Supreme Court rules vs. NFL in merchandise lawsuit

The Supreme Court ruled unanimously Monday in a closely watched case that the NFL cannot act as a single business in negotiating deals such as selling jerseys and caps. The decision in the suit brought by American Needle reversed a lower court's ruling.

American Needle, an Illinois apparel maker, provided merchandise for individual NFL teams until the league signed an exclusive 10-year deal with Reebok in 2000.

The NFL had hoped the court would grant it broader protection from suits on antitrust grounds. Now it will remain open to that criterion, as is every sports entity other than Major League Baseball, which has had a broad antitrust exemption for decades.

American Needle's argument was that the NFL is a collection of separate businesses that compete with one another and thus improperly limited competition by contracting with Reebok.

Wrote Justice John Paul Stevens: "The teams compete in the market for intellectual property. To a firm making hats, the Saints and Colts are two potentially competing suppliers of valuable trademarks.''

Stevens made a distinction between the cooperation necessary for the league to function and the fact that the teams are independent businesses. He wrote a "nut and a bolt can only operate together,'' but that doesn't exempt deals between nut and bolt manufacturers from antitrust scrutiny.

The matter will head back to district court, which must rule based on the Supreme Court's ground rules.

Many legal experts considered the case a long shot for the NFL. Its implications are unclear, but certainly would have been greater if the ruling had gone the other way. In theory, the resolution of the NFL's status could ease the path to revived collective-bargaining talks.

The players' union hailed the decision, but the NFL rejected a link between it and ongoing talks with the union.

"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 NFL said in a statement. "The Supreme Court's decision has no bearing on collective bargaining, which is governed by labor law."