NFL's antitrust position rejected
Tuesday, May 25, 2010
By Ray Fittipaldo, Pittsburgh Post-Gazette
The Supreme Court ruled against the National Football League's request for broad antitrust protection on Monday in a decision viewed as a victory for American sports fans and a blow to the most popular sports league in the country.
The NFL must be viewed as 32 separate teams, not one business, when selling team merchandise, the court said in a unanimous decision. Perhaps more appealing to fans is that the ruling could expedite the process for the NFL and the NFL Players Association to begin negotiations toward a new collective bargaining agreement to avoid a work stoppage in 2011.
Major League Baseball is the only professional sports league to enjoy broad antitrust protection.
The NFL's case came before the Supreme Court after a hat manufacturer, American Needle Inc., claimed the NFL violated antitrust law because all 32 teams worked together to prevent it from earning licensing contracts when the NFL signed an exclusive 10-year contract with Reebok.
The ruling sent the American Needle case back to federal district court in Chicago.
The NFLPA has been bracing its players and the public for a lockout in 2011. Had the Supreme Court ruled for the NFL on Monday, the league could have set out to restrict salaries for its players and coaches in addition to granting exclusive rights to merchandising companies.
"Today's Supreme Court ruling is not only a win for the players past, present and future, but a win for the fans," DeMaurice Smith, executive director of the NFLPA said in a statement. "While the NFLPA and the players of the National Football League are pleased with the ruling, we remain focused on reaching a fair and equitable collective bargaining agreement. We hope that today also marks a renewed effort by the NFL to bargain in good faith and avoid a lockout."
Mr. Smith is not the only person who thinks that Monday's ruling could help negotiations between the NFL and the NFLPA. David Synowka, director of Robert Morris University's sports management program, said the NFL likely was waiting for this issue to be resolved before entering negotiations with the NFLPA.
And now that it is clear the league will not receive broad antitrust exemption, one fewer roadblock exists for labor peace.
"Overall, I think the ruling is good for sports fans everywhere," Mr. Synowka said. "The concern was that if [the Supreme Court] gave broad protection that the NFL would be able to control salaries and determine how they distribute their product."
The NFL issued a statement which read in part: "The decision will simply result in America Needle's claim being sent back to federal district court in Chicago, where the case will resume in its early stages. We remain confident we will ultimately prevail because the league decision about how to best promote the NFL was reasonable, pro-competitive, and entirely lawful. The Supreme Court's decision has no bearing on collective bargaining, which will be governed by labor law."
The Steelers, through a spokesperson, declined comment.
The NFL has been butting heads with lawmakers for the past few years on several issues. In 2007, Sen. Patrick Leahy of Vermont and Pennsylvania's Sen. Arlen Specter threatened to reconsider the extent of the league's antitrust exemption when it began distributing some of its games only on The NFL Network, which prevented some fans from viewing games.
Nothing ever came of the proposed action, but the NFL and other sports leagues must tread lightly when politicians are involved in their issues, Mr. Synowka said. Mr. Synowka noted that when members of the House of Representatives held a hearing on steroid use in Major League Baseball, members of Congress threatened to take away its antitrust protection if MLB was not forthcoming about steroid use among its players.
"The NFL is going to be very careful to walk a fine line," Mr. Synowka said. "They realize with politics that Congress can come in and legislate their industry."
Monday's ruling spawned a lot of speculation about the future, but the only thing that seemed certain was that consumers would benefit if the lower court follows the Supreme Court's lead and rules against the NFL. With more manufacturers represented in the marketplace, prices of team merchandise likely would drop because of competition.
"The Court's unanimous decision will ensure that the antitrust laws apply to concerted actions by teams of the National Football League," Mr. Leahy, chairman of the Senate Judiciary Committee said in a statement. "The ruling is a rare win for sports fans, and in fact for all Americans who value competition in the marketplace.
"Going forward, the sale of team merchandise and tickets will be subject to the antitrust laws and set by competitive factors, not agreements in restraint of trade. The antitrust laws promote competition, which enables consumers to pay lower prices and receive more choices. Justice [John Paul] Stevens, writing for a unanimous court, has again recognized the impact of the Court's rulings in pocket-book cases affecting hardworking Americans. Our federal antitrust laws are designed to preserve a competitive marketplace and today's Court decision emphasizes the importance of these laws in protecting consumers."
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