SBD/Issue 177/Law & Politics

American Needle Ruling Could Alter Marketing, Licensing Deals

Ruling Could Forever Change Marketing,
Licensing Deals Between Apparel Cos., Leagues

Marketing and licensing deals between apparel companies and sports leagues "could forever change" in the wake of the Supreme Court's decision in the American Needle v. NFL case, according to Rich Tomaselli of AD AGE. New York Univ. sports management professor Robert Boland said one should "expect to see changes in licensing and marketing relationships by the leagues" if American Needle is successful when the case goes to trial in federal court in Chicago. Former USOC Exec Dir Harvey Schiller said if American Needle wins that case, whether teams negotiate deals individually or collectively is "really going to depend upon league members and what they believe is their best option." Schiller: "My experience with the USOC is that in some sports, the participants were asked to assign their rights to the organization to market them collectively." Schiller added, "Not everybody likes that, but sometimes it's better for the common good. The danger I see here is when you have one participating club or team that has greater popularity with the public, or is located in a larger population base. That's not good for the rest of the league's teams." Meanwhile, Boland said the Supreme Court's decision to allow the case to go ahead "will embolden other manufacturers denied continuing licenses with pro sports leagues to sue and maybe win." Boland: "I would expect leagues will be careful about bidding out contracts" (ADAGE.com, 5/25). 

RULING'S IMPLICATIONS: ESPN.com's Gregg Easterbrook wrote the fact the NFL was "insistent on pressing" the American Needle case is "the danger sign about the league's hubris." Easterbrook: "In many aspects of its relationship with the public in recent years, the NFL has displayed behavior falling somewhere on the spectrum between haughty and arrogant." The NFL "needs to cut back on public arrogance and begin behaving more humbly," as there is "no law of nature that says the NFL must remain so popular." Easterbrook wrote of the Supreme Court ruling, "The message to Washington is clear: The NFL is not, as it pretends to be, invincible. Thus the NFL's standing in Congress just went way down" (ESPN.com, 5/25). The WALL STREET JOURNAL's Allen Barra writes the ruling is a "clear victory for free enterprise." Univ. of Chicago professor of sports economics Allen Sanderson: "This is a victory for the marketplace, which is what the Sherman Antitrust Act is all about" (WALL STREET JOURNAL, 5/26).

DECERTIFICATION AN OPTION? SI.com's Peter King wrote the ruling "could pave the way" for the NFLPA "to eventually decertify and attack" the negotiations for a new CBA differently. Such a decertification "would mean the players could claim not to be a union, and that has tended to force both sides to the bargaining table in the past." But King wrote there is "little evidence the league will move aggressively to make concessions to try to forge any real progress in the stalled talks." King: "I've said this for the past year, and I'm sure I'll say it for the next nine months: These labor deals always come together (or not) at the 11th hour, and I don't expect real progress 'til next spring at the earliest" (SI.com, 5/25).  

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