Hats off: NFL apparel fight could have big impact

[February 04, 2010]  WASHINGTON (AP) -- A hat can be a small thing.

Then there's the Supreme Court battle over who gets to make official NFL headgear. It could end up having a very large effect not only on all professional sports, but also the landscape of business in the United States.

"Make no mistake about it, this case is about more than just hats," said DeMaurice Smith, executive director of the National Football League Players Association.

The high court will hear arguments Wednesday from a former NFL apparel maker seeking to overturn rulings that the National Football League is one business, not 32 separate teams working together, and therefore immune to an antitrust complaint.

If the court rules the NFL is a single business entity, then teams would be able to negotiate as a unit instead of separately as they do now. Owners would be free from having to compete with each other on things like player salaries and ticket prices.

A decision granting the NFL a blanket antitrust exemption could lead to player strikes not only in football, but also pro basketball, hockey and other sports, player advocates said. It also could give leagues leeway to reduce player salaries by ending free agency, raise ticket prices and even reshape nonsport business practices.

"NFL players have advanced the game -- by forcing free agency, for example -- because of the ability to challenge the NFL on antitrust violations," Smith said. "If the Supreme Court grants the NFL immunity from those laws, 50 years of precedent will be ignored, and the game will suffer as a result."

The fallout if the ruling says a league's privately owned clubs can't be considered one business? Lawyers in favor of a one-business ruling say that could lead to lawsuits against pro sport leagues, multinational businesses and even credit card companies, potentially driving up the cost of doing business and of everyday products.

A victory by American Needle Inc. of Buffalo Grove, Ill., "would convert every league of separately owned clubs into a walking antitrust conspiracy," NFL lawyer Gregg H. Levy said in court briefs.

American Needle had been one of many companies that made NFL headgear until the league awarded an exclusive contract to Reebok International Ltd. in 2001.

American Needle sued the league and Reebok in 2004, claiming the deal violated antitrust law. Lower courts threw out the suit, holding that nothing in antitrust law prohibits NFL teams from cooperating on apparel licensing so the league can compete against other forms of entertainment.

But in what sports fans would call "running up the score," the NFL is asking the Supreme Court to review the case in hopes of getting a blanket antitrust exemption that could eliminate most, if not all, the antitrust suits against the league.

"It was an odd request -- similar to my asking an official to review an 80-yard pass of mine that the official had already ruled a touchdown," New Orleans Saints quarterback Drew Brees wrote in The Washington Post. Brees serves on the executive committee of the NFL Players Association.

Right now, only Major League Baseball has an antitrust exemption, dating from a 1922 Supreme Court decision. The National Basketball Association, the National Hockey League, the NCAA, NASCAR, professional tennis and Major League Soccer are supporting the NFL in hopes the court will expand that antitrust exemption to other sports.

The NFL and other sports leagues want the high court to cement the league's victory in the 7th U.S. Circuit Court of Appeals in Chicago because other appeals courts have ruled differently.

The major credit card companies, Visa and MasterCard, also want the NFL to win, because if the NFL continues to be considered 32 separate businesses and vulnerable to antitrust lawsuits, then the federation of banks that makes up the credit card network would be in the same position.

An NFL victory would come at the cost of labor peace in pro sports, possibly leading to strikes and lost seasons for professional hockey, basketball and football, player unions say. Even the baseball players endorsed that view because, although baseball has an antitrust exemption, they fear competition among teams over player pay could be eliminated.

The NFL's players union and other pro athlete associations oppose the court's giving the league antitrust protection, noting that labor agreements in the NFL, NBA, NHL and pro baseball all expire in or around 2011. Players unions are against giving antitrust exemptions to sports leagues, saying players' salaries would be more difficult to negotiate.

If the NFL prevails, "decades of antitrust precedents that have protected competition for player services would be reversed, the benefits that both players and consumers have gained from competitive markets would be jeopardized and labor disputes and work stoppages would likely ensue," lawyers from the NFL, NBA, NHL and MLB players' associations said.

"If the NFL wins this case, they can set ticket prices and stop nearby teams from competing for fans by offering discounted tickets. With the economy the way it is, I don't see how that's good for fans," said Pro Bowl guard Steve Hutchinson from the Minnesota Vikings. Hutchinson is also a player representative for the NFL's players association.

The case is American Needle v. NFL, 08-661.

[Associated Press; By JESSE J. HOLLAND]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.