The National Football League has been careful to keep narrow the aim of its current effort to obtain a finding that, for the purposes of selling hats and shirts, the 32 teams are a “single entity” that cannot conspire with each other in dealing only with Reebok and shutting out companies like American Needle. However, the transcript of Wednesday’s oral argument before the Supreme Court suggests that, if push comes to shove, chief NFL outside counsel Gregg Levy (a finalist for the position of Commissioner in 2006) believes that the league is a single entity, for all of its relevant business purposes.
The key moment in the exchange between Levy and the Court comes at page 47 of the transcript, when Justice Sonia Sotomayor poses this question: “What decision could the sports teams make that would be subject to the antitrust scrutiny under your definition of the permissible range of the joint venture activities? It seems to me that if the venture wanted to make sure all the teams hired secretaries at the same $1,000-a-year salary, that under your theory, that’s okay, because it’s a joint venture.”
In response, Levy didn’t say, “We are taking that position only as to matters relating to the promotion of the league,” which is what he basically said in the NFL’s written brief. Instead, Levy said, “Your Honor, my view is that the — the NFL clubs are not separate sources of independent power. As a result, they are a unit. They are a single entity and it’s –“
At that point, Justice Sotomayor cut him off.
“So to the answer to my question is, there is — you are seeking through this ruling what you haven’t gotten from Congress: An absolute bar to the antitrust claim.”
Though Levy claimed that the NFL isn’t seeking such a ruling, his original answer to the question, which was made in extemporaneous fashion without the luxury of carefully splitting words in written form, indicates that, yes, the league believes it’s a single entity for all purposes.
Thus, it’s reasonable for the NFLPA, based on Levy’s moment of abject candor, to fear that a victory by the NFL in the American Needle case would result in an effort by the league to bootstrap the ruling into an eventual finding that the NFL is a “single entity” for the purposes of determining the rules of player acquisition, which as a practical matter would remove from the union’s arsenal the ability to decertify and sue the league for violating federal antitrust laws.
Later in the argument, Levy offered further insight into the NFL’s actual position on matters of this nature. Applying Levy’s apparent reasoning, Justice Antonin Scalia asked whether the league could determine the price at which a franchise would be sold, by concerted agreement.
Said Levy: “Could they agree on prices for their franchises to be sold? Yes, I assume they could agree because they are not independent sources of economic power.”
Justice Scalia responded by saying, “I thought I was reducing it to the absurd.” (It’s the legal equivalent of “boom . . . roasted.”)
Though we highly doubt (especially in the wake of Wednesday’s arguments) that the Supreme Court would ever agree with the league’s position as it relates to rules regarding player salaries and free agency, we finally understand why the union had been sounding the alarm.
Based on Levy’s comments to the Court, the end game is obvious. Levy, and thus the league, would like to ultimately obtain a ruling that the 32 member teams are completely immune from antitrust laws relating to price fixing and other business activities that are contrary to the concept of fair and open competition, even when the topic relates to the procedures for acquiring and keeping players.