NFL loses ruling at Supreme Court level (sort of) (1 Viewer)

[AngryPatriot]

Interesting business decision...

"Monday’s ruling will give plaintiffs the justification for continuing to sue the N.F.L. and other sports leagues in antitrust cases. But because law suits are so expensive and time-consuming to undertake, the court’s ruling Monday is not going to lead to a rash of new cases.

“It’s a victory for all potential plaintiffs and players because it gives them the ability to sue the N.F.L.,” said Gabe Feldman, the director of the Sports Law Program at Tulane University. “But this won’t open the floodgates, it will just keep the doors open.”"

http://www.nytimes.com/2010/05/25/sports/f...5needle.html?hp

 

[Tecumseh]

If they NFL cannot negotiate as a single entity, then how can they negotiate a new CBA?

Goodbye salary cap...

 

[Chase Stuart]

Good recap from SCOTUSBlog:

Rejecting the National Football League’s claim that it has across-the-board immunity to antitrust law when its teams join in a commercial activity, the Supreme Court unanimously cleared the way Monday for trial of a lawsuit against the joint marketing of the right to use the teams’ logos and trademarks on consumer goods. The ruling applied only to that specific joint venture, and did not cover any other collective action that the NFL — or any other pro sports league — might carry out. The Court also did not decide whether the NFL did in fact act illegally in this specific marketing effort; that will be decided at a trial, with the legality weighed under a “rule of reason” standard.

...

Although major league baseball has been exempt from the antitrust laws since 1922, under a Supreme Court decision that year, the other pro leagues have not shared that immunity, and Monday’s ruling in the NFL case re-opened them to court challenge on at least some of their collective commercial efforts. The Court, however, sought to ease the anxiety that its ruling might create, saying “Football teams that need to cooperate are not trapped by antitrust law.” In an opinion by Justice John Paul Stevens, the Court went on to say that pro teams “share an interest in making the entire league successful and profitable,” and in pursuing that they may need to make “a host of collective decisions” that would be beyond antitrust challenge. The particular activity at issue, though, is “concerted activity” of the kind that is subject to challenge under the Sherman Act’s Section 1, the Court concluded.

The ruling was at least a temporary victory for a modest-sized company in Buffalo Grove, Ill. — American Needle, Inc., a maker of sports hats, uniforms and other apparel. It formerly was one of the consumer goods makers whose products were allowed to carry NFL trademarks and identifiers. But, in 2001, it was shut out, when the NFL’s 32 teams decided to solicit bids for an exclusive license to use those marks on headgear, and Reebok International Ltd., won the bidding contest, and got an exclusive license. Now, American Needle, whose claim was thrown out by the Seventh Circuit Court, now gets a chance to try to prove that the joint marketing was an illegal “restraint of trade.” The Court ruled in American Needle v. N.F.L. (08-661)

 

[Chase Stuart]

If they NFL cannot negotiate as a single entity, then how can they negotiate a new CBA?Goodbye salary cap...

They can negotiate as a single entity, and negotiating a CBA is a prime example of that. Sometimes, it's necessary for the NFL to act in concert.It's not necessary to act in concert when it comes to licensing their trademarks for jerseys and hats sold in stores.

 

[Tecumseh]

Good. Then no impact on the CBA.

 

[AngryPatriot]

Yes, good clarification.

 

[az_prof]

If they NFL cannot negotiate as a single entity, then how can they negotiate a new CBA?Goodbye salary cap...

They can negotiate as a single entity, and negotiating a CBA is a prime example of that. Sometimes, it's necessary for the NFL to act in concert.It's not necessary to act in concert when it comes to licensing their trademarks for jerseys and hats sold in stores.

Of course, the devil in the detail will be deciding what is "necessary." In this case, it might be beneficial for the NFL to make more money, but it's hard to see how it is necessary. When it comes to enforcing discipline, is that necessary, or should teams discipline their own players? Hmmm.....Is it necessary to have a CBA? Couldn't teams just compete for players the way companies compete for employees? Why do we "need" a draft and a league salary structure and so on? "Need" is a strong word. Helpful for individual teams to profit doesn't exactly qualify as need. Helpful to assure more equal competition? Hmmm... not so sure. Maybe.

 

[md8]

I wonder if this will affect EA's exclusive deal with the NFL.

 

[Chase Stuart]

I wonder if this will affect EA's exclusive deal with the NFL.

I don't think so. For starters, the court might ultimately decide that there's nothing wrong with what the NFL did here, and that the exclusive licensing agreement with Reebok was reasonable.But even if they find the exclusive licensing with Reebok to be the kind of concerted licensing that is subject to antitrust laws, jerseys/hats/merchandise can be handled on the team level, while a video game obviously would be handled by just the NFL. You wouldn't have one video game for the Chargers, one for the Vikings, etc., the way you would have for video games.

 

[ScottyFargo]

I wonder if this will affect EA's exclusive deal with the NFL.

I don't think so. For starters, the court might ultimately decide that there's nothing wrong with what the NFL did here, and that the exclusive licensing agreement with Reebok was reasonable.But even if they find the exclusive licensing with Reebok to be the kind of concerted licensing that is subject to antitrust laws, jerseys/hats/merchandise can be handled on the team level, while a video game obviously would be handled by just the NFL. You wouldn't have one video game for the Chargers, one for the Vikings, etc., the way you would have for video games.

What the NFL Antitrust Ruling Might Mean for Madden

As of now, it's hardly a direct threat to EA Sports' existing exclusive position. It may have some ramifications for how such a deal might be negotiated after 2012. But Michael Pachter, the well known games sector analyst for Wedbush, and himself a lawyer, believes that video games ultimately won't be involved.

