WASHINGTON -- The Supreme Court agreed Monday to decide whether the National Football League and its 32 teams can enter an exclusive licensing deal with a maker of team jerseys and other gear without violating federal antitrust law.
The court said it will hear an appeal from American Needle Inc., of Buffalo Grove, Ill., that challenges an agreement the NFL struck with Reebok International Ltd. American Needle had been one of many firms that manufactured NFL headgear until the league granted an exclusive contract to Reebok in 2001.
The NFL won the case in the federal appeals court in Chicago. But it also asked the Supreme Court to hear the case in a quest for a more sweeping decision that could put an end to what the league considers costly, frivolous antitrust lawsuits.
The case concerns whether the league is essentially a "single entity" that can act collectively or 32 distinct businesses that must be careful about running afoul of antitrust laws by working too closely together.
In a statement, NFL spokesman Greg Aiello said the league looked forward to explaining why the court should extend, on a national basis, favorable appeals court rulings on how antitrust laws apply "to the unique structure of a sports league."
American Needle did not immediately respond to a request for comment.
Other than Major League Baseball, which has an antitrust exemption dating to 1922, the other sports leagues have an intense interest in the case. The National Basketball Association and the National Hockey League both asked the court to rule in favor of the NFL.
"We look forward to the Supreme Court finally resolving what has become an oft-litigated, contentious issue in litigation involving professional sports leagues," said NHL Deputy Commissioner Bill Daly in a statement. "We are hopeful that that resolution will ultimately result in less litigation and will allow professional sports leagues to operate in a less costly and more efficient manner."
Reebok was acquired by Adidas AG in 2006 in a $3.8 billion deal that helped the German company expand in the United States.
The case will be argued late this year or early in 2010.
The case is American Needle v. National Football League, 08-661.
Copyright 2009 by The Associated Press