Supreme court rules that NFL is 32 teams not 1 league

[CenterIce 83]

http://sports.espn.go.com/nfl/news/story?id=5214509

First, I know this is a story about the NFL, but I know all the leagues were watching this closely, because it impacts the control they have over all their teams. Think of the Rangers not wanting the NHL to take control of their website and other media. Also, Phoenix trying to sell to Jim Balsillie, without the NHL's consent. Then, their are the anti-trust issues that the leagues have been fitting with over the years. With this decision, we could start to see sports teams taking more control of their own concerns.

[Drake_Marcus 890]

Now this is an interesting legal precedent... Bettman will not be pleased.

[servo 15]

I just saw this on Sports Center in the lounge of my hospital. The 1st thing I thought of was this whole Phoenix situation. Interesting to say the least. Again, you shouldn't model our league after a collosal money monster like the NFL, but any legal ruling against an organization as big as the NFL certainly will have ramifications on how the NHL if forced to govern it's teams to a CBA.

Very timely!

[Guest EZBAKETHAGANGSTA]

This is huge, if not a few years too late.

[RedWingAbner 13]

Won't matter much. Sure, a team could say "We are an independent team. We'll sign whoever we can for whatever we can."

One league owns the Stanley Cup--the NHL. As long as they play a season, the NHL can say who plays for it. Good luck trying to do that if you break a rule the NHL sets up.

[Gizmo 21]

For the NHL, I think the biggest short term impact might be the end of the RBK monopoly on jerseys.

http://sports.espn.go.com/nfl/news/story?id=5214509

First, I know this is a story about the NFL, but I know all the leagues were watching this closely, because it impacts the control they have over all their teams. Think of the Rangers not wanting the NHL to take control of their website and other media. Also, Phoenix trying to sell to Jim Balsillie, without the NHL's consent. Then, their are the anti-trust issues that the leagues have been fitting with over the years. With this decision, we could start to see sports teams taking more control of their own concerns.

I think you may be reading too much into the case. The case is about the the NFL's attempt to enforce licensing contracts with 3rd parties across all of the teams in obvious violation of antitrust laws.

[IceMunkee 15]

This is very interesting. I wonder what the effects could mean. Good find / Post.

[CenterIce 83]

For the NHL, I think the biggest short term impact might be the end of the RBK monopoly on jerseys.

I think you may be reading too much into the case. The case is about the the NFL's attempt to enforce licensing contracts with 3rd parties across all of the teams in obvious violation of antitrust laws.

Yes, and that is why I included the fact about the Rangers not wanting to give control of its website and other marketing tools over to the NHL. However, this could definitely open a can of worms, depending how much teams or player unions in individual leagues want to push this, especially at CBA negotiation times, as someone posted.

Edited May 24, 2010 by CenterIce

[Gizmo 21]

Yes, and that is why I included the fact about the Rangers not wanting to give control of its website and other marketing tools over to the NHL. However, this could definitely open a can of worms, depending how much teams or player unions in individual leagues want to push this, especially at CBA negotiation times, as someone posted.

I think this ruling will have little bearing on the relationship between member teams and the NHL. The core of this case was about the NFL, arguing that it was a single legal entity, interfering with existing contractual relationships with individual teams in an effort to "collude" and grant exclusive single vendor contracts with the consumer, arguably, being the looser. Here's a good summary from SI that points out the narrow scope of the case:

In an unsurprising and unanimous decision, the Supreme Court held today that the NFL and its independently owned teams are subject to Section 1 of the Sherman Act when entering into licensing contracts. The decision in American Needle v. NFL, which reverses a previous ruling from the U.S. Court of Appeals for the Seventh Circuit, effectively ends the NFL's decades-long quest for immunity from Section 1, the leading source of antitrust law in professional sports.

The NFL has long argued that while its teams compete on, and in some ways off, the field, they should be viewed as a "single entity" for many of their business practices. Because Section 1 only regulates collaborations by competitors, single entities -- which courts have traditionally limited to parent companies and wholly-owned subsidiaries on the premise that they necessarily collaborate -- are not subject to it.

The applicability of Section 1 to contracts and other business agreements matters considerably. If subject to Section 1, agreements are scrutinized for their impact on consumers and prices, with contracts that raise prices or diminish supply particularly susceptible to legal challenge. In contrast, agreements immune from Section 1 can raise consumer prices or produce other economically-concerning effects often without legal consequence.

