When Nike secured exclusive NFL-wide rights for all on-field apparel starting in 2012, we were bullish on the deal. Matching the most beloved sportswear brand with the country’s most popular sport would pay dividends for both parties.But that deal is not yet etched in stone, the Sports Agent Blog points out.
Back in May, the Supreme Court ruled unanimously against the NFL in American Needle v. NFL. The Court ruled that the NFL acts as a monopoly when it negotiates licensing agreements for the league as a whole.
While NFL franchises share revenues, Justice John Paul Stevens said the franchises “compete in the market for intellectual property,” and therefore have competing trademarks. These trademarks are valuable to a firm making team-branded hats, like American Needle.
The NFL is appealing the ruling, and some guess the NFL will settle out of court and uphold the Nike contract. However, should the matter stay in court, it could have far-reaching implications beyond just the logo on NFL-sanctioned caps.
A league victory in this case establishes a legal precedent for the NFL as a single entity. It allows NFL owners to collude and set a ceiling on player salaries, practically returning to the pre-free agency era. Saints QB Drew Brees wrote an editorial in the Washington Post that details the negative impact an NFL victory would have on its athletes.
In turn, any court ruling that impacts the NFL’s single entity status has similar affects other leagues – such as the NBA, NHL, MLB – that operate under the separately-owned franchise model.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.