In Patrick Dang v. San Francisco Forty Niners Ltd., the plaintiff has filed a putative class action in the Northern District of California alleging that the exclusive license between the NFL, NFL teams, and sports apparel maker Reebok International Ltd. monopolized the market for team apparel. Although that agreement has expired, the NFL currently has an exclusive arrangement with Nike.
In a 2010 decision, the U.S. Supreme Court held that the NFL’s agreement with Reebok could constitute a horizontal agreement among NFL teams, potentially violating the antitrust laws. That case, filed by American Needle, a competitor of Reebok, is currently on-going.
This case alleges that the exclusive agreement has inflated prices paid by consumers for NFL team apparel. Prior to the current era of exclusive licensing, the plaintiff alleges, the NFL licensed multiple apparel companies that competed to provide a selection of products. The exclusive license, plaintiffs claim, ended that competition to the detriment of consumers. “Absent this exclusive agreement,” the complaint alleges, “rival licensees manufacturing and distributing apparel bearing the intellectual property of any NFL team would have competed against one another, thereby providing consumers like plaintiff and the class members with the benefits of such market competition, including lower prices and increased quality and selection.” For example, the complaint alleges that prices for popular items like caps and jerseys increased by more than 1/3 when the exclusive deal took effect.
2 Comments