Update: Sports, Antitrust, and NFL Immunity

Good afternoon...

In the USA, we are use to watching our favorite sports teams compete against one another for the right to earn a championship. The reason we watch these vary, but the underlying reason is the spectacle of competition. The players and the teams they play for work very hard to “defeat” the other player and/or team.

Each player/team organizes itself to achieve competitive advantage over the other player/teams. Professional football in the US is similar to other industries in this country, where the desire to achieve competitive advantage usually results in financial rewards for the player/team. The Indianapolis Colts and Eli Lilly & Company not only share Indianapolis as their home, but share an operating structure that seeks to obtain and retain competitive advantage over its rivals.

While I do believe that unions in most industries are an outmoded model, I do side with the NFLPA against the the NFL’s ongoing efforts to portray itself as one entity for all its activities, not just marketing and licensing.The NFL wants to eliminate the threat of antitrust suits brought by impaired parties, including smaller companies that want to market merchandise but cannot currently compete with suppliers like Reebok. While a league and its teams such as the NFL do have mutual common interests, to exclude the NFL from antitrust protection goes against what has made pro football so popular and contradicts the fundamental reasons why the league exists in the first place

More importantly, it goes against the fundamental reasons why its fans spend their money to watch the teams compete. The players on those teams are playing to achieve competitive advantage over the other team. Without that dynamic, the team owners would not have a successful product. The Supreme Court should not protect the NFL owners from the risks that business owners in other industries face in order to achieve the profits they seek.

Update 1/20/10
From an article by Ken Belson in the NY Times:
"The league said it will only allow online shops that bought at least $3 million worth of licensed merchandise from Reebok last year to apply to offer the line this year. More traditional stores that also sell online will have to meet a minimum threshold of $2 million in purchases last year....
The league’s new policy comes at a critical legal and political juncture for the N.F.L. The Supreme Court is deciding American Needle v. the N.F.L, a case that could ultimately grant the league effective immunity from antitrust laws, similar to the protections afforded Major League Baseball. That possibility has raised alarms at companies, many of them manufacturers, that fear being shut out of business with the N.F.L.

The league’s change in online sales strategy also comes as the House of Representatives is considering a bill that would make it an antitrust violation for manufacturers to set minimum retail prices. Lawmakers were prompted to act after the Supreme Court in 2007 ruled that producers had far more leeway to dictate retail prices."

This is continued evidence of how the NFL is trying to eliminate small businesses from the competitive environment.