NFL Fanatics Successfully Defend Against Antitrust Claims Regarding Gear Sales Restrictions
NFL's Licensing and Distribution Model Upheld in Court
In a significant ruling, a federal judge has dismissed a lawsuit brought by Casey's Distributing, a Nebraska-based company that sells licensed apparel, accessories, toys, and other sports-related novelties. The lawsuit challenged the National Football League's (NFL) policies that restrict the sale of NFL licensed products through Amazon and other third-party online marketplaces.
Judge Carter, presiding over the case, rebuked Casey's contention that the NFL has a "monopoly" over determining which companies get licenses for the manufacture of NFL products. He stated that the NFL's "monopoly" over licensing and distribution, which existed before the current policies, is lawful.
The ruling lends legal support to the NFL's business model for online sales of official products. It is significant because it supports the NFL's efforts to tightly control the licensing and distribution of its products.
Casey's Distributing alleged that in 2021, Amazon told them they can't keep selling NFL licensed products on the platform unless they become an NFL-authorized seller. They also claimed that in 2019, all or nearly all their products were removed from sale on Walmart.com due to Fanatics becoming the exclusive seller of NFL products on that website.
The NFL's licensing arm and its 32 teams, along with sports e-commerce platform Fanatics, have now received a dismissal of the federal lawsuit. This victory should give the NFL more confidence that its approach to licensing and distribution withstands legal scrutiny.
Fanatics, which is on pace for about $12 billion in revenue next year, has recently won a similar lawsuit brought by Casey's in relation to its relationship with Major League Baseball (MLB). The related story suggests that Fanatics' recent court loss in Australia has brought "sound and fury" but little impact on sales.
The judge in the Casey's Distributing lawsuit did not find that consumers pay higher prices as a result of NFLP policies, unless they insist on buying from unauthorized retailers like Casey's. Nike and Fanatics confirmed in court cases the exclusion of unauthorized sellers from distributing NFL licensed products, leading to authorized sellers having exclusive distribution rights and unauthorized sellers being legally barred from selling NFL-branded merchandise.
It's worth noting that the NFL scored a victory in a lawsuit regarding the Sunday Ticket arrangement, but the jury's verdict was set aside due to juror confusion and flawed methodologies. The NFL victory in the Sunday Ticket arrangement case is currently on appeal to the U.S. Court of Appeals for the Ninth Circuit.
The NFL is facing antitrust challenges for both its apparel and collectibles divisions. However, this latest ruling strengthens the NFL's position in its ongoing legal battles. The NFL's tight control over the licensing and distribution of its products remains intact, ensuring the authenticity and quality of its merchandise for fans worldwide.
