American Needle v. National Football League: NFL Can Be Liable For Conspiring Under Section 1 Of Sherman Act


In a decision that was highly anticipated by antitrust lawyers and sports enthusiasts alike, the U.S. Supreme Court unanimously held that the National Football League (NFL) teams were not immune from liability for collaborative decisions.1 The Court concluded that “NFL teams do not possess either the unitary decisionmaking quality or the single aggregation of economic power characteristic of independent action.”2 Instead, the Court held that “[e]ach of the teams is a substantial, independently owned and independently managed business.”3 As a result, agreements among the individual NFL teams are subject to potential liability under Section 1 of the Sherman Act.

In 1963, the NFL and its constituent members formed the National Football League Properties (NFLP) for the express purpose of acting as the agent responsible for licensing individual team IP, and then sharing the revenues generated from the license of such IP equally among the NFL teams. American Needle was a licensee of NFLP and, as a result of its status as an NFLP licensee, was able to sell apparel bearing NFL team insignias. In December 2000, however, NFLP and Reebok reached an exclusive arrangement whereby Reebok would become the only licensee of NFLP that would be able to sell trademarked headware for all 32 teams; concurrently, and as a result, NFLP declined to renew American Needle’s license.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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