The Supreme Court yesterday unanimously rejected in American Needle v. NFL, the NFL’s request for broad antitrust law protection as a joint venture, ruling that the NFL should be viewed as 32 separate corporations when selling branded merchandise and apparel. The court’s ruling in American Needle flipped a 7th Circuit opinion that reached the opposite finding.
The NFL really wanted this appeal, hoping to knock the ball out of the park and grab a baseball like antitrust exemption. This means that someone handicapped the Supreme Court and saw a victory. But the league’s lawyers read it wrong, and it was not even close. If the NFL had won, they would have parlayed that new leverage into even more anticompetitive behavior that would have been great for team owners but not for fans or players. If the American Needle ruling gave the NFL a broad exemption, it could have destroyed the years and years of leverage building NFL players have earned in the collective bargaining process. I think this ruling makes it less likely the owners are going to lock out the players in 2011. In fact, if the NFL owners (actually, their lawyers) had read the situation correctly, the league would have tried to get a deal done with American Needle hanging over the players’ heads.