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Monday, January 11, 2010
More American Needle v. NFL

With the American Needle v. NFL Supreme Court hearing just a couple of days away, there are some good commentaries to read including:

1) Bill King of the Sports Business Journal has a thoughtful and extensive piece titled, "Supreme Court Weighs a Game Changer" He interviews a number of folks for the piece. Here are my comments:
Others aren’t as sure that the four decidedly conservative judges are certain to side with the NFL. Michael McCann, a Vermont law School sports law professor who recently analyzed the case in the Yale Law Journal, allows that a conservative viewpoint might lead those justices to favor competition between businesses and discourage collaboration, aligning them with the viewpoint of American Needle.

Still, McCann and Gary Roberts agree that the NFL likely views this court as wary of constraining a business on antitrust grounds when the damage to consumers isn’t blatant, making this an opportune time for the league to take its shot.

“My sense is that they view this particular court and this particular case as providing a very good argument for single entity when compared to other cases,” McCann said, “and other potential compositions on the court.
2) Drew Brees of the New Orleans Saints (and also of the NFLPA's executive committee) has a thoughtful op-ed in the Washington Post on the case. Here's an excerpt:
[I]f the Supreme Court agrees with the NFL's argument that the teams act as a single entity rather than as 32 separate, vigorously competitive and extremely profitable entities, the absence of antitrust scrutiny would enable the owners to exert total control over this multibillion-dollar business.

What might the owners do? They could agree to end or severely restrict free agency, continue to enter into exclusive agreements that will further raise prices on merchandise, lock coaches into salary scales that don't reward them when they're promoted and set higher ticket prices (including preventing teams from competing through ticket discounts).
3) For a related piece about the NFL's potential problems in securing a new collective bargaining agreement, see Jeff Levine's detailed analysis on The Biz of Football. Here's an excerpt:

The biggest signs that point to a lockout are: (1) the hiring of Bob Batterman, (2) the fact that the NFL is accumulating a war chest in preparation for a lockout and most significantly . . .

It is certainly true that the NFLPA should be alarmed by the NFL’s hiring of Batterman as outside counsel. As Smith alluded to in his email, Batterman was instrumental in designing and implementing the NHL’s lockout strategy. It seems the NFL is now duplicating this strategy as it waits for the current CBA to expire before it will engage the union in any real discussions.

The NFL can afford to wait for the expiration of the CBA partially because of the significant contracts it signed with various sponsors and partners. For instance, the NFL recently signed a deal with DirecTV that pays the league $1 Billion regardless of whether football is played in 2011. This type of deal provides the NFL with plenty of leverage in dealing with the union.
For other Sports Law Blog coverage on American Needle v. NFL, click here.


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