NFL loses Supreme Court antitrust case

[TrueBeliever]

Here's what I don't get: why does MLB get this antitrust exemption when none of the others, not even NCAA, do?

Supreme Court denies NFL broad antitrust protection - NFL - CBSSports.com Football

Please, PLEASE do not turn this into a political thing.

 

[Gwedd]

Good. This is exactly the right outcome. The 32-team league is no different, in effect, than the 50 state "United States". We have a Federal Government to do those things which the individual states cannot do, but each state is still free to run their state as each sees fit.

 

[spacecrime]

Good. This is exactly the right outcome. The 32-team league is no different, in effect, than the 50 state "United States". We have a Federal Government to do those things which the individual states cannot do, but each state is still free to run their state as each sees fit.

It's always cool to gratuitously bring politics into a football discussion, because then you can give a political opinion about states' rights being strong when actually the federal government micro-manages the states tightly, well byond "doing what they cannot do themselves," and illegally uses withholding of funding to force the states to do things they don't want to do, but other than noting that as an aside, I have no opinion because I try to stick to football topics.

 

[jmt57]

Hopefully this does not result in each franchise making its own license and apparel agreements, and keeping all of that profit for themselves - but it sounds like that is exactly what will happen.

Part of the beauty of the NFL in comparison to a sport like baseball is that the combination of sharing of revenues, along with a limit on spending (salary cap), that makes it extremely difficult for a franchise to 'buy' a championship - while at the same time small market teams are on equal footing and can be very competitive. Over time teams like Dallas will soon have a distinct advantage, while teams like Jacksonville and Buffalo will find it more and more difficult to compete.

Next question is this: how does it affect television contracts? Would a network be able to sue that they are being shut out? Would each team be able to negotiate its own TV contracts?


EDIT: If I'm not mistaken, the NFL has a limited antitrust exemption - limited to only their television contract. I would have thought they would have attempted to use that as a reason to make the apparel and licensing contract too since that is revenue sharing, but I guess the court thought that exemption applied strictly to television.

 

[ctpatsfan77]

Here's what I don't get: why does MLB get this antitrust exemption when none of the others, not even NCAA, do?

Supreme Court denies NFL broad antitrust protection - NFL - CBSSports.com Football

Please, PLEASE do not turn this into a political thing.

That's a good question, for which I cannot think of a logical answer.

 

[jmt57]

That's a good question, for which I cannot think of a logical answer.

Here's a decent Q&A on the MLB antitrust exemption, even though it's several years old. Seems as if the courts realize it shouldn't be there but for whatever reason haven't struck it down.

ESPN.com - Baseball's antitrust exemption: Q & A

 

[Mike the Brit]

Well, selling hats and t-shirts is profitable, but it's nowhere near as important to the league as its monopoly (actually, technically, monopsony) power in the labour market -- that is, its power to limit free agency through the draft and the salary cap.

If that goes everything changes (see the experience of European soccer).

 

[Gwedd]

It's always cool to gratuitously bring politics into a football discussion, because then you can give a political opinion about states' rights being strong when actually the federal government micro-manages the states tightly, well byond "doing what they cannot do themselves," and illegally uses withholding of funding to force the states to do things they don't want to do, but other than noting that as an aside, I have no opinion because I try to stick to football topics.

Not politics at all. Just one good analogy that fits very well for illustrative purposes. Seems to me that you are the one adding the political spin to this.

Respects,

 

[PatsFanSince74]

Here's what I don't get: why does MLB get this antitrust exemption when none of the others, not even NCAA, do?

Supreme Court denies NFL broad antitrust protection - NFL - CBSSports.com Football

Please, PLEASE do not turn this into a political thing.

In this case, it helps that the Exemption has been around now for 88 years; both Congress and the Court are slow to overturn arrangements with that kind of precedent.

I do note, though, that the Exemption hasn't been tested in the Supreme Court since 1972, when the Court threw it back to Congress if it is to be changed. Since it's almost 40 years since the last time the Exemption went to the SC, it would be interesting to see what would happen were it to be challenged again in the context of today's ruling.

 

[MassPats38]

The Supreme Court decision alludes to a concurring decision written by now Justice Sotomayor in Major League Baseball Properties, Inc. v. Salvino, Inc., 542 F.3d 290 (2d Cir. 2008). Under the Supreme Court's rationale today, that practice does not look much different than the NFL's licensing practice held not to avoid antitrust laws.

 

[PATSNUTme]

So what does this mean in the big picture. Right now the owners are arguing about revenue sharing and that is one roadblock to a new CBA?

I'm certainly not a legal scholar, or any scholar fort that matter, but I'd like an opinion on how this effects revenue sharing, if at all.

 

[TrueBeliever]

Here's a decent Q&A on the MLB antitrust exemption, even though it's several years old. Seems as if the courts realize it shouldn't be there but for whatever reason haven't struck it down.

ESPN.com - Baseball's antitrust exemption: Q & A

Thanks for the link, but I'll have to read it some other time. That's way too much for a Monday night...

 

[ausbacker]

Good. This is exactly the right outcome. The 32-team league is no different, in effect, than the 50 state "United States". We have a Federal Government to do those things which the individual states cannot do, but each state is still free to run their state as each sees fit.

Why are you called the United States of America then? If each state runs their own business separately, then it's more a collection of sovereign states that come together under one roof when it suits I would have thought?

Yes.. I know I'm stirring the pot of your great nation .

 

[Mike the Brit]

Why are you called the United States of America then? If each state runs their own business separately, then it's more a collection of sovereign states that come together under one roof when it suits I would have thought?

Yes.. I know I'm stirring the pot of your great nation .

