NFL’s Jeff Pash on American Needle: “This case was never about labor”

NFL Executive Vice President of Labor/League Counsel Jeff Pash spoke with media following Monday’s American Needle ruling. 

Asked how the decision impacts labor and the collective bargaining talks, Pash said:  “This case was never about labor. We never ever, ever argued that this had to do with labor. We argued to the court that it didn’t have anything to do with labor, and I think the court’s opinion doesn’t address labor – not in any way shape or form.”

“We have a collective bargaining relationship. It is an active relationship. We’re going to continue to operate in a way that is consistent with the labor laws. We’re going to continue to press for a resolution through the collective bargaining process, and I don’t think the antitrust laws are going to apply at all. And this case, today’s decision, doesn’t change that at all.”

“We’re as interested in getting a collective bargaining agreement with the union as we were 24 hours ago. And if the decision had come down 9-0 in our favor, we would be every bit as interested in getting back to bargaining as we are today.”

Below is the complete transcript.

Transcript of Jeff Pash’s comments on the May 24, 2010 Supreme Court ruling in the American Needle Case:

“The court of appeals had held that the league – for purposes of licensing intellectual property – acted as a single enterprise, and, therefore, threw out the antitrust claim (filed by American Needle). The court today overturned that ruling and said that we were not uniformly, as a matter of law, in the area of licensing intellectual property, a single entity and, therefore, they sent the case back to the trial court in Chicago. So we’re sort of back at square one. We remain very confident about the ultimate outcome of this litigation. I have the highest degree of confidence that when it is eventually decided it will be decided in our favor because I am quite confident that what we did will be found in the way we made our deals – not just with American Needle and Reebok, but dozens and dozens of other businesses – is legal, is pro-consumer, is pro-competitive, and will satisfy any standard of reasonableness that the trial court may wish to apply. That’s all this case meant. This case was never about collective bargaining, it was never about labor, it was never about imposing a salary cap on coaches, it was never about a hundred other things that got imported into it over the course of the past couple of years. The only issue that it was about had to do with licensing intellectual property and the court held that we don’t operate as a single entity for that purpose, but it didn’t say anything about a dozen other things because none of those things were at issue in this case.”

So that’s why you’re so confident that eventually you’ll have a positive outcome?

“On the issue of whether we can do can deal with Reebok as opposed to American Needle, I don’t have the slightest doubt how that’s going to come out. I don’t have the slightest doubt about it. I’m as confident of that outcome as can be.” 

Why? It was a 9-0 ruling today.

“But it was a 9-0 ruling simply on the question of whether a lawsuit could even be maintained. They didn’t address any legal issues about the extent to which there’s competition in the business-for-license merchandise. They didn’t address any issue of whether the NFL acted in an unreasonable way in giving a license to one company versus another company. That is the most customary way of doing business that exists out there. It is well established. It has been in place for decades and decades, not just in sports but many, many other contexts. That’s why I’m very confident as to how that part of the case will come out when it’s finally litigated.”

Do you have a timetable on where things go from here?

“It could take a good little while. We’re going to go back to the trial judge and we’ll have to establish a discovery schedule. We’ll have to answer the substantive issues in the complaint. This case was sort of thrown out at square one on the single-enterprise issue, so we’re now back to sort of start over again.” 

What’s the practical impact?

“Really what it means is that the rulings that we had gotten in other cases are sort of uniformly applicable. The Seventh Circuit Court in Chicago was the first court that had held that the NFL had acted as a single enterprise, so that ruling’s been set aside. So as a practical matter, it means that we have to be prepared to litigate these kinds of claims the way we’ve litigated them for 25 or 30 years, where you litigate them, you demonstrate the reasonableness of your rules, the pro-competitive and pro-consumer nature of your actions, and over the past 25 years – it’s not an uninterrupted string of victories – but we have a pretty good track record in these cases. So it just means that it’s going to take longer, it’s going to cost more money and some expert economists are going to make a little money off us by having to testify in this case.”

What does it mean to the collective bargaining agreement talks?

“It doesn’t mean anything (about the CBA talks). This case was never about labor. We never ever, ever argued that this had to do with labor. We argued to the court that it didn’t have anything to do with labor, and I think the court’s opinion doesn’t address labor – not in any way shape or form. The last comment on labor issues (involving the NFL) from the Supreme Court is the ‘Brown vs. Pro Football’ case, where the court spoke about the labor exemption and how the antitrust laws operate in the context of a collective bargaining relationship. And that’s exactly where we are today. We have a collective bargaining relationship. It is an active relationship. We’re going to continue to operate in a way that is consistent with the labor laws. We’re going to continue to press for a resolution through the collective bargaining process, and I don’t think the antitrust laws are going to apply at all. And this case, today’s decision, doesn’t change that at all.”

Doesn’t it take away an option for the league in the realm of the whole labor situation because you had a favorable ruling, the union would not have been able to decertify?

