Thanks for posting, Marc. In light of the NFL's recent success asserting the single entity defense in American Needle, I presume the NHL will itself try to revive the defense here. Although the 2nd Circuit has previously rejected the NFL's assertion of the defense in North American Soccer League, that opinion was issued before the Supreme Court's opinion in Copperweld, and did not involve a challenge from a league member-team. Both factors would arguably distinguish this current case from N.A.S.L.. I look forward to following this litigation.

 Anonymous -- 10/05/2007 10:05 AM  

"MSG has attempted to limit its complaint to the challenge of a narrow range of collectivized rights -- even conceding that "legitimate activities [for the NHL] include ... negotiating television broadcast arrangements" -> Didn't NCAA v. Board of Regents of Univ. of Oklahoma declare that this practice - for a league to negotiate TV broadcast arrangements - violates section 1 of the Sherman Act through a rule of reason analysis?

Rangers have a good point here. Standardizing and limiting the team website affects the consumers in a negative way and really has no business being regulated by the NHL.

 Adam W -- 10/05/2007 3:33 PM  

To address both of today's comments:

I think our first reader is right on target with his analysis about the NHL's defense strategy (or at least part of it); however, I would caution that there is a subtle difference between a "single entity" defense and a "joint venture with procompetitive effects" defense. Unfortunately, Judge Moran (who decided the American Needle case) seems to have mixed and matched the two terms. Therefore while the NHL might allege both defenses, it is not clear that American Needle would get the NHL anywhere with respect to a true "single entity" defense.

To explain in further, in the case that our reader is referencing, American Needle, Inc. v. New Orleans Lousiana Saints, 496 F.Supp.2d (2007), the court granted the NFL team defendants' motion for summary judgment, dismissing Section 1 claims filed by a coroporation that designed and manufactured NFL trademarked headgear. Based on some language in that case, American Needle Inc. was purporedly dismissed on the grounds that the NFL teams acted as a "single entity" in licensing their intellectual property through NFL Properties. However, what Judge Moran may have meant to say was that the joint venture in property licensing yielded procompetitive effects -- not that the league was a single entity. Moran even acknowledges within his opinion that "supposed efficiencies in economic arrangements are more the stuff of the rule of reason than of distinguishing between single entities and joint ventures." Id. at 944. However, in that case, the mixed-and-match terminology used by Judge Moran was largely irrelevant to the outcome.

The subtle difference in terminology, however, may become important in the MSG v. NHL, depending upon how the facts emerge. If a league were a single entity, it simply could not violate Section 1 of the Sherman Act because a necessary element of a conspiracy (two or more parties) would not be present. Conversely, if a league is a joint venture, the concerted conduct is only permissible if it yields a procompetitive effect.

* * *

With respect to Adam W.'s comments, two quick points:

First, the Sports Broadcast Act of 1961 allows professional sports teams to pool their broadcasting rights; whereas this statutory exemption does not apply to the NCAA.

Second, it is clear that the Rangers are carefully picking and choosing their battles. For various reasons (both internal and external), I doubt that Madison Square Garden would really want to the challenge pooled broadcasting system. Therefore, they are not.

 Marc Edelman -- 10/05/2007 3:58 PM  

I noticed that the Rangers official website switched over from www.Newyorkrangers.com to rangers.nhl.com today. Whatever happened with that lawsuit?

 HockeyDebs -- 11/26/2007 5:50 PM  

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