Oliver Wendell Holmes, way back when, thought that baseball was not "interstate commerce" and, since the Federal Government only has the constitutional power to regulate "interstate commerce", Federal Anti-trust Laws couldn't apply to it. Which seems pretty bizarre for then and is an obvious absurdity today.

The big question is whether you see sports as single businesses with individual franchises -- in competition with other sports but not with themselves -- or as cartels made up of individual businesses that ought to be competing with one another. If it's the first, then they're competing in their own way; if the second, then they're limiting competition. That's the kind of question -- impossible to answer from rational principles but possible to argue about indefinitely -- that keeps lawyers rich.

 

[SteveKiner]

Without turning this into a big political discussion, can anyone answer how this might effect the CBA and what this Supreme Court decision might mean for NFL going forward? Does this decision help the owners? the players association? IMO the NFL is the best of all the major sports due in large part to the current (expired)CBA and salary cap. What effect will this decision have on the future of the CBA/salary cap? What will be the effect on the haves? (NE Pats) and the have nots? (Bills) Any thoughts?

 

[DaBruinz]

Without turning this into a big political discussion, can anyone answer how this might effect the CBA and what this Supreme Court decision might mean for NFL going forward? Does this decision help the owners? the players association? IMO the NFL is the best of all the major sports due in large part to the current (expired)CBA and salary cap. What effect will this decision have on the future of the CBA/salary cap? What will be the effect on the haves? (NE Pats) and the have nots? (Bills) Any thoughts?

First off, the Current CBA has not expired. What expired was the Salary Cap as its not in use in the final year of an NFL CBA.

I think that this could have huge ramifications on a lot of different levels depending on what Anti-Trust exemptions the league DOES still have. Here is where I see issues..

1) TV Revenue. This may have voided the contract with DirecTV over it's Proprietary "NFL Sunday Ticket" . (DirecTV has the copyright to the name). DirecTV provides something like 20% of the leagues TV revenue.

2) Games - This should void the exclusivity contract that EA Sports has with the Madden Franchise. It also could produce a lawsuit against the league for having locked out the other game franchises.

3) Cross Market Advertising - One of the issues that I see here is that it basically opens up for teams to advertise their products in other markets, whereas they weren't allowed to before. Imagine the Patriots doing a marketing campaign in Southern California for the Pats/Chargers games.. the kind of chaos that would bring...

4) Back to TV - This could open up the potential for "ALA CARTE" ordering of games. Where as games can't be shown in other areas due to how the league has the country divided up, they should now be able to.. This could cause a nightmare for teams/league if they have multiple unaffiliated stations at games.

5) Negotiating with the Player's Union for a new CBA

 

[alamo]

I think that this could have huge ramifications on a lot of different levels depending on what Anti-Trust exemptions the league DOES still have. Here is where I see issues..

No. Or at least not for a good while.

THE NFL DID NOT LOSE THEIR CASE against American Needle.

A lower court ruled against American Needle. The Supreme Court just overturned that ruling. But they did NOT decide the case. Instead, they disallowed certain aspects of the original ruling and sent the case back to the original court to be decided based on its merits.

But that does not mean that without antitrust exemption the NFL can not still do all the things it now does, including exclusive contracts. Again, no court has yet said the NFL can't give out exclusive contracts. They've just said they need to conform to antitrust law if they do so.

If the NFL had won, then there would have been big ramifications, including on the labor front. That didn't happen. Now, the NFL will likely continue what it was doing, but being careful to do so in a way that will still pass court challenges. So there will be an effect but nowhere near what some people are saying in the near future. The American Needle case was filed in 2004, it's not going to get wrapped up tomorrow.

Also... many of the points such as "games will no longer be exclusive" ignore facts such as, even if other games makers could license team logs, they would still need to license the word "NFL" and the NFL logos, which clearly aren't covered by the ruling.

 

[TrueBeliever]

alamo - +1. Thanks for clarifying that.

 

[jmt57]

It will be interesting how this plays out. The Sports Broadcasting Act of 1961 essentially ruled the opposite of this Supreme Court case, as they said the NFL (and other pro sports leagues) could indeed act as a single entity in negotiations. I'll be curious to see how this case proceeds. On one hand I suppose they could say the NFL can be a single entity for television, but not for other negotiations - but that doesn't make a whole lot of sense.

What if the NFL says, 'okay we will negotiate with multiple apparel firms, but still share revenues.' What then happens if just one owner (e.g., Jerry Jones or Dan Snyder) says I don't want to share those revenues; can or would he sue the NFL to allow for that to happen?

Google "Sports Broadcasting Act of 1961" and there are some interesting columns on the subject.

 

[Mike the Brit]

I have to think that Alamo must be right, if only because, if it were really true that this case had called all of the NFL's collusive practices into question, the owners would be locked in emergency closed session and not worrying about trivialities like where to host their end-of-season party.

At the end of the day I think this is bound to be a political question -- and rightly so. On the one hand, it's clear that one of the reasons that the NFL has been so enormously successful is that it has been able to regulate competition by the draft, the salary cap and revenue sharing. On the other hand, the kind of "restraint of trade" placed on players -- sign with the club that drafts you or don't sign at all -- would never hold up in a European court.

I guess the secret for the league is to argue that these restrictions have worked for the benefit of its employees (the players) and the general public and it seems to me that they have a pretty good case.

As far as the players go, it seems very plausible to argue that the overall pot of money going to player salaries would be less in a free-for-all, with just a very few rich franchises and a less interesting, competitive league. And as for the second, I have to admire how the NFL has taken a long-term view and kept all of the broadcasting networks involved and that a very high proportion of the games are available on basic broadcasting channels (unlike the greedy idiots who run European football who have thrown themselves at Sky Sports). They may not be maximising revenue in the short term, but they are keeping the game in the forefront of people's awareness and not letting the average fan feel that he is being held to ransom.