With the Super Bowl only days away, we have, for the forty-fourth time (or the fortieth, if you’re focusing on the AFL-NFL merger), two teams pitted against each other… in an epic battle… where on any given Sunday… (you probably can fill in the rest in your favorite sportscaster’s voice).
This year, the New Orleans Saints and the Indianapolis Colts will battle each other in Miami for the Lombari Trophy. But, recently, the question has arisen as to just how independent from one another NFL teams actually are.
This week’s Economist offers a great (and brief) treatment of the subject and poses the question “Is the NFL more than the sum of its parts?”
This question is based on the fact that the NFL consists of 32 separate entities that come together under the mantle of the National Football League. And the NFL, like other American sports, has benefited from certain exemptions from antitrust law.
Antitrust law, among other things, prevents competitors in the marketplace from coming together or otherwise conspiring to restrain trade or prevent competition. To put it in concrete terms, this means Ford and GM can’t get together and secretly plot as to how to put Toyota out of business.
Professional sports, the NFL included, are allowed to bypass the normal antitrust laws, in large part, because they need to in order to have a “product” for consumers. Imagine an NFL without a set 16-week schedule, a playoff scheme, let alone a basic agreement as to the rules of the game.
But this antitrust exemption is up for review. As the Economist reports:
For decades this practice went unchallenged. But in 2000 the National Football League (NFL) agreed to make Reebok the exclusive producer of its team-branded clothing, cutting out all other firms from the business. As any Economist reader would have been able to predict, the price of caps promptly rose, by 50%, while team jerseys began selling for 40% more. In response, American Needle, a hat-manufacturer that previously drew a quarter of its sales from NFL caps, filed an antitrust suit.
The league claimed that it was immune from antitrust scrutiny because, even though it consisted of 32 clubs, it acted as a “single entity”, which could not conspire with itself. This assertion had been rejected in many other courts. But the court of appeals for the seventh circuit accepted it and found for the NFL.
American Needle appealed to the Supreme Court. In a rare move, the NFL also asked for a review, even though it had won, hoping that the highest court might grant it an even more favourable ruling. Whereas the appeals court had held that the NFL could be considered a single entity only in the context of licensing, the league is asking the Supreme Court to grant that status to all aspects of its business.
It will certainly be interesting to see what happens to the NFL’s antitrust exemption here. In the meantime, we have more important things to worry about. And, as much as the partisan Steelers fan in me would like to pretend, it’s not so much the Pro Bowl as it is a certain game between a team from Indianapolis and a team from New Orleans.