Saturday, January 16, 2010

Court Commentary: American Needle v. NFL

So, if senior year of high school I had realized that the arts had no future for me, I know exactly what I would have done. I would have gone into Constitutional Law and worked my ass off to work towards my deepest secret desire: to be a Supreme Court Justice. Seeing as I'm a non-native born liberal Israeli male, the odds of me getting onto the Supreme Court are low to none, but I might have made a Federal judgeship, and I think I'd be okay with that.

Anyways, I follow the Supreme Court closely when I can, and what I love are cases like this one: American Needle v. NFL.

The case, as I can sum it up:
  • The 32 teams of the NFL license the NFL their logos, and the NFL in turn licenses those logos to a single merchandiser, Reebok.
  • Another merchandiser, American Needle, sued the NFL, saying that it was a trust -- a collection of competing entities that had unified to distort the market.
The claim hinges around whether the NFL is a single, unique entity, or whether it is an umbrella organization for 32 entities in the same market. If it is the former, then it is not a trust. If it is the latter, then it is.

Anyways, as the oral arguments have progressed, it has seemed to me to be clear that the NFL is a trust.
  1. The teams existed before the NFL, and came together to form it.
  2. Teams such as the Harlem Globetrotters have proved that teams don't need the league to exist, and thus are not dependent on it.
But really, that's not the part of the case that interested my brain. I was interested in something my mother brought up. You see, my mother is not a sports fan. She kind of dismisses the entire notion of sports. When I told her this story, she waved her hand and said, "Oh, if the NFL is raising prices on Football hats, why not buy hockey hats?"

It made me wonder how you can define a market. Really, the question is "are the two products equivalent?" If, from the consumer's perspective, you can swap one product for another and they can be comparably equivalent, then they are in the same market.

Silly Illustrative Example 1: If I am shopping for a blue baseball cap, and they are out of blue baseball caps, it is not unlikely that I will buy a black baseball cap. This are roughly equivalent options.

Silly Illustrative Example 2: If I am shopping for a car, and they are out of cars, it is unlikely that I will buy a scooter. These are not roughly equivalent options.

But what about something like a sports jersey? Suddenly, people's emotions come into play. If a person wants to support the Bengals because Chad Ochocinco is the greatest person alive today, they will not accept a New York Giants jersey in exchange (by the way, apparently these are equivalent for Justice Breyer, who doesn't appear to give a shit about sports, unlike Justice Blackmun or Justice Sotomayor). There's some sort of emotionally distinguishing value. Football fans are a distinct crowd from hockey fans, and Bengals fans are a distinct crowd from Giants fans. Sometimes it seems like saying there isn't much difference between a Mets fan and a Yankees fan isn't that far from saying there isn't much difference between Arabs and Persians.

I wonder how that concept pays out in the arts.

This morning, when I first thought up this post, I had a brilliant insight on that score, but I was driving and now it's 1:30 AM and I can't remember.

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