American Needle takes on the NFL
On Wednesday, Jan. 13, the U.S. Supreme Court will take up an appeal from a small hat maker in Buffalo Grove, Ill., who wants to apply antitrust laws to the National Football League.
The result of the case could determine how much you spend at the ballpark for team apparel and a whole lot more about the business of professional sports.
American Needle is a family-owned hat company that has been in business for almost a century. Its early claim to fame was making those green eye shades that bank tellers wore. It broke into athletic hats early and found success selling Cubs caps at Wrigley Field. American Needle manufactured caps for pro teams until the NFL decided in 2000 to make an exclusive deal with Reebok. The result, claims American Needle, was a big jump in the price of caps, from $19.99 to $30. (Click here to read New York Times story on American Needle.)
If you're disgusted with the Rams and Bears and just want a Cards or Cubs cap, you still need to worry about the Supreme Court case. If the court decides that the NFL can take over apparel decisions without running afoul of antitrust laws, the other professional sports leagues probably can too.
The legal issue is whether the NFL should be considered as a single entity that can make a business decision without violating antitrust laws, or whether it comprises multiple businesses that would have to conspire in violation of antitrust laws to make a business decision. The NFL claims it is one entity and the lower federal courts in Illinois agreed, at least as it relates to sports apparel. Even though the NFL won in the lower courts, it took the unusual step of also asking for Supreme Court review, apparently in hopes of expanding its exemption from antitrust laws.
Depending on how broadly the Supreme Court rules, the decision could even affect negotiations on players' contracts and the marketing of statistics for fantasy sports. For that reason, the various players' unions have joined American Needle's side of the argument. New Orleans Saints quarterback Drew Brees even had time to pen a Washington Post piece opposing the league and supporting little American Needle .
Robert Kronenberger, son of the founder of American Needle, says the firm has made up for the lost NFL revenue, but he still wants to overturn the lower court opinion. "For me, it's a principled thing," he told the New York Times. "We just want to be competitive....It's just black and white and this is wrong."