Thursday, May 27, 2010

American Needle

Scramble for the Ball co-author Mike and I co-wrote another column, this one on the Supreme Court's decision Monday in American Needle. As you can see from the comment section, the University of Chicago, and me personally, are responsible for virtually every ill of the past half century. If only I in fact had such power... heck, if only writing for FO was something my employer particularly liked.

That column pretty much took care of everything I planned to write about American Needle here, but there are a couple loose ends and other articles I wanted to note. Guesting for Darren Rovell, Maury Brown wrote about the NFL's guaranteed media deals in 2011 paying them even if there's no football. As is indicated in the "plausible future" section of the column, my view has changed and I now think there will be football in 2011. The question in my mind is now whether it will be all or almost all of the current players, something like 90% with some serving as test cases, or more like half.

At least as far as there will be NFL football in 2011, I seem to be in agreement with Mike Florio, who I think does a good job when he's writing about things he knows. See this piece on the NFLPA's over-the-top rhetoric and also this one on the decertification option. If you want the union line, go ahead and read Lester Munson's article for ESPN; he buys into what they told him hook, line, and sinker.

I believe, though, that Munson gets one thing quite wrong, and that's that the Obama Administration won. When the NFL and American Needle initially filed their cert petitions, the Supreme Court did what it sometimes does and asked the Solicitor General's office whether it thought the Supreme Court should take the case (aka "cvsg", for calling for the views of the Solicitor General). A large percentage of the time (between 75% and 90%, I'd guess, too lazy to look it up), the Supreme Court denies cert if the SG says don't take the case and grants cert if the SG says yes. In this case, the SG said not to take the case, but the Supreme Court granted cert anyway. Perhaps we shouldn't be too surprised by this, since the case ended up being decided unanimously, but the Supreme Court strongly hinted that the NFL should win on its rule of reason analysis under § 1. Given that the 7th Circuit by its own terms expressly limited its ruling, and that sports leagues are weird hybrids of competition and necessary cooperation that can produce rulings with limited general applicability, I don't think denying cert would have had much practical effect. That the case was heard at all was a sort of defeat for the government.

My old antitrust prof, Randy Picker, had a post on the decision up at the UofC Faculty Law Blog. Reading Prof. Picker's post, you can see he's a law prof and I'm a football columnist.

People really liked me in the FO comments for linking to this post by someone better versed in the economics of organizations. My favorite example of an example of the benefits of cooperation is the DVD patent pool. The reason there was no format war over the DVD like there was for VHS v Beta and HD-DVD v BluRay is the manufacturers all got together and came up with a single standard format. This is a clear § 1 violation, and I'd say there's probably a pretty good chance it loses under a rule of reason analysis. But, of course, the government didn't pursue the case and there was no American Needle to be left out of the pool, so it was never litigated.

Chris at Smart Football also wrote about the decision. We had a minor back-and-forth on twitter a couple weekends ago on the breadth of the 7th Circuit's ruling. See also Michael McCann and Marc Edelman of Sports Law Blog, each writing elsewhere. Andrew Brandt wrote about how getting the decision could spur collective bargaining talks, a position I agree with (the chance of getting any meaningful movement before a decision by the NFL was nil) but I still don't see things getting done. NFL attorney Jeff Pash had a presser, it seems, and noted the case wasn't about labor, which is (a) absolutely true and (b) completely meaningless.

Two other points to ponder, about which I am not about to draw conclusions. (1) For virtually all of its history, MLS has signed at least some players at the league level and then assigned them to teams, either via an entry draft or an allocation process. Is this covered by the nonstatutory labor exemption? Is this collectively bargained? What about before there was an MLS players union? (2) During the 2004-05 NHL lockout, Bain Capital offered to buy the NHL, including all 30 teams. The deal ended up not going through, apparently for several reasons, but could such a deal have passed antitrust scrutiny? Should it? And what effect can and should that have on labor relations when the 30 teams are all clearly part of a single entity?

These will probably be pretty much my final thoughts on American Needle, at least unless and until something interesting (to me) happens at the lower court level.

1 comment:

Jon said...

This is a digression, but I have a mini-book review for you: The Catch was disappointing. I was hoping that it would go into more about how San Francisco overtook the Cowboys as an NFC power. The book does touch on that, but it could have gone into more depth.

Sure, they mentioned the West Coast Offense, but the author didn't explain how the rule changes a few years earlier made it feasible. Or how those changes may have spelled the death of Dallas's Flex Defense.

FWIW, two parts of Landry's offense live on: the multiple formations and the shotgun. IIRC, no one else was really using those tools at the time. But I don't think the writer touched on that at all. Xes and Os may scare some folks off, but I'd like to read about them; as long as there are accessible enough for me, a layman, to understand.