Is the National Football League really a group of independent business entities (teams) that can be guilty of acting collectively to restrain trade? Or is the NFL, for all practical purposes, a single business competing against other sports leagues and other forms of entertainment – and thus exempt from antitrust sanctions when the teams act collectively?
This is the sort of challenging antitrust issue that warms the hearts of policy nerds and stimulates their inclination to pontificate. Doesn’t hurt, either, that the case in point is about something really, really important – America’s Game – rather than something boring like steel or software.
In the abstract, we’d side with the single entity crowd: individual teams have no product to sell (games) unless they are allied with others in league play. But this week, the Supreme Court, bless ‘em, dispensed with the abstract and found an intellectually satisfying way to split the baby. In its review of American Needle v. National Football League [Download Here], the Supremes voted 9-zip to reverse two lower court decisions that sided with the NFL. In doing so, though, the court offered a “rule of reason” distinction between activities in which collective team action was needed to generate the service and where it wasn’t. It decided that individual teams could, indeed, compete against each other in marketing their team brands for caps, school notebooks, lunch boxes, etc. without interfering with collectively produced game play.
Works for us.