NFL Antitrust Case Could Have Game Implications

This week the U.S. Supreme Court is hearing a case involving the National Football League and an exclusive licence it granted. No, it's not the licence awarded to EA Sports' Madden franchise, but the outcome could conceivably affect it.

At issue in American Needle vs. NFL is whether the football league is a single entity for purposes of U.S. antitrust law, or is in fact 32 separate entities acting in collusion on this type of agreement, which would be illegal. For an excellent breakdown of the larger meaning in the case, see this piece by Slate. As it relates to video games, the blog Laws of Play offers a strong analysis, beginning with the position that a setback to the NFL could mean the end to EA's exclusive deal.

If American Needle ultimately prevails (but it appears that the Supreme Court is likely to send this back to the district level to be retried, rather than resolve the matter itself) "EA could lose its current position as the exclusive publisher of NFL-licensed games," Laws of Play speculates. "Furthermore, the ways in which future game licensing agreements are negotiated would be forever changed.

Rather than appealing to a single business or organisation, such as [NFL Properties]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.

Put another way, the publisher of the dominant title could look at its own player data, decide that there's no benefit to having a terrible team like the Lions in this year's version, and choose not to pay Detroit for the use of its likeness.

For whatever my lay opinion is worth, I am inclined to agree that the NFL is a single entity (the finding at trial and on appeal). The league's principal product is the staging of football games. These games are scheduled and officiated at the league level; revenues from their television broadcast - an even larger market - come from contracts negotiated at the league level, and are shared by all teams (unlike baseball, for example.) The licensed apparel of a team not or no longer playing football games is worth considerably less than that of an active franchise.

But the NFL seems to want something beyond a victory on this question. Namely, the exemption from U.S. antitrust law enjoyed by Major League Baseball for nearly 90 years. It's principally why there has been no on-field challenger to the American or National Leagues of baseball since 1915, but postwar competitors such as the AFL, ABA, USFL, WFL, and WHA have been able to contend and - in the greatest consequence of such lack of immunity - force at least a partial merger with the dominant association.

So while a court ruling that emancipates football video games from exclusive licensing seems unlikely, and at least a very long ways down the road, a total victory for America's dominant team sport is also doubtful.

What American Needle v. NFL Could Mean for Gamers [Laws of Play]


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