The following article published by The Nation was co-written by SFC board member Dave Zirin and SFC managing editor Jeremiah Tittle.
(It can also be found in the NEWS section on this site.)
Call it the Super Bowl for lawyers and the reckoning for football fans. On January 13 the owners of all thirty-two NFL teams asked the Supreme Court to shield them from anti-trust laws. Their argument is that the league does not comprise, despite all evidence, thirty-two individual competing units but is made up of one “single entity.”
This might seem bizarre on the face of it. After all, the 49ers and Cowboys don’t meet on the field to sing “Kumbaya,” and players don’t rotate from team to team. But the NFL has won in court every step of the way, and the outcome of this case could provoke a labor lockout or strike that would shut down the most popular sport in the country.
The legal saga started in 2000, when Reebok signed an exclusive contract to slap the NFL logo on its caps and jerseys for every team in the league. Illinois-based hat manufacturer American Needle was, in turn, left out in the cold, no longer allowed to strike deals with individual teams; so it therefore sued the NFL, claiming that by brokering this deal with Reebok, the NFL had violated the Sherman Act.
To the NFL, it was like discovering penicillin. This small merchandiser had been growing like a pestering fungus until that Aha! moment hit, and the league’s legal team realized the opportunity before it: a chance to knock out competition among apparel providers.
While the NFL repeatedly won the case in the lower courts, American Needle appealed to the Supreme Court for a hearing. The Court first reached out to the Obama administration to weigh in on the matter. Solicitor General Elena Kagan told the justices, “This case would be a particularly unsuitable vehicle to consider the broad rule that the NFL seeks.” Heedless of Kagan’s warning, the Supreme Court took the case, and with the NFL’s support, American Needle’s wish was granted. Now the “single entity” argument will be tested at the highest level, and, like the MLB All Star Game, this time it counts.
To anyone who pays attention to the billion-dollar catfight between Jerry Jones, owner of the Dallas Cowboys, and Dan Snyder, owner of the Washington Redskins, each year, in which a new owner is crowned at the unveiling of the franchise value rankings, the idea that the NFL is one company and not thirty-two competing businesses is just absurd. They are called franchises for a reason. Each franchise makes individual business decisions about how to market its product against opposing franchises wearing different-colored uniforms.
However, the NFL insists that even though it is made up of individual teams with individual profits and losses, it is still that “single entity.” As the sports experts at Forbes wrote, “From a business standpoint, the NFL, like any sports league, has always predominantly acted as a single entity. Teams compete on the field, which does mean bidding on players and coaches. But from a business standpoint, they’re partners above all else.” Forbes, “the capitalist’s bible,” turns collectivist. Why?
It’s simple. The NFL’s collective bargaining agreement expires in March 2011. There will be no salary cap or salary floor in the league if a new deal isn’t reached by March 5, 2010. If the Supreme Court rules that the NFL is a single entity, that changes the way the league negotiates—or doesn’t negotiate—with the players. Teams could slash payroll, violate labor law, and the NFL Players Association would have no recourse. Lockout, here we come.
DeMaurice Smith, NFL Players Association executive director, has told ESPN that he has called upon his players to save 25 percent of their salaries over the next two years: because of uncertainty around salary caps and floors, “I look at the way in which it looks like we’re moving to this lockout, and first and foremost, we have to be in a position where our young men are in a position to be able to take care of themselves and their families.”
New Orleans quarterback Drew Brees took a break from preparing his team’s Super Bowl run last week to deliver some Supreme Court testimony. In an op-ed published in the Washington Post, Brees warned that “if the Supreme Court agrees with the NFL’s argument that the teams act as a single entity rather than as 32 separate, vigorously competitive and extremely profitable entities, the absence of antitrust scrutiny would enable the owners to exert total control over this multibillion-dollar business.”
Serving on the Executive Committee of the Players Association, Brees understands that the players’ collective future hangs in the balance. The owners are looking to knock labor rights back into the Stone Age, or at least back to 1993, before Freeman McNeil, football’s Curt Flood, left a mammoth footprint on the game by fighting for and winning his rights as a free agent. The players sink or swim with the final decision to be delivered this summer.
