Monday, May 24, 2010

Sports Illustrated column on American Needle v. NFL decision

I have an column on today's big decision. Here's an excerpt:

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The NFL's argument encountered significant resistance during oral arguments on Jan. 13. Neither the conservative nor liberal justices seemed to buy the NFL's reasoning, which was inconsistent with precedent and also of questionable logic.

Bear in mind, NFL teams do not necessarily collaborate on licensing contracts; in fact, prior to 1963, they entered into their own licensing contracts. They have also sued each other over this very issue. During the 1990s, Dallas Cowboys merchandise sales far eclipsed those of other teams. Cowboys owner Jerry Jones, however, had to equally share that revenue with every other team owner. In 1995, Jones brought a lawsuit against his fellow owners seeking independence to enter into his own licensing contracts. In response, those owners countersued him. While they would eventually reach a settlement, Jones and other NFL owners certainly did not seem like a single entity at that time.

. . . the decision sends a message to similar professional sports leagues, namely the NBA and NHL, that their own aspirations for single entity recognition are just as unlikely to materialize -- at least through the legal system. Indeed, if leagues would like to avoid Section 1 scrutiny, they can still turn to Congress for Section 1 exemptions. They have a track record there of some success: the leagues persuaded Congress and President Kennedy in 1961 to receive a Section 1 exemption for their national TV contracts. Perhaps they can make their case in Congress for other types of Section 1 exemptions, but it's a case that won't go through the Supreme Court.