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American Needle Could Get Between Nike And NFL

As a consumer of NFL merchandise, I think it is great that the NFL and Nike were able to put together a five year deal, which makes Nike the official uniform provider of the NFL beginning in April 2012.  Nike makes a fantastic product, which is tough for other large companies to match.  But as a lawyer, I wonder whether the deal will hold up based on legal precedent.

Immediately, I think back to the case of American Needle, Inc. v. National Football League.  The NFL did not only suffer a loss in the Federal Supreme Court, it was a unanimous loss (9-0).  The basic holding was that the NFL is not recognized as a single-entity.  Instead, for antitrust purposes, it is made up of thirty-two separate teams, all with separate motives and interests for their licensing of intellectual property, even though they all obviously share an interest in the long-term success of the NFL.

The NFL’s new contract with Nike is a licensing contract.  Unless American Needle and the NFL eventually settle out of court, which would remove the precedent already created by the legal battle between the two entities in the past, the NFL’s agreement with Nike may not be etched in stone.  The American Needle case was remanded for further proceedings.  My guess is that the NFL will not wait long to settle with the company, as I imagine the Nike deal is extremely favorable for the league.

Here is a good quote from Justice Stevens, who delivered the opinion of the Court,

“Decisions by NFL teams to license their separately owned trademarks collectively and to only one vendor are decisions that ‘deprive the marketplace of independent centers of decisionmaking … and therefore of actual or potential competition,’ “

Why shouldn’t the Miami Dolphins be able to wear Nike jerseys while the Atlanta Falcons wear Under Armour uniforms?  The NFL and Nike may not admit they are concerned about the American Needle lawsuit, but unless there is a settlement, I cannot imagine that it is not on executives’ minds.  Here is a Q&A between CNBC’s Darren Rovell and Nike Brand President Charlie Denson:

Darren: Do you think the American Needle case could possibly negate this deal?

Denson: We’ve watched that case with great interest and at this point in time we’re not taking it into specific consideration. We’ve entered into this deal that starts in 2012 and hopefully by that time it will be resolved and we’ll be able to go full speed ahead.

By Darren Heitner

Darren Adam Heitner, Esq., is a preeminent sports attorney and the founder of Heitner Legal, P.L.L.C., a Fort Lauderdale-based law firm specializing in sports law, contract negotiations, intellectual property, and arbitration. He earned his Juris Doctor from the University of Florida Levin College of Law in 2010 and a Bachelor of Arts in Political Science, magna cum laude, from the University of Florida in 2007, where he was named Valedictorian of the College of Liberal Arts and Sciences. Admitted to practice in the state bars of Florida, New York, and the District of Columbia, as well as multiple federal courts, Darren also serves as a certified arbitrator with the American Arbitration Association.

As an adjunct professor, Darren imparts his expertise through teaching Sports Law at the University of Florida Levin College of Law and Name, Image, and Likeness (NIL) at the University of Miami School of Law in the Entertainment, Arts, and Sports Law LL.M. program. His scholarly contributions include authoring several books published by the American Bar Association, such as How to Play the Game: What Every Sports Attorney Needs to Know, and numerous articles in prominent publications like Forbes, Inc. Magazine, and Above the Law. His thought leadership in NIL has earned him recognition as one of the foremost experts by The Wall Street Journal, USA TODAY, and On3, and he has been lauded as a “power player in NIL deals” by Action Network and a “top sports trademark attorney” by Sportico.

Darren’s passion for sports law led him to establish Sports Agent Blog on December 31, 2005, initially titled “I Want To Be A Sports Agent.” The platform, created as a New Year’s resolution, has grown into a cornerstone of the sports agency community, offering in-depth analysis of industry trends, legal disputes, and agent-player dynamics. His commitment to the field is further evidenced by his representation of numerous athletes and sports agents, as well as his prior role as an Adjunct Professor at Indiana University Bloomington, where he developed and taught a course on Sport Agency Management from 2011 to 2014.

Darren’s contributions have been recognized with prestigious honors, including the University of Florida’s 40 Under 40 Award, the University of Florida Levin College of Law’s Outstanding Young Alumnus Award, and designation as the best lawyer in Fort Lauderdale by Fort Lauderdale Magazine. He remains an active voice in the sports law community, sharing insights through his weekly NIL newsletter and his X posts, engaging a broad audience on legal developments in sports.

2 replies on “American Needle Could Get Between Nike And NFL”

I don’t think Nike is too concerned about the American Needle lawsuit at this time. If the existing deal blows apart, Nike will simply sign individual team deals with the 10-15 NFL teams that matter (the ones that best promote the Nike brand and have the best chance at retail) – Steelers, Jets, Patriots, Colts, Dolphins, Redskins, Bears, Green Bay, Raiders, Giants, etc.

The remaining teams – Carolina, KC, Jacksonville, Bills, Rams, Titans, etc. will end up going to Under Armour, Reebok or Adidas.

Ultimately Nike will have the best teams and will cost them less money.

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