American Needle Vs Nfl Case Study

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In 2004 American Needle sued the National Football League (NFL). American Needle had been making hats for many of the individual teams until the NFL decided to combine all 32 team license rights into one. The NFL then awarded the rights to make all NFL team hats to the Reebok company in 2001. American Needle sued the league and Reebok in 2004, claiming the deal violated antitrust law. The decision by the NFL to combine all 32 teams advertising rights would change them from an oligopoly market structure to a monopoly market structure. This would then allow the NFL to fix the prices for the license and advertising rights for all 32 teams. Prior to this each team negotiated with vendors to sell their merchandise individually. Therefore, teams with strong branding were able to negotiate better deals than teams in weaker economies. This created teams with higher market power than others. The NFL chose to negotiate for all the teams in order to evenly spread merchandising income to all teams. American Needle first brought the NFL and Reebox to court under the Sherman Antitrust Act in 2007. At this time, the district court granted the NFL entities summary judgment on the basis that the NFL member teams…show more content…
However, they then decided to attempt to gain monopoly rights in order to give more money to team owners at the possible expense of the players. This was a negative example of a monopoly. Not all monopolies are bad for society. For example the government monopoly that governs air travel, the Federal Aviation Administration (FAA). The FAA regulates and oversees all aspects of air travel. By doing so, the Federal Government can ensure that all attempts are being made in order to keep aircraft and passengers as safe as possible. If the FAA did not have a monopoly on this, then there would be a possibility of nonstandard regulations and safety

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