In an effort to resolve a lawsuit with an apparel company stemming from an exclusive 10-year, $250 million deal with Reebok, the National Football League was denied by the Supreme Court in being granted broad antitrust immunity.
According to The New York Times, the ruling of American Needle Inc. v. National Football League was a reversal of a controversial lower-court ruling which was trying to seek protection from challenges to the business on anti-trust grounds.
The court ruled that the NFL is stop open to antitrust scrutiny.
The company American Needle has been producing hats and other memorabilia bearing NFL team logos and it felt that the new deal violated antitrust law as the league is a collection of individually owned teams competing and not an individual that had the ability to negotiate contracts that affect all the teams.
Regarding itself as one large entity, the court ruled that the 32 teams are actually separate, but all have the same interests in pushing the NFL brand forward in business.
“Although N.F.L. teams have common interests such as promoting the N.F.L. brand,” Justice John Paul Stevens wrote for the court, “they are still separate, profit-maximizing entities.”
Professor Feldman, of Tulane, stated that the league was in no worse of a situation then they were prior to the ruling and the only loss is their ability to assert defense that will be immune from suit as a single entity. The issues will have to be handled on a case-by-case basis.
“I don’t think this will lead to any particular increase in litigation,” Professor Feldman said. “It’s a victory for all potential plaintiffs and players, because it gives them the ability to sue the N.F.L., but it won’t lead to a flood. This won’t open the floodgates. It will just keep the doors open.”