Sunday, January 24, 2010

B.A.F.F.L.E.D. Legal Battles

A New Look On Professional Sports

The NFL has found itself facing the highest court in the land, as hat maker American Needle has challenged the football league’s exclusive contract with Reebok for all its league clothing needs. Before the Supreme Court, the NFL has claimed itself to be a “single entity”, with all the teams being components of one unit. On the contrary, American Needle argues each team is its own single entity, with each having their own right to market their intellectual property. NFL intellectual properties include the league logo, individual team logos, uniform designs, and video footage at league funded events (e.g. Games, TV shows, etc.).

The critical nature of this case is one which could change the nature of professional sports forever. If the NFL is granted immunity from breaking antitrust laws, similar to MLB, professional sports would see a decline in sponsorship variety. Antitrust laws prevent entities from reducing competition in the market, ultimately making room for all entrants. If leagues are able to prevent individual teams from joining forces with entities of their choice, the merchandising we see today could even become monotonous, leaving all the demand on 1 producer. Sponsorship across the board would be impacted, as many stadiums, scoreboards, and hockey ice are riddled with advertisements. Giving leagues the power to control the business dealings of their teams could put the ball in a whole other court.

Would you consider professional sports leagues as single entities? Do they not all need each other to produce their commodity of athletic entertainment? Could leagues preclude some contracting types and not others?

Let’s keep an eye on this case to see how the score comes out.

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