US Supreme Court to hear NFL apparel licensing case

A few days ago the NFL and American Needle Inc. both appealed to the United States Supreme Court for a decision regarding antitrust issues and the NFL's exclusive licensing deal with Reebok.  Although the Supreme Court has gone into recess for the summer, ESPN is reporting that the Supreme Court has agreed to hear the case next term.  Oral arguments will be later this year or early in 2010.

This could be a huge antitrust case for the NFL and the other sports leagues.  American Needle had an official license to manufacture NFL headwear, but lost the deal when the NFL reached an exclusive contract with Reebok in 2001.  American Needle sued and the NFL won the case in the federal court of appeals.  American Needle obviously appealed, but the NFL also appealed "asking the Supreme Court to hear the case in a quest for a more sweeping decision that could put an end to what the league considers costly, frivolous antitrust lawsuits."

I haven't had a chance to read the court of appeals decision, but as ESPN puts it:

The case concerns whether the league is essentially a "single entity" that can act collectively or 32 distinct businesses that must be careful about running afoul of antitrust laws by working too closely together.

The various professional sports leagues in the US have dealt with antitrust concerns for decades.  MLB has an antitrust exemption, while I believe the NFL has a more limited exemption related to the television contract and their player draft (the player draft is technically an illegal restraint of trade).

While sports labor is the area of the law I am most interested in, antitrust law has a lot of intriguing nuances.  I'd imagine the NFL will end up winning this case, but either way we'll keep an eye on it.

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