The Supreme Court said on Monday that the N.F.L. is an “unincorporated association of 32 separately owned professional football teams,” not a single business, for the purposes of selling branded jerseys and caps.
The unanimous ruling in American Needle Inc. v. National Football League was a reversal of a controversial lower-court ruling and amounted to a defeat for the league, which had sought protection from challenges to its business on antitrust grounds, legal experts said. In effect, the court said the N.F.L. was still open to antitrust scrutiny, as it has been for years.
The case was brought by American Needle, an apparel maker from Illinois that lost its contract with the league when the N.F.L. entered into an exclusive 10-year, $250 million deal with Reebok in late 2000 to produce hats, jerseys and other league-branded merchandise.
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American Needle argued that the league’s deal with Reebok violated antitrust law because the N.F.L. was a collection of individually owned teams that compete with one another, not a single entity able to negotiate contracts on behalf of its teams. By striking a deal with Reebok, the league effectively conspired to stifle competition, the company argued.
American Needle appealed to the Supreme Court after it lost a federal court ruling that favored the N.F.L.