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Legal Commentary

: LawPundit

The NFL, the Green Bay Packers and Publicly Owned Professional Sports Teams : Legality of Restraints in Trade on the Free Marketability of Businesses in Sports

By Andis Kaulins

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The NFL is a sports franchise league consisting of 32 independent businesses, as clearly declared in last year's unanimous 9-0 U.S. Supreme Court decision in American Needle, Inc. v. N.F.L., No. 08-661, slip. op. at 1, 12, 560 U. S. ____ (2010). With one exception, all of the franchises are owned by wealthy private individuals or families. Not so the Green Bay Packers.

We have been Steeler fans for many years but if the Green Bay Packers should happen to win the upcoming Super Bowl, they would, in a sense, be the "people's" champion in the legal sense.

Patrick Hruby has a thought-provoking article at ESPN.com on the unusual status of the publicly owned Green Bay Packers in professional football at
Super Bowl: The publicly owned Green Bay Packers could be the model for a better way to organize and administer professional sports. - ESPN

It is of course a nice idea that has little chance of success, given the fact that the NFL has since adopted a rule prohibiting further publicly-owned franchises. As Hruby writes:

"If the Packers model seems too good to be true, that's because it is: In 1960, the league wrote a rule into its own constitution prohibiting additional nonprofit, publicly owned teams."

Should that really be legal? What about it, sports lawyers. Can (or should) franchising business operations be able to explicitly forbid nonprofit, public ownership of franchises, especially in the NFL, where they already have one such franchise to begin with?

Recall that "free marketability" of goods and services is the foundation of the capitalist system and that "restraints in trade" constitute exactly what they are called, restraints on that "free marketability". What "rule of reason" is there in a franchise system such as the NFL to prohibit public ownership, especially given the clear evidence that it works -- i.e. the example of the Green Bay Packers -- without harm to the remaining privately owned franchises? What rule of reason permits this restriction on marketability?

Full post as published by LawPundit on February 01, 2011 (boomark / email).