WASHINGTON – Ready. Set. Hike. The Supreme Court announced Monday it will hear arguments later this year in a multi-billion dollar case that examines the National Football League's ability to contract out its headwear and apparel brands for each of its 32 teams.
An Illinois based company filed suit against the NFL claiming its exclusive 10 year agreement with Reebok is a violation of federal antitrust laws. Lower courts have ruled in the league's favor saying it operates as a single entity—not as an enterprise of 32 separate businesses—and was therefore within its legal rights to enter into the Reebok contract.
American Needle, Inc. says the contract not only violates antitrust laws but has also proved to be unfavorable to the public. It claims a 50% increase in the retail costs of fitted hats featuring NFL team logos. The company which used to have its own apparel contracts with the NFL says the lower court's ruling "threatens to cause major disruption in the heretofore consistent application of [antitrust laws] to professional sports."
Interestingly, the NFL also asked the Court to take the case saying while they favored the rulings so far; other appellate courts across the country have produced conflicting results. The league sees this case as an opportunity for the high court to hand down a uniform decision.
The National Hockey League and the National Basketball Association submitted briefs in support of the NFL's case while expressing the same concerns. Lawyers for the NBA says the conflicting opinions in the lowers courts "impedes the ability of the NBA to engage in vigorous interbrand competition against the countless other producers of entertainment products and services."