This morning, the Supreme Court granted certiorari in the case American Needle v. National Football League (pdf), for purposes of determining whether the NFL teams' collective licensing of individual team trademarks is exempt from antitrust review under the single entity defense. While there are a lot of strong defenses to the NFL's current licensing arrangement (e.g., pro-competitive effects, undue delay in bringing suit, etc.), I have long held the position that the NFL is not--and can never be-- a single entity. This is because the NFL is composed of 32 separate teams, with separate owners each containing disparate economic interests.
Indeed, the NFL teams have tried to defend their concerted conduct under the single-entity defense on eight prior occasions. Thus far, the NFL is 0-for-8 in those cases (sounds like the start to the 2008 Detroit Lions season).
In addition, the NFL's single-entity argument has severe economic holes in that NFL teams compete against each other, or at least historically have competed against each other, in a wide range of markets, including ticket sales, naming rights and new media. Despite the Seventh Circuit's claim, the single-entity defense has never before applied on a market-by-market basis. Either the NFL is a single-entity (which seems to make little sense when looking at all of these markets in the gestalt), or it is not a single entity (which is the conclusion that hopefully the Court will ultimately reach).
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Marc,
On the one hand, it is a bit surprising that the Supreme Court took this case considering that it asked the Solicitor General for advice on whether to grant certiorari. On the other hand, considering the 7th Circuit's decision runs contrary to other circuits, it is not surprising that the Court would want to resolve a circuit split. Regardless, I have one question. Is it possible that the Supreme Court could carve out a limited antitrust exemption for the NFL and its member clubs for activities conducted as a single entity, i.e., licensing, broadcasting, etc.? Certainly there are areas where the NFL and its clubs operate as a single entity, such as broadcasting. Unlike other sports, the NFL negotiates on behalf of all teams. There are no local broadcast deals for games. (Contrast the NBA, which has deals with ABC and TNT, but teams like the Knicks have deals with local stations.) While I agree that for a majority of activities, the NFL and its clubs are all separate entities, there are circumstances in which they are arguably a single entity. Any thoughts about a narrow, limited exemption?
Tim:
I do not believe there is such as thing as "operating like a single entity." A given business structure is either a single entity, or not a single entity, based on its business structure. Given the NFL business structure does not change for different purposes, there really is no middle ground.
With respect to public broadcasting, the NFL clubs are already exempt from antitrust law under the Sports Broadcast Act of 1961. That is why they are allowed to collectively allocate their broadcast rights. Of course, Congress could add more carve-outs if it wishes.
In addition, for areas where the NFL clubs are subject to antitrust laws (which, outside of the 7th Cir. seems to be everywhere else), NFL club conduct is reviewed under the Rule of Reason, meaning it is upheld if a finder of fact finds net pro-competitive effects.
People seem to forget that even recognizing that the NFL is not a single entity, it is still a joint venture, and that, as a joint venture, it benefits from Rule of Reason scrutiny for all conduct. Isn't that enough of a concession to meet professional sports' reasonable needs?
Tim:
I do not believe there is such as thing as "operating like a single entity." A given business structure is either a single entity, or not a single entity, based on its business structure. Given the NFL business structure does not change for different purposes, there really is no middle ground.
With respect to public broadcasting, the NFL clubs are already exempt from antitrust law under the Sports Broadcast Act of 1961. That is why they are allowed to collectively allocate their broadcast rights. Of course, Congress could add more carve-outs if it wishes.
In addition, for areas where the NFL clubs are subject to antitrust laws (which, outside of the 7th Cir. seems to be everywhere else), NFL club conduct is reviewed under the Rule of Reason, meaning it is upheld if a finder of fact finds net pro-competitive effects.
People seem to forget that even recognizing that the NFL is not a single entity, it is still a joint venture, and that, as a joint venture, it benefits from Rule of Reason scrutiny for all conduct. Isn't that enough of a concession to meet professional sports' reasonable needs?
I'm not an antitrust lawyer, but, if the NFL is successful in its "single entity" argument, then wouldn't all business in an industry just combine and form an unbrella organization to set prices, etc.?
The NLF's argument seems to be that, as long as you rename and incorporate your collusion, then it's a single entity immune from antitrust. Am I boiling it down correctly?
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I actually don't understand their reason of fighting.I heard about this case is causing tense amongst the followers.now lets see what comes next after reaching supreme curt.
How long they will fight?I hope this will end soon.Both American Needle and NFL should stop mocking each other and work together in peace.
Now the are going to supreme court???Lao.that sounds simply great!!!lets see what happens next...
I really hope this will end soon.The two American Filling device and NFL should halt mocking each other along with work together within peace.local seo
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Actually the Court held that NFL teams are distinct economic actors with separate economic interests that are capable of conspiring under §1 of the Sherman Act
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