Commentary

NFL antitrust case: cold and compelling

The way the league's lawyers put it, their American Needle fantasy might come true

Originally Published: November 19, 2009
By Lester Munson | ESPN.com

In a brilliant, 66-page brief filed this week in the U.S. Supreme Court, NFL owners and their lawyers describe a form of fantasy football that easily could become a nightmare for the league's players and coaches.

The owners' legal fantasy is to become what is known in American antitrust law as a "single entity." If the owners succeed in their highly unusual maneuver in the nation's highest court, they would be able to install salary caps and wage scales for coaches and eliminate the players' union leverage that has produced free agency, increasing salaries, big bonuses and numerous other benefits. Profits and values of teams would increase exponentially, and owners could name their yachts and racehorses "Single Entity."

[+] EnlargeU.S. Supreme Court
Mark Wilson/Getty ImagesOral arguments before the nine justices of the high court are scheduled for the morning of Jan. 13.
I have written about the case known as American Needle Inc. v. NFL several times (including here, here and here), and how the single entity idea central to the league's contention would be a radical transformation of the laws governing the sports industry. But the brief filed this week has added an unexpected touch in that Gregg Levy, the lead attorney for the owners, and the firm of Covington & Burling present the NFL's side in masterly language that is so benign and harmless that even a coldly analytical legal scholar is drawn to it and tempted to support it.

In a single sentence on Page 14 of their argument in the brief, the owners describe their idea of their league and its role in the economy: "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 and it competes as a unit against other entertainment producers."

Instead of 32 teams competing for coaches, players, sponsors and fans, the NFL is, in the owners' dream world, a single producer of a "product" that competes with television, movies and concerts.

If the justices buy into the owners' fantasy, the court's decision would eliminate all antitrust attacks on the NFL. It is something the owners have sought for decades and have argued repeatedly in American courts, at least since the players' union, under the leadership of the late Gene Upshaw, decertified and began to win antitrust cases in the late 1980s. Those earlier cases secured the free agency, salary structure and other benefits the players currently enjoy.

It is no accident that the legal brief mentions the phrase "sports league" numerous times but never mentions players or coaches. If the NFL prevails, the new rule of law would affect the NBA, NHL and MLB as well. The unions in all three sports have intervened in the high court's consideration to argue strenuously against the NFL's idea.

Instead of describing the competition among NFL teams for hot coaches and coordinators and free-agent players, the league's attorneys focus their arguments on the owners' "collective decisions."

Explaining to the nine justices of the high court that NFL owners share equally in "80 percent" of all revenues, the brief emphasizes the "collective decisions that define NFL football."

The league determines, the brief asserts, when its product (NFL games) will be produced, where they will be produced, who will produce them, how they will be produced (rules of play) and how they will be promoted.

Seeking to convince the judges that the league is a single business entity, the NFL's lawyers assert that the league "controls the overall conduct and business decisions of its member clubs." The owners, according to the legal theory, are not independent. They are, instead, interdependent. No mention is made of Al Davis or Jerry Jones. Nor is any mention made of supposedly interdependent owners who unilaterally decide to move a team from, say, Baltimore to Indianapolis or from Los Angeles to St. Louis or from Cleveland to Baltimore.

Typical of the lawyers' scholarly and analytical approach to potentially momentous legal issues is their use of the word "typology" to describe a system of intellectual classification that would allow the justices to determine whether the league is a single economic unit or a group of 32 enterprises. They suggest that there is "no reason why a league cannot be treated as a single firm [the owners' dream] in a typology that allocates an organization … to the 'unilateral' [single entity] side … or the 'concerted' side [the coaches and players]."

In a profession prone to pedantry, the use of the word "typology" reaches a new level. This column is all but certainly the first time the word has been used at ESPN, and it will (we hope) be the last.

The league's lawyers rely heavily on the antitrust ideas that were formulated and advanced by Robert Bork, a law professor and judge whose seminal book, "The Antitrust Paradox," argued that consumers often benefit from corporate mergers and from what appeared to be cartels.

The book, which is required reading for anyone interested in the legal and economic issues of American antitrust law, includes a description of cooperation among businesses to produce a single product, something that should be immune to antitrust liability.

"Perhaps the leading example is sports leagues," Bork suggested in the first edition of the book in 1978.

Former President Ronald Reagan nominated Bork for the U.S. Supreme Court in 1987, but the Senate rejected him in a series of tumultuous and contentious hearings that resulted from the late Sen. Ted Kennedy's attack on Bork in a speech on the Senate floor made only 45 minutes after Reagan announced the nomination.

The late Chief Justice William Rehnquist subscribed to Bork's concepts on sports leagues and used them in an opinion in an NFL case that reached the Supreme Court in 1982. But Rehnquist's commitment to Bork and the NFL came in a dissent. A majority of justices back then rejected the idea the NFL is now offering to a different Supreme Court.

Can the NFL achieve its fantasy of immunity from antitrust liability?

Sports law professors throughout the nation are arguing about it.

Leaders of players' unions are worried about it.

Agents for players and coaches are concerned about it.

And, of course, the owners are dreaming of it. It would be easy to dismiss the NFL's maneuver as nothing but a fantasy, one more in a long series of failed attempts to change the law and use the single entity idea to grab powers that owners should never have. But this is a serious attempt to change the entire landscape of sports.

The NFL's lawyers know what they are doing and should not be underestimated. They have looked hard at the nine justices now on the court, and they have concluded that this is the time to go for the big victory. This is a game of fantasy football that the owners could win.

The next step in the process will be oral arguments before the nine justices of the high court now scheduled for the morning of Wednesday, Jan. 13. A decision is expected by the end of June.

Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.