Why Would an NFL’s Antitrust Exemption Matter?

The non-voting congresswoman for the District of Columbia recently introduced a bill that would strip the NFL of its antitrust exemption if it doesn’t cease support of the “Redskins” team name.

antitrust exemptionWhile whether that will happen is up for debate, the importance of this antitrust exemption cannot be understated.

Rep. Eleanor Holmes Norton, D-D.C., introduced the bill in an attempt to force the NFL to push the Washington football team to change its moniker from a name that many people see as racist, according to Reuters. Norton stated that the NFL, as long as it promotes a racist name, should not be granted an antitrust exemption from the law. As proof of the name being a racial slur, she pointed to a federal judge’s decision to uphold the U.S. Patent and Trademark Office’s determination that the moniker “Redskins” is “disparaging to Native Americans,” and as a result, ineligible for federal trademark registration.

While so far, the team’s name remains the same, Norton’s threat to remove the league’s antitrust exemption is very serious, and could have costly repercussions should it come to fruition.

Why are the NFL’s antitrust exemptions so important?

These protections, which essentially allow the NFL as well as the country’s other major sports leagues to act as monopolies, are necessary when it comes to negotiations regarding telecasting of sporting events, and allow the league to rake in substantial revenue it’d be missing out on otherwise. The protection allows the league to negotiate broadcasting rights on behalf of the 32 organizations that operate within it. Without the antitrust exemption, these actions would lead many to categorize the NFL as a monopoly, but with them, it is free to work around federal antitrust regulations to negotiate lucrative deals for the league and the 32 teams.

The exemption itself is called the Sports Broadcasting Act. Specifically, the legislation states that “antitrust laws, as defined in section 1 of the Act of Oct. 15, 1914, as amended (38 Stat. 730) [15 U.S.C. 12], or in the Federal Trade Commission Act, as amended,” should not apply to any agreement by or among people or teams playing or working in the realms of organized football, baseball, basketball or hockey, regarding the rights of any club within the aforementioned sports leagues to sell or transfer the rights of any club for broadcast.

Essentially, the professional leagues for the aforementioned sports can negotiate broadcasting rights on behalf of any or all of the clubs engaging in those sports. This means that football teams do not have to work out their own telecasting deals, and helps the league work out deals that allow it to see billions in revenue from broadcasting each year. To lose the protections afforded by the Sports Broadcasting Act would end up costing the league billions.

Will threats against the federal protections continue?

This isn’t the first time that the NFL’s antitrust protections have been threatened, either. Sen. Richard Blumenthal, D-Conn., introduced a bill last year that would require professional sports leagues to renew their antitrust exemptions every five years, according to the New York Post. The senator’s decision to propose the legislation was rooted in the NFL’s handling of a number of domestic abuse cases, which was widely panned as inappropriate and essentially ignorant of the severity of the issue.

As the league’s actions continue to be the subject of intense scrutiny, its hold on its antitrust exemptions may grow more tenuous. Whether Norton’s bill will make any real progress, or simply end up another symbol of the opposition to the “Redskins” name remains to be seen.

If you have any more questions about antitrust exemptions, contact an attorney with knowledge of sports law and entertainment law, who can explain more.

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Anthony R. Caruso is a business transactional attorney in New York and New Jersey with experience in structuring, negotiation and completion of legal deals involving business, entrepreneurs, athletes and performers.

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