It would be even worse for fans, and not only because the Sunday entertainment would go the way of Lost.
If owners were emancipated from anti-trust laws, collusion would be the law of the land. After all, they aren’t thirty-two competing entities but one solid corporation. They then could do more than slash payroll. They could raise ticket prices through the roof, and charge $100 for a stocking cap. The NFL-Reebok deal struck a decade ago illustrates quite clearly how the costs of doing business this way are passed on to fans, as “official hats,” Brees notes, “cost $10 more than before the exclusive arrangement.”
Owners could move clubs on a whim, and be protected legally from violating any individual agreements with individual municipalities. After all, they would be acting in the interest of their “one entity.”
In other words, think about everything you despise about the NFL experience: disloyal franchises, overpriced merchandize, unbridled greed, and give it an injection of a Mark McGwire cocktail. The NFL already acts like it has diplomatic immunity. It feeds at the public trough for stadium construction, charges a fortune for tickets, parking, souvenirs and—most tragically—beer, and accepts public input about as well as the CIA does. It is also about as transparent.
In addition, if we’ve learned nothing else from the scandals in banking and on Wall Street, the last thing big business needs in this country is more legal protection and less transparency. We all—fans and players alike—have every right to fear what further legal protection would mean for the future of fandom, no matter what they say at Forbes.





Hi. I am a long time reader. I wanted to say that I like your blog and the layout.
Peter Quinn
Fans responsible for NFL 100%, owners 0%.
Fans get 12% of Super Bowl tickets, celebrites get 88%.
Owners plan to start pay-for-view leaving most arm-chair-fans out in the cold.
Owners now show lots of games on the NFL Network which million of viewers don’t have.
Owners are allowed to move teams form town to town without concern for the fans.
Fans pay 1000% above the norm for concessions at arenas.
Let the owners know your concern. Unite now. Join the new, not-for-profit, organization “The NFL Fans Association” Help leave message.
‘nfl-pro-fan.com’
Wow, not to sound condescending, but this only has about 15% of truth to it.
The NFL’s single entity argument would not allow it to violate federal labor laws. The NLRA would apply just as it does now. The players’ union is only interested in this case because (1) they want a bigger share of the apparel proceeds to go to players, and (2) they’re rightfully concerned that increased apparel proceeds will further increase the league’s ability to weather (and therefore to implement) a lockout in 2011. That’s it.
The league is still obligated to bargain in good faith, still cannot discriminate on the basis of union membership, etc., etc. Not surprisingly, it’s just about the money from EVERY angle (labor and management). The assertion that the union “would have no recourse” is truly puzzling. The MISL was set up as a single entity and was regularly targeted in unfair labor practice proceedings before the NLRB.
Nor would the NFL’s single entity argument have any impact on municipal leases, etc. If anything, this would be a positive for cities with teams. Let’s say the Browns broke their lease with the City of Cleveland (again). The Browns’ franchise would be acting as the agent of the ENTIRE league. This means the city can go after the assets of the entire league, not just the particular franchise in question. This being the case, my guess is that the single entity argument, if successful, will discourage team relocation if it has any impact at all.
Regarding ticket prices, it’s true that teams would be able to engage in price-fixing if the league is successful. But if you think that isn’t happening now, I have some great investment opportunities I’d like to discuss with you. In any event, price-fixing in the NFL context is meaningless, which may be one of the arguments the league is asserting. NFL teams don’t compete against each other in selling tickets. Has anyone ever looked at the ticket prices of various NFL franchises and decided which game(s) to see based on a reasoned comparison of the “value” they expect at different stadiums vs. the cost of purchasing the ticket? Of course not. We go because we’re fans, i.e. fanatics. We don’t use logic or reason, we just root for the team we love. And, we probably don’t decide which team we love in the league based on their ticket prices. In any event, not many of us have a realistic option of seeing more than one NFL team on a regular basis.
If there is competition in regard to NFL ticket prices, it’s competition with other events in the same city (and that’s probably stretching it). The NFL’s single entity position would have nothing to do with setting prices for non-NFL events and whatever competition exists now in that regard wouldn’t change. Yes, the league might be able to “subsidize” some teams and allow them to set their ticket prices artificially low, but they do that already through revenue sharing. Again, nothing to see here.