“It’s not at all clear to me that the union can decertify and it’s not at all clear to me that a decertification results in any sort of antitrust claim.”

What has changed since the last time they decertified?

“Quite a few things, starting with 20 years of almost uninterrupted collective bargaining. So a lot of things could be different depending on how the issues are presented, but I don’t think today’s decision has any effect on decertification or not, or what decertification, if it were affected, would ultimately mean.”

Could this create a deal like the Giants could go out and now be outfitted by Nike and the Jets by Under Armour? Can teams go out and strike deals now for stuff that was exclusive to one manufacturer before this?

“Teams have always been able to make deals. Every team has its own local sponsors and its own local advertisers. On something like this, where there’s a clear interest in uniformity with respect to the quality – we’re talking about outfitting the players – you don’t want to have some people having second-rate merchandise and some people having first-rate merchandise. You’re promoting not just an individual team but a league-wide product as a whole; this is what appears on the field every Sunday. No, I think that our legal rights are exactly what they were 24 hours ago, and this doesn’t change our ability to enter into those deals at all.”

What about the consumers?

“I think it’s a plus for consumers. I think having the kinds of product that has been quality controlled, that is being marketed in an effective way, that’s being promoted for consumers. I think it’s generated great value for consumers, and it operates in a highly, highly competitive marketplace, which is another reason I say I’m confident that when this case is ultimately resolved, it will uphold our current practices.”

Explain to the layman the highly competitive marketplace.

“Well, when people go out to buy licensed apparel, it’s not as though the only thing out there is a piece of apparel licensed by the National Football League. There’s apparel licensed by other sports leagues, by colleges, by Tommy Hilfiger, by Ralph Lauren, by a dozen others. I think any economist who sits and looks at it is going to find that there is that kind of competitiveness and that the market for branded apparel is very, very broad.”

Does this mean that Jerry Jones is going to be able to go out and make his own ball cap and generate even more revenue for himself?

“I think Jerry Jones is very supportive of the current arrangement we have. He recognizes that it promotes the league as a whole, of which the Cowboys are an important member, and that it has generated a lot of high-quality, innovative new products. It gives manufacturers an incentive to invest in developing new product. There have been a lot of new manufacturers coming into the business. Someone mentioned Under Armour; that’s a relatively recent entrant. Reebok came in, Nike may come back in. And we’ll have to see what’s going to happen. But it’s a very competitive, energetic market right now.”

What if you had an owner that decided he wanted to strike out and create his own TV network or something like that? Does this prevent you from stopping that now?

“Does this decision prevent us from stopping something like that? No. The fact that, with respect to licensing intellectual property rights, we are not automatically deemed a single entity for all purposes does not mean that we don’t have the same kinds of rights as any business to manage how we promote ourselves, how we market ourselves, how the product gets produced. And, in fact, the court’s decision says at several points that there are unique aspects of sports leagues that justify rules that might not be permissible in ordinary business context, including the need to preserve competitive balance, which is a fundamental point – to preserve the competitive equality of the teams, the ability to compete on the field. You would not want to have a half-dozen super teams for exactly that reason. And the court recognizes that.”

Use of the NFL shield, use of the NFL name, do all of those rules still apply?

“Absolutely. Those are collective assets. They belong to the 32 teams a whole, not to any one club.”

Why do you think that the union and other unions are saying that this was a big decision and pro labor?

“Well, I think because they opposed us in the Supreme Court. So when the court came out the way it did today, they view it as a victory. And let’s face it: Given some of the current issues that we’re going back and forth with the union, it’s understandable that they would portray it as a victory.”

The NFLPA believes it will incentivize you to get back to the table and talk. Is that true?

“This decision doesn’t have anything to do with our interest in getting back to the table and talking. We’re as interested in getting a collective bargaining agreement with the union as we were 24 hours ago. And if the decision had come down 9-0 in our favor, we would be every bit as interested in getting back to bargaining as we are today.”

Will you schedule something soon?

“We have things scheduled.”

Can you tell us exactly what time and where and when?  

“No. But I can tell you that we do have discussions scheduled and we talk with them all the time about all kinds of things.”

In general, is in near future? 

“Near future. Sure. Absolutely.”

Had this ruled in your favor as one entity, how solid could it have been for implementing salaries for coaches or players?

“This was a decision that we always argued was in the context of licensing intellectual property rights. We weren’t up in the Supreme Court saying, ‘Rule in our favor so we can impose a salary cap on coaches.’ Actually, if we wanted to impose a salary cap on coaches, the way to do it would be to have the coaches go ahead and unionize and then you can bargain over a salary cap. But we were never up there saying, ‘Rule in our favor so that we can unilaterally impose salary caps on coaches, so that we can unilaterally do things to players.’ That was never what we were up there talking about. And we were as clear as could be that that was not what the case was about, and I think that the court accepted that.”

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