Saturday, July 18, 2009

Supreme Court to hear what could be "the most significant sports law decision ever."

A court case between the NFL and a American Needle, Inc. could reshape the sports landscape in America forever, according to ESPN.

What is the case?
The legal doctrine at the center of the case is known as "single entity." If the NFL manages to persuade the Supreme Court that the league is a single entity competing with other providers of entertainment rather than a group of 32 separate businesses competing with each other, the landscape of the sports industry will be transformed, according to law professors and experts contacted by ESPN.com.

If it is a single unit and not 32 separate, competing teams, any violation of American antitrust law would be impossible to establish. A violation of the Sherman Act begins with a "combination, contract or conspiracy" that restrains competition and hurts consumers. If the NFL is a single unit, it cannot be in combination, contract or conspiracy. It would be immune to the antitrust cases that have allowed player unions to establish and to protect free agency and other benefits.
In other words, teams agreeing to sign players or coaches only at a certain salary wouldn't be considered collusion -- because it would be within a single company, the NFL.

There wouldn't be 32 teams competing with eachother, but rather one entertainment company competing with... well, no one.

And what makes this particularly significant is that if the NFL gets its way, the ruling would also apply to the other major sports leagues in the United States as well. Roger Goodell would suddenly be the man atop one of the biggest business empires in all of the world.

Or, as the ESPN column calls it, "one of the most powerful cartels ever."

There would be no recourse in antitrust cases, as the NFL players union successfully used to create free agency in the 80s and 90s.

So what will the effect be for the fans?
Leagues will enjoy unfettered monopoly powers.

Salaries for players and coaches will drop.

Free agency will wither away.

Sponsors will pay more.

Fans will pay more for tickets, television and Internet broadcasts and for paraphernalia.

And owners' profits will soar.

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