The Supreme Court agreed last week to decide whether the National Football League and its 32 teams can enter an exclusive licensing deal with a maker of team jerseys and other gear without violating federal antitrust law. The court said it will hear an appeal from American Needle Inc. that challenges an agreement the NFL struck with Reebok International Ltd. A federal appeals court ruled in favor of the NFL last year.
American Needle had been one of many firms that manufactured NFL headgear until the league granted an exclusive contract to Reebok in 2001.
In its original lawsuit, American Needle had charged the NFL with unlawful restraint of trade and monopolizing the team products licensing, manufacturing and wholesale markets by violating antitrust laws by working too closely together, according to court documents. The cost of basic fitted caps jumped to $30 from $19.99, American Needle said in court documents. American Needle lost the case in U.S. District Court as well as in the federal appeals court in Chicago in 200.
The NFL won the case in the federal appeals court last year in Chicago, but it also asked the Supreme Court to hear the case in a quest for a more sweeping decision that could put an end to what the league considers costly, frivolous antitrust lawsuits.
The case concerns whether the league is essentially a “single entity” that can act collectively or 32 distinct businesses that must be careful about running afoul of antitrust laws by working too closely together.
The case will be argued late this year or early in 2010.
