Sunday, November 10, 2013

NASL v. NFL case brief

NASL v. NFL case brief summary
670 F.2d 1249 (1982)

Plaintiffs appealed from the judgment of the United States District Court for the Southern District of New York, which dismissed an action brought by plaintiffs as a national soccer league against defendant football league alleging that defendants' ban on cross-ownership between the leagues was a violation of the Sherman Act, 15 U.S.C.S. § 1. Defendants cross-appealed the dismissal of their counterclaim to prohibit cross-ownership.

Plaintiffs North American Soccer League and its members (NASL) sued defendants National Football League and its members (NFL), seeking a permanent injunction and damages for violating the Sherman Act, 15 U.S.C.S. § 1, by adopting a policy prohibiting its members from owning interests in other professional sports leagues, including plaintiff NASL. Plaintiffs' theory was that the rule would have an anticompetitive effect in the market for capital and potential investors in their sport. The lower court dismissed plaintiffs' case on the grounds that the Sherman Act did not apply because the NFL and its members were a single economic entity. Plaintiffs appealed and the court reversed, rejecting the single entity theory and saying that the anticompetitive effects should be judged under standards of antitrust laws.

The court found that there was a sub-market for sports capital and the cross-ownership ban had an anticompetitive purpose and effect in that market. Defendants failed to prove that the proposed ban was the least restrictive way to achieve their purpose. Defendants' counterclaim was held to be meritless.


The court reversed the judgment and directed that a permanent injunction be imposed because, under the rule of reason, the proposed rules against cross-ownership were anticompetitive in purpose and effect, which was not outweighed by any possible pro-competitive effect. The matter was remanded for consideration of plaintiffs' claim for damages and the dismissal of the meritless counterclaim was affirmed.

Suggested Study Aid For Sports Law

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