American Needle Vs. The NFL: Supreme Court Rules League Is 32 Separate Teams

The Supreme Court ruled on Monday that the NFL is considered 32 separate entities. This could have an effect on how the NFL does business moving forward. Find out how here.

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NFL Issues Statement On American Needle Case

The league has issued a statement on the ruling in the American Needle case. The statement comes from NFLLabor.com:

"In today's decision, the Supreme Court recognized that ‘special characteristics' of professional sports leagues, including the need for competitive balance, ‘may well justify' business decisions that among independent competitors would otherwise be unlawful. The court noted that the NFL teams' shared interest in making the league successful and cooperating to produce NFL football provide ‘a perfectly sensible justification for making a host of collective decisions.' The decision will simply result in American Needle's claim being sent back to the federal district court in Chicago, where the case will resume in its early stages. We remain confident we will ultimately prevail because the league decision about how best to promote the NFL was reasonable, pro-competitive, and entirely lawful. The Supreme Court's decision has no bearing on collective bargaining, which is governed by labor law."    

Note the last sentence in there. The union used the court's ruling to call for a "renewed effort" in labor negotiations. The NFL apparently doesn't think the two are connected.

We'll have more updates on this story coming soon.

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NFLPA Considers American Needle Case A 'Win', Seeks 'Renewed Effort' From NFL In Labor Negotiations

We just heard from NFLPA executive director DeMaurice Smith in a statement issued on Monday. He called the ruling a win for the players and the fans, which is certainly the case from the union's perspective.

If the NFL had been able to identify itself as a single entity then, in theory, they essentially have free reign to control player salaries, free agency and things of that nature. The NFLPA of course doesn't want the NFL to control salaries and really the entire system because that would presumably mean less money in their pockets.

Meanwhile, some also feel that Monday's ruling could have an affect on the overall state of the labor negotiations between the league and the union. Via Yahoo's Shutdown Corner:

[ESPN's John] Clayton intimated that if the NFL lost the appeal, circumstances would lean toward a resolution in the tension that currently affects the 2011 season. "Because, if the NFL wins it, they can really go for the jugular. They can control salaries, and control the system more," Clayton said of a prospective NFL win. "If they lose the case, there may be more of a effort to try and get a [new CBA] deal done."

And a "renewed effort" at getting a labor deal done is what the NFLPA is seeking, according to their statement.  

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NFLPA Executive Director DeMaurice Smith Issues Statement On Ruling In American Needle Vs. NFL

The NFLPA issued a statement on Monday regarding the ruling in the case of American Needle vs. NFL.

"Today's Supreme Court ruling is not only a win for the players past, present and future, but a win for the fans. While the NFLPA and the players of the National Football League are pleased with the ruling, we remain focused on reaching a fair and equitable collective bargaining agreement. We hope that today also marks a renewed effort by the NFL to bargain in good faith and avoid a lockout."    

-DeMaurice Smith, Executive Director, National Football League Players Association    

We'll have further updates to this story coming soon.

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American Needle Vs. The NFL: Supreme Court Rules League Is 32 Separate Teams

The United States Supreme Court has ruled the NFL can be considered 32 separate entities and not a single entity when it comes to selling NFL merchandise.

Here is the entire ruling in PDF form.

American Needle is an apparel company that enjoyed a contract with NFL Properties, a business owned by all 32 NFL teams, to sell NFL apparel. American Needle was one of several companies with a similar contract.

In 2002, the NFL signed a 10-year exclusive contract with Reebok to make NFL apparel. This blocked others, like American Needle, from producing NFL apparel. American Needle argued that agreement with Reebok was illegal under federal antitrust law.

The NFL is made up of 32 separate teams and they compete on and off the field. By law, competitors are supposed to compete and not sign exclusive partnerships with companies that could potentially raise the prices potentially hurting the consumer.

"Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned," Justice Stevens wrote.

The issue is not over; The Supreme Court's unanimous ruling will send it back to the lower courts that originally ruled against American Needle.

But, the ruling is essentially a loss for the league. A January SI.com article explains what could have happened if the courts had ruled the league was a single entity and not 32 separate entities.

Most dramatically, although unlikely given the longstanding legacy of league-labor relations, the Supreme Court could affirm the Seventh Circuit and extend single entity recognition to matters that include those normally subject to collective bargaining, such as players' salaries, free agency rights, and age eligibility restrictions. Leagues could therefore unilaterally restrain players' employment, with players relegated to striking or pursuing job opportunities in leagues abroad as their only means to combat league unilateralism.

We'll have more updates on this ruling shortly.

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