The National Football League (NFL) and its licensing partner, Fanatics, Inc., persuaded a U.S. judge to dismiss a lawsuit alleging that the companies had violated antitrust law by controlling the distribution of licensed merchandise.
The ruling frees the NFL, its teams and Fanatics from a lawsuit brought in 2022 by merchandise business Casey’s Distributing, Inc., which alleged that the companies conspired to exclude it from selling NFL-licensed products on Amazon’s marketplace, leaving consumers with fewer options and higher prices.
In its lawsuit, Casey’s said Amazon’s online marketplace is the most important platform for small businesses like Casey’s to participate in the market for licensed NFL merchandise.
Nebraska-based Casey’s also claimed its products were removed from Walmart after it chose Fanatics as its exclusive seller.
Casey’s in its suit wrote that Fanatics, “has used its funding to buy up competing licensees of NFL products, slowly securing its dominance in the licensed sporting goods market, the crown jewel of which is NFL licensed products… The NFL aids and abets Fanatics because it has invested well over $400 million in Fanatics to become a large equity shareholder.”
Manhattan-based U.S. District Judge Andrew Carter, Jr. ruled this week that Casey’s had not provided enough evidence to support the proposed class action.
In a 12-page decision dismissing the lawsuit, Judge Carter of the Southern District of New York ruled this week that even though the NFL strategy that drives sales through its platforms and Fanatics does injure smaller competitors like Casey’s, and there is nothing legally wrong with that.
“While Plaintiffs have been harmed by the actions of the defendants, the law protects competition, not competitors,” Carter wrote. “The anticipated effect of the allegedly anticompetitive scheme would be higher prices for consumers. There is nothing in the complaint adequately alleging that consumers must pay higher prices as a result of the alleged scheme.”
The NFL, in asking Judge Carter to dismiss Casey’s lawsuit, said that its “distribution policy was flexible, and that retailers that want to sell on Amazon must first seek approval by NFL Properties, which licenses the intellectual property for the league and its teams.” In a court filing, the NFL defended its distribution rules as lawful, saying they focus on brand and consumer protection and do not impose restrictions or rules on price or output.
Just Carter said Casey’s will have a chance to refile its lawsuit by the end of the month to try to persuade him to allow the claims to move forward.
Casey’s has filed a similar lawsuit against MLB.
Fanatics’ 10-year partnership with the NFL gives it exclusive consumer product licensing rights to manufacture and distribute all products designed by Nike, the NFL’s official apparel partner. Fanatics also has direct e-commerce partnerships with 28 of the NFL’s 32 clubs, including operating the in-venue retail businesses of 14 teams.
Image courtesy NFL x Fanatics