I’m certainly not an economist (INSERT GRATUITOUS “nor do I play one on TV”), but my guess is that this will have its biggest impact in relation to apparel and concession prices, and I’m fairly certain that’s what the league intends. Being a single entity, the league can offer exclusive apparel rights, for example, which they can charge more for than simple, non-exclusive licensing rights. Regarding concessions, they might enter into a nationwide agreement with Aramark to sell concessions, for which Aramark would be willing to pay considerably more (obviously) than it would for concession rights at 3 or 4 stadiums. The increased costs for the vendor will eventually come out of our wallets.
That said, I’m not sure how big a deal this is. In terms of apparel, I can’t really get too excited over the fact that someone who just has to have that “officially licensed” Drew Brees jersey is going to have to pay $15 more for it. It’s not an essential. Personally, I’m a bit more irritated about the concessions. But whether I pay $8 or $11.50 for a beer, my rear end will feel pretty equally violated.
You’re certainly entitled to have your own opinion about the issue, but as we’ve documented in past articles, it is not only The Nation magazine willing to put its support behind the claims and warning posed in the piece.
CBS Sports:
http://www.cbssports.com/columns/story/11976030
The San Francisco Chronicle:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/12/20/ED671B5TG3.DTL
The LA Times:
http://www.latimes.com/news/nation-and-world/la-na-nfl-court4-2010jan04,0,1714398.story
And Mr. Disney World himself, Drew Brees, wrote an Op-Ed which appeared in The Washington Post:
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/07/AR2010010702947.html
While Goodell and the NFL owners might brush this off as a narrow focused and ultimately inconsequential Supreme Court case to the sports fan (watch this video at the 5 minute mark http://www.nfl.com/videos/nfl-super-bowl/09000d5d8163a83b/Roger-Goodell-press-conference-part-1), there really is grave danger to not only you who are concerned about the costs of concessions (We agree…God forbid beer prices rise faster than inflation!) and merchandise costs but to all those low income taxpayers helping to pay for NFL stadiums already who won’t see the inside of the next ‘sponsor to be named later’ coliseum. The argument is not that the Seahawks and Jaguars are marketing their tickets to the same fans. It is the fact that you admitted concerning fixing ticket prices. While you mention that it is done all the time off the books today, it is not legal. This court case could change that, and that is reason alone to speak out against an expansive ruling in the Supreme Court. The NFL, as a single entity, could collude, or work together, to pay players less, to trade players, etc. at will. Also, the Browns can afford to pay or at least to fight Cleveland in court over breaking their lease-agreement. The benefit of having the NFL back up a particular franchise would only come into play if the city were sued for a sum much greater than the actual value of the club.
The NFL legal team has been looking for any way possible to get what Major League Baseball has: tax-exempt status. While you are right that it would rid them of the hassle of these battles in court, there is much more to it.
Treating an entire league as one company rather than competing companies trying to get you to like their team is a real phenomenon. Would you also argue that the Cowboys’ tag of ‘America’s Team’ or the Yankees dominance of the merchandising market in baseball are seen as non-threatening to opposing franchises? ‘Good for them’, the Redskins and Red Sox organizations are genuinely happy for them to succeed in the world of business, let alone the field of play. I think not.
Despite all of this, your comment did hit the nail on the head when you wrote that it is all about the money. There’s no question about that.
That’s why we’re fighting this. The NFL is trying to get stronger, and who do you think will lose purchasing power inside the stadium, when buying the ‘official’ jersey, or paying seat licenses before the season ticket bill lands in the mailbox? Sports fans.
Fans responsible for NFL 100%, owners 0%.
Fans get 12% of Super Bowl tickets, celebrites get 88%.
Owners plan to start pay-for-view leaving most arm-chair-fans out in the cold.
Owners now show lots of games on the NFL Network which million of viewers don’t have.
Owners are allowed to move teams form town to town without concern for the fans.
Fans pay 1000% above the norm for concessions at arenas.
Let the owners know your concern. Unite now. Join the new, not-for-profit, organization “The NFL Fans Association” Help leave message. ‘nfl-pro-fan.com’