, asking what decisions could sports teams make that "would be subject to antitrust scrutiny?"

Levy replied that "the NFL clubs are not separate sources of independent power. They are a unit ... a single entity."

So, pounced Sotomayor, "You are seeking, through this ruling, what you haven't gotten from Congress: an absolute bar to an antitrust claim."

[dps]

Sotomayor prodded further, asking what decisions could sports teams make that "would be subject to antitrust scrutiny?"

Levy replied that "the NFL clubs are not separate sources of independent power. They are a unit ... a single entity."

So, pounced Sotomayor, "You are seeking, through this ruling, what you haven't gotten from Congress: an absolute bar to an antitrust claim."

That's how MLB got their anti-trust exemption--via a USSC ruling.

[garbon]

I don't want to picture Sotomayor pouncing.