NFL Lawsuit: What it Could Mean for Gamers

The Supreme Court of the United States is scheduled to hear the American Needle v. NFL case today and a decision could have an impact on gamers.

The crux of the case has American Needle contending that the NFL’s exclusive apparel agreement with Reebok limits competition and is a violation of the Sherman Act, in part because the NFL’s (consisting of 32 privately-owned teams) and NFL Properties’ (equally-owned by all 32 teams) agreement with Reebok does not allow for American Needle to negotiate apparel deals with individual NFL teams.

It’s also argued that the exclusive contract with Reebok has led to higher prices for consumers.

The NFL claims that it acts as a single entity, even though it is comprised of numerous teams.

LawsofPlay offers some opinions on the case and what might happen once a ruling comes down.

On the NFL as a single entity:

While there are a number of good reasons to maintain the NFL’s current licensing arrangements, it does not seem to me that the long history of competition between NFL teams–including ticket sales and media rights–supports the idea that the NFL should be considered a single entity.

Things could get weird in the videogame world if the NFL loses the case. LawsofPlay serves up this scenario:

Rather than appealing to a single business or organization, such as the NFLP, publishers would be able to negotiate with individual teams.  While this could lead to more competition in the sports gaming markets, it could also lead to really wonky arrangements–imagine EA releasing an NFL game with 20 NFL teams and a dozen or so fantasy teams to round out the roster while 2K releases a game with the 12 NFL teams missing from EA’s game and a handful of its own fantasy teams.


…publishers could consider the cost to license individual marks and opt only to enter into agreements with the teams that seemed economically “worth it.”  After all, it is possible that a publisher does not derive as much value from including the Lions in their game as they do from including the Packers.

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  1. 0
    JDKJ says:

    That’s not at all true. American Needle’s position is the exact opposite, i.e., that individual NLF teams do compete with each other for revenues. Take, for example, the 49ers and the Raiders. They’re a bridge-crossing from each other. For all practical purposes, they’re in the same town. I can just as easily go to a Raiders game as I can go to a 49ers game, if I live in the Bay Area. And I can buy either a 49ers jersey or a Raiders jersey online from New York City. And that jersey sales revenue is shared with the teams on a pro rata basis (i.e., the teams with more of their jerseys sold get a larger share of the jersey sales revenue). That’s competition between the teams for revenue, isn’t it? 

  2. 0
    jedidethfreak says:

    Your entire post fails from your second paragraph.  NFL teams are not "competing entities" in that they don’t compete with each other for revenue.  They only compete in the sport itself, and whatever is related to that.  To prove my point, I live in Minnesota, five miles from the Wisconsin border.  However, my local radio station doesn’t air commercials advertising Packers tickets.  Besides the fact that Packers tickets – at least, home games – are VERY hard to come by, this is because the Packers, as a franchise, aren’t competing with the Vikings for my money.  Therefore, they are not competing entities.  By that definition, the NFL is looking for this protection, with the support of the team owners.

    Funny how everybody talks about the "Team IP," but don’t take the wishes of the IP owners into account.

    You KILL Vampires. You don’t DATE them.

  3. 0
    jedidethfreak says:

    The problem is, outside of the license fees, the games with only 1 or 2 NFL teams will cost the same to make as the one with all 32.  Now, the problem is you’re going to be reducing the audience exponentially, to the point where it would be hard – if not impossible – to recoup those losses.

    As far as movies or other related media, nobody makes a movie about only one team without featuring other teams.  Even passing mentionings of other teams require the license, and you’ll end up mentioning the NFL anyway.  So, instead of getting the license from the NFL to use all of it, you need to get licenses from the NFL AND all of the teams you’ll feature, which will most likely be at least 16 teams, if you don’t mention ANYTHING going on in an opposing conference.

    You KILL Vampires. You don’t DATE them.

  4. 0
    ZippyDSMlee says:

    So they can not together with the NFL as the whole IP and the teams as part of it, can’t they work together in a agreement to make money off their IP"s" either as one whole or a part for terms of licensing for films,games,books ect,ect?

    Until lobbying is a hanging offense I choose anarchy! CP/IP laws should not effect the daily life of common people!

  5. 0
    AP says:

    A parent company and its wholly owned subsidiaries count as a single entity for the sake of antitrust law. This is because the subsidiaries do not technically compete with each other. So, this decision would most likely have no affect on your publishing business.

    The NFL situation is different because the teams are NOT subsidiaries of the NFL. Instead, they are a bunch of competing entities that are conspiring to make licensing agreements.

    Think of it like this: Imagine if all of the milk producers in the country got together and formed the Nation Dairy League. Together, the member-producers of the NDL agree that no one will sell milk independently. Instead, any store that wants to buy milk has to buy it from the NDL, which divides all revenue evenly between the member milk producers. Now, say the NDL decides it will only sell milk to one company–we’ll say Giant Grocery for the sake of this example.

    Suddenly, any time you need milk you have to go to a Giant grocery store. And what do you think is going to happen to the price of milk? It will sky rocket because Giant knows that milk is desired by a large portion of the population and it is the sole merchant with a supply of milk. This is exactly what is happening with NFL apparel.

