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Doug Farrar

American Needle: Stevens ruling splits rhetoric on both sides

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The Supreme Court ruling against the NFL in the American Needle vs. NFL case understandably had both sides - the league and the NFL Players' Association -- putting out their own version of "what it all means." NFLPA Executive Director DeMaurice Smith (pictured) fired the first post-decision volley, saying this in an official statement:

"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."

Veteran center Kevin Mawae(notes), the President of the Players' Association, had this to say: "This decision validates the wins of former players like Bill Radovich, Reggie White, Freeman McNeil and other former NFL Players who had successfully sued the NFL for players' rights such as free agency and fair compensation. This keeps their wins alive for the players who came after them and who will play this game tomorrow."

NFLPA General Counsel Richard Berthelsen: "Once again, the Court has rejected-as it should have-a sweeping exemption for the NFL. The Court's decision affirms our belief that the NFL should not be allowed to operate as a monopoly to the detriment of fans, players and the government. In a country where competition and fair play are so highly-valued, the Court wisely declined to give the NFL a leg up by usurping the role of Congress and ignoring both the letter and the spirit of its anti-trust laws."

But while everyone on the NFLPA side is thrilled that antitrust exemption was not granted to the league, essentially forcing the owners away from the kinds of unilateral union-breaking decisions that could cause havoc in the boardrooms that run the country's biggest sport, the league predictably played down the ruling. NFL General Counsel Jeff Pash told NFL.com's Vic Carucci that "this case was never about labor. We have a collective bargaining relationship. It is an active relationship. We're going to continue to operate in a way that is consistent with the labor laws. We're going to continue to press for a resolution through the collective bargaining process, and I don't think the antitrust laws are going to apply at all. And this case, today's decision, doesn't change that at all."

That's all well and good in theory, but having had the opportunity to read the ruling handed down by retiring Justice John Paul Stevens, it's my belief that the Court looked to establish parameters beyond those appropriate to the settlement of a complaint of an equipment manufacturer against a pro sports league. Stevens knew that he was speaking to larger labor issues, and that's why he set forth specific language in the ruling:

The NFL teams do not possess either the unitary decision-making quality or the single aggregation of economic power characteristic of independent action. Each of them is a substantial, independently owned, independently managed business, whose "general corporate actions are guided or determined" by "separate corporate consciousnesses," and whose "objectives are" not "common." Copperweld, 467 U. S., at 771. They compete with one another, not only on the playing field, but to attract fans, for gate receipts, and for contracts with managerial and playing personnel. (emphasis mine)

Directly relevant here, the teams are potentially competing suppliers in the market for intellectual property. When teams license such property, they are not pursuing the "common interests of the whole" league, but, instead, the interests of each "corporation itself." Copperweld, 467 U. S., at 770. It is not dispositive, as respondents argue, that, by forming NFLP, they have formed a single entity, akin to a merger, and market their NFL brands through a single outlet. Although the NFL respondents may be similar in some sense to a single enterprise, they are not similar in the relevant functional sense.

Stevens' ruling ended with a bit of breathing room for the league, espousing the "rule of reason" and avoiding a total clampdown on any act in concert between two or more teams (i.e., the negotiation of a TV contract, a league-wide merchandising deal, a player trade, or an agreement to play another team in training camp practices).

Football teams that need to cooperate are not trapped by antitrust law. The fact that the NFL teams share an interest in making the entire league successful and profitable, and that they must cooperate to produce games, provides a perfectly sensible justification for making a host of collective decisions. Because some of these restraints on competition are necessary to produce the NFL's product, the Rule of Reason generally should apply, and teams' cooperation is likely to be permissible. And depending upon the activity in question, the Rule of Reason can at times be applied without detailed analysis. But the activity at issue in this case is still concerted activity covered for [the ruling's] purposes.

Still, the message was clear. Stevens basically said that the Supreme Court, and any other Court, would test function rather than form and avoid absolute impingement of any collective activity taken on by the teams,. But any act in concert with an eye on the evasion of antitrust law would not be allowed or exempted. In effect, as Berthelsen intimated in his statement, the NFL must operate under the same constraints as almost any other business. It was a sound and reasoned ruling that penalized neither side and gave the NFL serious incentive to go back to the bargaining table with a new CBA in mind. And no matter how much you care or don't care about the law, antitrust exemptions, or the Supreme Court, it's great news for every pro football fan.

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