Thursday, June 11, 2009
Posted by D. Daniel Sokol
ABSTRACT: Courts have long struggled to articulate a coherent or sensible approach to applying the Sherman Act to sports leagues. While Major League Baseball avoided the complications through its infamous judicial exemption from the antitrust laws, antitrust decisions involving other professional sports leagues are riddled with inconsistencies and confusion. The Seventh Circuit recently added to the morass with its decision in American Needle.
In American Needle, the plaintiff, a manufacturer and designer of sports apparel, brought an antitrust suit challenging the decision of the National Football League (“NFL”) and its teams (via NFL Properties) to enter into an exclusive licensing relationship with Reebok for the manufacture and sale of headwear bearing NFL team logos. The NFL moved for summary judgment, arguing that it was immune from Section 1 scrutiny because it functions as a single entity... [and]...sports leagues have long viewed the single entity defense as the antitrust “holy grail.”