Read More: http://sportsillustrated.cnn.com/2010/writers/michael_mccann/05/24/nfl.antitrust/index.html?eref=sihp#ixzz0oseptecB

What would have been a bombshell is if, as player's unions feared, the Court had sided with the NFL and granted them Section 1 exemption. This would have emboldened them to impose new labor conditions as the article points out. Since the court sided against the NFL, that's an endorsement of the "status quo" for the legal status of the NFL in terms if their antitrust limits. In another words, the SCOTUS said that the Sherman Act still applies to them in areas not already exempted by Congress.

As for the Ranger's website complaint, I doubt that'll come into play. That's more along the lines of a legal relationship between a franchisee and the parent organization. I doubt that this ruling would block McDonald's HQ from prohibiting a local franchise owner from running their own marketing campaigns if they so chose.

Edited May 24, 2010 by Gizmo

[CenterIce 83]

I think this ruling will have little bearing on the relationship between member teams and the NHL. The core of this case was about the NFL, arguing that it was a single legal entity, interfering with existing contractual relationships with individual teams in an effort to "collude" and grant exclusive single vendor contracts with the consumer, arguably, being the looser. Here's a good summary from SI that points out the narrow scope of the case:

The NHL and other leagues have actually been worried about this result and the effect it could cause. The other leagues filed motions of suport for the NFL during the hearings. This has the potential to be very far reaching.

Puck Daddy

Edited May 25, 2010 by CenterIce

[toby91_ca 620]

Not sure how much this really impacts anything. I've seen a lot of franchise models, beyond sporting leagues...i.e. businesses like Little Casears for example. Every franchise model is different and it all depends on the arrangements and legal agreements. However, what I normally see is clauses that suggest a Franchisee (team owner for example) cannot simply sell their Franchise right to another individual without the Franchisor (league for example) approving such a sale. This makes total sense because in the real world (beyond sports) a Franchisor would first screen prospective Franchisees before awarding someone with a Franchise, so they aren't going to want a new Franchisee to come on board without them having the right to approve.

From my perspective, it was very frustrating with the Basillie scenario, but I can totally understand why it works the way it does. There must be a lot more going on behind the scenes that I don't know about because keeping a guy like Basillie out is strange to me. I understand it's been wrong the way he's tried to get in, etc., etc., I get it, but the NHL has gone at lengths to keep him out, which I don't get. I think the biggest reason is them trying to protect their existing Franchises and avoid teams moving. If you are a resident of a such a city where you could lose your team, I guess I can see that I being a really good thing, you don't want your team uprooted, but there comes a time where enough is enough.

[mikl657 2]

so does this mean that bassilie (w/e his name is) could buy a team and move it if he wishes?

[eva unit zero 271]

From my perspective, it was very frustrating with the Basillie scenario, but I can totally understand why it works the way it does. There must be a lot more going on behind the scenes that I don't know about because keeping a guy like Basillie out is strange to me. I understand it's been wrong the way he's tried to get in, etc., etc., I get it, but the NHL has gone at lengths to keep him out, which I don't get.

so does this mean that bassilie (w/e his name is) could buy a team and move it if he wishes?

Jim Balsillie attempted to purchase the Pittsburgh Penguins, with rumors that he was interested in moving the team to both Kansas City and Hartford. He even followed the normal processes. He was approved as a potential owner and everything, the only thing that needed to happen was for the sale to be finalized. But ultimately Lemieux's group was the winner of the day.

Balsille then attempted to purchase the Predators. To prove that his was the best bid, he began taking deposits for season tickets for the Hamilton Predators, without consent from the Preds' owner or the League to use the trademarked logos and name.

Finally, with Phoenix he actually resorted to paying then-owner Jerry Moyes, who was suffering losses on the team, to declare bankruptcy so that he could attempt to acquire the team that way. We're all familiar with that case.

Each team is a separate entity, but they are all franchises affiliated within their respective leagues. For example, had Balsillie won the Phoenix case, and moved the team to Hamilton, the league could have simply removed the team from the NHL and prevented them from having any chance at competing for the Stanley Cup.

It again all comes back to the McDonald's analogy. A group of individual businesses affiliated beneath a parent business. Not required to be identical, but all required to follow certain rules and regulations, while quite a bit of leeway is given elsewhere.

[MacK_Attack 108]

One league owns the Stanley Cup--the NHL. As long as they play a season, the NHL can say who plays for it. Good luck trying to do that if you break a rule the NHL sets up.

If you want to get technical, the Hockey Hall of Fame owns the Stanley Cup. The NHL simply has control of it for the purposes of it being their championship trophy.

[Barrie 900]

As someone who owns 40% of a small business, I think I'm in favor of the ruling.

[Konnan511 1,736]

Now this is an interesting legal precedent... Bettman will not be pleased.

Why would he be. Welcome to a league with 20 NHL teams in New York and New Jersey and 10 in LA.