Supreme Court Refuses to Insulate NFL Joint Venture from Antitrust Scrutiny

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On May 24, 2010, the Supreme Court released its much-anticipated decision in American Needle, Inc. v. NFL. A unanimous Court, speaking through Justice Stevens in the last antitrust opinion of his illustrious career, held that the decision by all 32 National Football League teams to authorize NFL Properties to grant an exclusive license comprised concerted action subject to review under Section 1 of the Sherman Act. American Needle signals that joint venture participants who are for some purposes competitors cannot expect to defeat challenges of anticompetitive collusion on the ground that a joint venture comprises a “single entity” whose conduct is not subject to Section 1 scrutiny.

American Needle concerned the decision of the 32 NFL teams to vote in 2000 to authorize the NFL’s licensing arm, NFL Properties (NFLP), to grant an exclusive license to produce NFL apparel bearing team insignia to a single licensee. Between 1963 and 2000, NFLP had granted nonexclusive licenses to numerous vendors. A former licensee, disappointed by the 2000 change in policy, brought suit under Section 1 of the Sherman Act, contending that the NFL’s decision comprised an anticompetitive restraint of trade. The district court granted summary judgment to the NFL on the ground that the conduct of the 32 NFL teams comprised the conduct of a “single entity” to which Section 1 did not apply, and the U.S. Court of Appeals for the Seventh Circuit affirmed.

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