On Monday, the Supreme Court ruled on a case involving the National Football League and whether the league could be considered one large business or several smaller, separate team companies.
The clothing manufacturing company American Needle sued the NFL and its 32 teams, claiming that the league's decision to give Reebok exclusive rights to make shirts, hats and other merchandise for the football teams violates federal anti-trust laws and did not promote business competition.
In its ruling, the Supreme Court stated that the NFL is actually 32 individual team units that each function as a separate business entity. Given that ruling, American Needle may take the case back to a lower court for a decision on whether a "restraint of trade" took place and whether anti-trust laws were violated by the 32 separate teams.
NFL players were especially interested in and generally pleased with the ruling because if the Supreme Court had decided that the NFL was one large entity, it would give the league more bargaining power when negotiating salary contracts with players.
The first 3 minutes of this video reviews the NFL ruling, while the rest examines other rulings handed down the same day.
Quotes
"American Needle had been selling trademarked headwear for something, I think, close to 40 years, as were other vendors. So, it was saying, basically, this was a very anti-competitive arrangement that the NFL had come up with, with Reebok." - Marcia Coyle, National Law Review
"Justice Stevens wrote for the court, and he said that the NFL and its teams had many common interests, but they actually operated as independent, profit-maximizing entities. They weren't a single entity." - Marcia Coyle, National Law Review
Warm Up Questions
1. What is the Supreme Court? What role does it play in American society?
2. What are anti-trust laws? What do they prevent?
3. Have you ever bought "official" team merchandise from a sports team, like a jersey or hat? What makes it "official?"
Discussion Questions
1. What is the Sherman Anti-Trust Act? What are some other laws that try to regulate businesses? When did such laws come about, and what were some landmark anti-trust Supreme Court rulings?
2. Think about your favorite professional sports team. How does it operate like a business? What things does it sell or market?
3. Do you think that giving exclusive rights to Reebok to sell official NFL merchandise is an abuse of power? Why or why not?
Additional Resources
