NFL Case Could Impact Sports Game Licenses

The U.S. Supreme Court is scheduled to hear the case of American Needle v. NFL next week and perhaps give the NFL broader protection against antitrust lawsuits.

At the heart of the case is an exclusive deal that the NFL has with Reebok as the official seller of hats,. jerseys and clothes using team insignias. American Needle lost its right to sell those items when the league reached the deal with Reebok in 2000.

Where this impacts the videogame industry is the exclusive license that Electronic Arts has with the NFL as the sole purveyor of an NFL-branded videogame with the Madden NFL series. According to a Reuters article:

A broad ruling could insulate professional sports leagues from antitrust claims over video-game licenses, television rights, franchise relocation and even player salaries. Only Major League Baseball is exempt from antitrust laws now.

In the past, the court has kept a tight rein on antitrust suits, and legal analysts say that the mere fact that the court has agreed to hear the case means it could be sympathetic to the NFL’s claims for broader protection.

The case for the NFL, according to brief it filed:

“A sports league produces a single entertainment product, a structured series of athletic competitions leading to a championship, that no member club could produce on its own."

However, American Needle countered with:

“The teams are separately owned and controlled profit- making enterprises. They are actual and potential competitors in numerous areas, including the licensing of intellectual property.”

Electronic Arts has come out on the side of the NFL for obvious reasons, and the antitrust protection for the NFL could ensure EA’s deal from outside interference as long as the NFL sees fit to continue the contract.

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