    Now, imagine if the NDL had never been formed. Individual grocers can bargain with individual milk producers to try and find the best price and products. Milk producers and grocers will both be forced to compete in order to offer the best value to consumers. Some stores may choose to purchase milk from a large number of producers in order to increase selection for its consumers and others may choose to use a sole supplier.

    This second scenario is what would happen if the NFL loses this case. Individual game developers/publishers can negotiate individual licenses with NFL teams. Companies like EA will want to obtain a license with every team, but other developers may choose to only licenses a few teams for an arcade-style NFL game. In either case, the developers are free to choose what is best for their target audience. They are not forced to pay for more than they desire nor are they completely locked out from negotiating with any teams.

    Now, these individual teams could still choose to deal with EA exclusively, but the difference is that the conspiracy is gone. Each team is deciding what is in its own best interest. Certain teams will know that their trademarks are worth more and will want to negotiate a higher price; other teams may not be able to command as high a fee. Regardless, far more opportunities for competition will arise and game developers will be forced to truly compete in order to give consumers the best value for their gaming dollar.

  6. 0
    ZippyDSMlee says:

    Thats hardly the point there are more than enough plots and what not that only need a team or 2 license to  market. you can’t predict what will and wont sell untill you allow it to sell…. and you can not sell it with how the league has things set up.

    Until lobbying is a hanging offense I choose anarchy! CP/IP laws should not effect the daily life of common people!

  7. 0
    hellfire7885 says:

    People bought games centered around just on athlete in the past, so I don’t see hwo this coudln’t work. I mean, your audience may be limited ot fans of those teams, but soem audience is better than none.

  8. 0
    Defenestrator says:


    Nobody would buy a "Dallas Cowboys Pro Football" game and likewise nobody would want an "Madden NFL But Not the Cowboys" game.

    I work for a publishing company what works under the umbrella of one name, but we have about 10 different publishing divisions who operate on their own (i.e. 10 different "teams" if you will).  We have in place contractual agreements with vendors who are granted exclusivity to produce our materials.  It’s really no different.

    If the NFL loses this case it actually could have ramifications for plenty of other businesses.

    On top of that, even if the clothing company wins, the NFL could still tell them to piss off.  They don’t have the right to produce licensed apparel if they don’t have the license.

  9. 0
    ZippyDSMlee says:

    The point that you as a film or game producer can go to the teams directly and work out a smaller deal to do a project than having to license the whole thing to just do to do 1 or 4 teams.

    Until lobbying is a hanging offense I choose anarchy! CP/IP laws should not effect the daily life of common people!

  10. 0
    jedidethfreak says:

    I understand the issue, but my question is, why would anyone want to?  What would the advantage be in getting only SOME team licenses, and not all?  The example of an NFL game with only 20 real teams, while the other twelve  are on a different game, is not an ideal situation for anyone (even people who know how much the Lions suck).

    Can anyone think of a reason why something like this SHOULD be done?  I say clothing is out, too, as the NFL uses it’s buying power (that none of the teams would ever come close to matching) to get better prices for the teams.  The NFL provides the basic equipment.

    You KILL Vampires. You don’t DATE them.

  11. 0
    AP says:

    I don’t think you understand the underlying issue. The current agreement prevents developers from negotiating deals with individual teams. If this practice is overturned, developers would be free to negotiate unique licensing terms with individual teams. The author isn’t advocating anything, merely pointing out possible scenarios. If you read the entire post it clearly says that simulation-style games (like Madden) will always prefer to have all 32 teams.

  12. 0
    jedidethfreak says:

    At the very least, your new QB is a step in the right direction.  Now you just need to build a team – the whole team, get rid of everyone – around him, and you might have a chance at being a halfway decent team someday.

    You KILL Vampires. You don’t DATE them.

  13. 0
    SeanB says:

    I’ve said it before and i’l say it again.

    If enough people feel strongly about this, they have a legal right to show their disgust by NOT BUYING THE PRODUCTS.

  14. 0
    jedidethfreak says:

    As I understand it, that’s pretty much how it is already, with the exceptions of things like official gear and licensing issues.  The Vikings can do whatever they want with the Vikings brand, outside of those caveats.  Also, keep in mind that the team owners (also owners of the IP) WANT what the NFL is going for.  They don’t want to have to deal with the kind of crap the person in the article seems to want.

    Anyways, who would play an NFL game that only has a limited number of official teams?  I thought that the argument against EA’s lock-in was that it makes it so games without real teams can’t compete.  This guy is really advocating that we allow competition by dividing the teams between developers?  What a tool.  If it says NFL on the cover, it better have all 32 teams on it.

    You KILL Vampires. You don’t DATE them.

  15. 0
    ZippyDSMlee says:

    Its rather simple to me let the teams sale their IP out according to rules and limits set by them all and give 30% of their profit to the league. And the league itself can sell the IP of all its members in one go giving 5% cuts to the teams or whatever. Everyone wins…..

    Until lobbying is a hanging offense I choose anarchy! CP/IP laws should not effect the daily life of common people!

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