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NFL antitrust case could see big impact

Sam Eaton Jan 13, 2010

NFL antitrust case could see big impact

Sam Eaton Jan 13, 2010


Steve Chiotakis: It may be playoff season for pro football, but the real battle
is being waged in the U.S. Supreme Court. Today it takes up a case that on the surface is about who gets to make the NFL’s official uniforms and merchandise. But there is a lot more at stake. Marketplace’s Sam Eaton joins us live in our Los Angeles studio. Good morning, Sam.

Sam Eaton: Morning, Steve.

Chiotakis: So what’s the case all about?

Eaton: Well, the case began when the National Football League formed an exclusive partnership with Reebok to be the sole provider of its official apparel. The problem with that was that another company, American Needle, already had individual deals with several NFL teams, deals that were nullified once the broader agreement was set in place. So American Needle sued on antitrust grounds.

Chiotakis: So why, Sam, is this getting so much attention?

Eaton: Well it’s about a lot more than just hats and jerseys. Depending on how it turns out, this case could change the way joint ventures like the NFL are allowed to do business. The central question here is whether the NFL should be considered a single business entity or 32 separate teams working together. If the high court defines the NFL as one business, it becomes immune to the antitrust charges brought against it. But that ruling would affect a lot more than just these apparel deals. Here’s University of Vermont Law Professor Michael McCann:

Michael McCann: The National Football League players association is concerned that if the NFL is considered a complete single entity, then many of the rights that the players’ association has fought for — be it free agency, be it minimum salaries, be it other working conditions — would be in jeopardy.

Now that’s because once the current labor agreements expire next year, teams would be able to negotiate a new agreement as a unit. And that means they no longer have to compete with each other on things like player salaries and ticket prices.

Chiotakis: And Sam, does this extend beyond just the NFL?

Eaton: It certainly does. It’s likely to affect other sports leagues from hockey to basketball. And major credit card companies like VISA and Mastercard could also feel the impacts — like the NFL, they consist of a group of individual banks. And if they’re considered separate businesses, they can be sued on the grounds of antitrust lawsuits.

Chiotakis: Marketplace’s Sam Eaton. Thanks.

Eaton: Thanks.

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