...

"Games (like television) require the participation of all teams to select the distribution channel, while hats can be made by several vendors with several different licenses," he said. "Having each team negotiate the terms of a video game license would mean that there could be 32 separate games, and that potentially, only one team would appear in each."

Yep

 

[JamesTheScot]

I wonder if this will affect EA's exclusive deal with the NFL.

I don't think so. For starters, the court might ultimately decide that there's nothing wrong with what the NFL did here, and that the exclusive licensing agreement with Reebok was reasonable.But even if they find the exclusive licensing with Reebok to be the kind of concerted licensing that is subject to antitrust laws, jerseys/hats/merchandise can be handled on the team level, while a video game obviously would be handled by just the NFL. You wouldn't have one video game for the Chargers, one for the Vikings, etc., the way you would have for video games.

What the NFL Antitrust Ruling Might Mean for Madden

As of now, it's hardly a direct threat to EA Sports' existing exclusive position. It may have some ramifications for how such a deal might be negotiated after 2012. But Michael Pachter, the well known games sector analyst for Wedbush, and himself a lawyer, believes that video games ultimately won't be involved.

...

"Games (like television) require the participation of all teams to select the distribution channel, while hats can be made by several vendors with several different licenses," he said. "Having each team negotiate the terms of a video game license would mean that there could be 32 separate games, and that potentially, only one team would appear in each."

Yep

Games are not like television in that regard!In the real world, two teams can't each have an exclusive TV contract with different broadcasters and play each other while under those contracts.

However, in the game world, you can very easily have the Vikings play the Smurfs, the Mario Brothers, or generic yet familiarly color-schemed teams instead of the Bears, Lions and Packers. We used to have NBA games with some guy named "roster guard" playing in Chicago. Sure, we all knew who it was...or wasn't, I should say. But it didn't keep us from enjoying the game.

Let the market clear this up - meaning you all as the paying customer can use the leverage of your $'s.

Insist that game makers include edit functions so you can rename the teams and players as you like.

And before long, the teams will all agree to a non-exclusive license package that will allow multiple companies to each use all the NFL teams and to develop competitive products. The teams sell more product when they all are in the game. Gameplay will actually improve.

 

[FreeBaGeL]

What does this do in terms of licensing, like with team logos or even with usage of game footage. Would that be up to each team now or would the NFL as a league still get say in that?

 

[gump]

Nothing will change in the NFL Licensing world...this is getting blown out of proportion.

American Needle, or any other manufacturer, will still have to go back and prove in the lower courts that the NFL is not operating properly by giving licensing rights thru their current bid process. That ain't happening.

All 31 teams, minus Dallas, are a part of the NFL Consumer Products agreement until 2019...no teams are breaking off and doing their own licensing.

The Rbk onfield deal ends in '12...but bids have already been submitted with a decision likely by October. Rbk as a brand is gone. VF, the other NFL apparel vendor...will keep it's rights and may get more. And the onfield pie could be divided up some...Nike, VF, adidas, UA, Russell, etc...instead of 1 onfield provider.

 

[gump]

NFL statement from NFLLabor.com:

“In today’s decision, the Supreme Court recognized that ‘special characteristics’ of professional sports leagues, including the need for competitive balance, ‘may well justify’ business decisions that among independent competitors would otherwise be unlawful. The court noted that the NFL teams’ shared interest in making the league successful and cooperating to produce NFL football provide ‘a perfectly sensible justification for making a host of collective decisions.’ The decision will simply result in American Needle’s claim being sent back to the 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 best to promote the NFL was reasonable, pro-competitive, and entirely lawful. The Supreme Court’s decision has no bearing on collective bargaining, which is governed by labor law.”

 

[az_prof]

I wonder if this will affect EA's exclusive deal with the NFL.

I don't think so. For starters, the court might ultimately decide that there's nothing wrong with what the NFL did here, and that the exclusive licensing agreement with Reebok was reasonable.But even if they find the exclusive licensing with Reebok to be the kind of concerted licensing that is subject to antitrust laws, jerseys/hats/merchandise can be handled on the team level, while a video game obviously would be handled by just the NFL. You wouldn't have one video game for the Chargers, one for the Vikings, etc., the way you would have for video games.

What the NFL Antitrust Ruling Might Mean for Madden

As of now, it's hardly a direct threat to EA Sports' existing exclusive position. It may have some ramifications for how such a deal might be negotiated after 2012. But Michael Pachter, the well known games sector analyst for Wedbush, and himself a lawyer, believes that video games ultimately won't be involved.

...

"Games (like television) require the participation of all teams to select the distribution channel, while hats can be made by several vendors with several different licenses," he said. "Having each team negotiate the terms of a video game license would mean that there could be 32 separate games, and that potentially, only one team would appear in each."

Yep

The problem with the EA deal isn't so much that the NFL negotiated it on behalf of all teams as that the deal effectively gives a monopoly to a video game manufacturer. It clearly isn't necessary that there be only one game. It does real harm to consumers by driving up costs and driving down quality. I hate monopolies and really wish the government would enforce anti-trust laws more vigorously.

 

[3nOut]

If the NFL isn't really considered a single entity how can there be an NFL players union? I don't belong to any union but I do not believe there are any unions geared specifically to a single company. There is no Ford Employee union, Delta Pilots Union, or such. Unions are industry based so pilots have a union, automakers have their own union, etc. If they go on strike, all pilots, for example go on strike, not just the ones from one airline.

That said, why is there an NFL players union? Shoudn't there be a union for all professional football players which would include Arena and the AFL? Of course, this would complicate salary negotiations and benefits. I do not think NFL players would want to negotiate for Arena ball players to have the same pay structure as themselves.