Supreme Court Case May Impact EA’s NFL Exclusive

A non-gaming case currently before the United States Supreme Court stands to have a massive impact on the video game industry.

The case is American Needle vs New Orleans Saints, et al. Should the Supreme Court find in favor of plaintiff American Needle, an apparel manufacturer, EA’s exclusive NFL licensing deal and Take-Two’s third-party exclusive with Major League Baseball could be found in violation of federal antitrust (i.e., monopoly) statutes. Such a determination would free other publishers to make games based on the NFL and MLB.

SCOTUSblog, which tracks happenings before the Supreme Court, reports on the case:

The NFL used to license American Needle to sell hats that bore the logos, the names or other insignia of pro football teams… But, in 2000, the NFL opted to solicit bids for an exclusive license to produce caps and other headwear.  Reebok won the bidding, and in 2001 got an exclusive ten-year license.  American Needle’s license was not renewed. So it sued the NFL, all of its teams, NFL Properties, and Reebok.

American Needle’s case was thrown out by lower courts… “The [Supreme] Court has stated, on more than one occasion,” American Needle asserted, “that application of the Sherman Act to professional sports teams is wholly consistent with Congressional inent…”

What happened to American Needle in relation to apparel is essentially what happened to Take-Two in regard to its excellent NFL2K series when EA scored its exclusive license with the NFL in 2004.

Attorneys for EA are clearly tracking the American Needle case. The phrase "American Needle" appears nine times in a transcript of arguments made by attorneys last November in Pecover vs. Electronic Arts, a class-action suit which alleges that consumers were hurt by EA’s NFL exclusive (see: Spirited Courtroom Argument Highlights Madden Monopoly Case).

SCOTUSblog reports that the Supreme Court has requested government lawyers to weigh in on the case.

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