Even though the Solicitor General advised the Supreme Court not to grant cert in the case of American Needle Inc. v. National Football League, the Supreme Court decided that it will review the case and see whether the NFL is immune from Section 1 of the Sherman Antitrust Act for the licensing of intellectual property. As I mentioned in a post on July 1,
Are the NFL and its member teams a single entity or do all teams act in a joint venture (similar to a partnership)? The NFL wants the Supremes to hold that the teams and the NFL as a whole, is a single entity for all purposes and exempt from Section 1, not just in the licensing of intellectual property. American Needle wants the Court to hold that the teams do not act as a single entity, and should not be restrained from trade under Section 1 of the Antitrust Act.
I tried to wrap up the case in one paragraph, which obviously did not do justice to the breadth of the issue. So luckily for everyone, one of our favorite Sports Law professors, Michael McCann, has put together a law review note to appear in a future edition of the Yale Law Journal.
The United State Court of Appeals for the 7th Circuit has held that the NFL and its teams operate as a single entity when it comes to apparel sales. Unless the U.S. Supreme Court reverses that decision, the holding will serve as solid precedent. McCann believes that the Court should reverse and reject the NFL’s single entity defense. As McCann notes in Part IV., A Recommendation to the United States Supreme Court,
The Court should reject a general availability of the single entity defense for professional sports leagues. Those leagues, however, should retain an opportunity to obtain exemption from section 1 in limited and carefully-defined circumstances.
Give the paper a read. Do you agree?
