The U.S. Supreme Court today said it would hear arguments in a case that will determine whether the NFL and its 32 teams can enter into an exclusive licensing deal without violating antitrust laws.
The court will hear an appeal from American Needle Inc., an Illinois company that challenged the NFL exclusive deal with Reebok to manufacture licensed league apparel.
A federal appeals court had ruled in favor of the NFL last year.
Basically, at issue here is whether the NFL is a “single entity” or 32 separate businesses. The appeals court had ruled that the NFL could negoatiate as a single entity, because an individual team would probably not exist (or at least have no reason to exist) unless it was part of a league.
What’s a little unusual here is that while it was American Needle that appeal to the Supreme Court for a more favorable verdict, the NFL also asked for a review. Normally a group would never ask for a higher court to review a decision that came down in its favor. But the NFL wants to make a statement.
From the Associated Press:
“The NFL won the case in the federal appeals court 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 Supreme Court will likely take up the case in early 2010.