Proponents victorious in antitrust lawsuit against NFL over merchandise limitations
In the world of sports merchandise, the NFL's Online Distribution Policy (ODP) and Fanatics' market dominance have sparked antitrust concerns. Smaller distributors, such as Casey's Distributing, have challenged the NFL's policies, claiming they stifle competition and drive up prices for consumers.
In 2019, Casey's Distributing filed a lawsuit against the NFL, Fanatics, and others, alleging antitrust violations due to the restrictive distribution policies. However, a U.S. District Court judge dismissed the lawsuit without prejudice, citing a lack of adequate evidence to support antitrust injury. The court ruled that while the policies may injure individual competitors like Casey's, they do not harm competition overall, which is what antitrust laws aim to protect.
Fanatics, a sports e-commerce platform, holds a significant position in the market, having acquired numerous competing licensees and a major stake in the NFL-licensed products market. The NFL has invested heavily in Fanatics, further solidifying Fanatics' dominance. This partnership has been criticized for potentially monopolizing the market, though the court did not find sufficient grounds to support these claims as an antitrust violation.
The dismissal of the lawsuit highlights that while the NFL's policies may disadvantage smaller competitors, they do not necessarily violate antitrust laws. This outcome supports the NFL's and Fanatics' control over the distribution of licensed products, allowing them to maintain their market position. However, Casey's Distributing may choose to file an amended complaint to continue their challenge, potentially leading to further legal scrutiny of the NFL's policies.
The case of Casey's Distributing is not isolated. In 2019, all or nearly all of Casey's products were removed from sale on Walmart.com due to Fanatics becoming the exclusive seller of NFL products on that website. Similarly, Fanatics also secured a victory in a similar lawsuit brought by Casey's against MLB.
Michael Rubin's company, which is on pace for about $12 billion in revenue next year, has expanded rapidly into new business avenues and is facing antitrust challenges for both its apparel and its collectibles divisions. The rapid growth of companies like Rubin's and the dominance of Fanatics highlight the competitive landscape in the sports merchandise industry.
Despite the antitrust challenges, the NFL tries to tightly control the licensing and distribution of its products. In 2021, Amazon allegedly told Casey's it can't continue selling NFL licensed products on the platform unless it becomes an NFL-authorized seller. This move further underscores the NFL's efforts to control the distribution of its products.
The ruling lends legal support for the NFL's business model for online sales of official products. The judge's reasoning was based on the premise that antitrust laws protect competition, not competitors, and that Casey's has not established that consumers pay higher prices as a result of NFL policies.
The dismissal of the Casey's Distributing lawsuit is a significant development in the ongoing debate about the NFL's licensing policies and Fanatics' role in the sports merchandise market. As smaller distributors continue to challenge these policies, the future of competition in this industry remains uncertain.
- The dismissal of Casey's Distributing lawsuit, despite antitrust concerns, supports the NFL's and Fanatics' control over the distribution of licensed products, allowing them to maintain their market position in the sports commerce industry.
- The NFL's Online Distribution Policy (ODP) and Fanatics' market dominance in the sports merchandise industry have led to antitrust challenges, with smaller distributors such as Casey's Distributing claiming the policies stifle competition and drive up prices for consumers.
- The competitive landscape in the sports merchandise industry is highlighted by the expansion of companies like Michael Rubin's, which faces antitrust challenges for both its apparel and collectibles divisions, and the dominance of Fanatics.
- In an effort to tightly control the licensing and distribution of its products, the NFL allegedly told Casey's it can't continue selling NFL licensed products on Amazon unless it becomes an NFL-authorized seller, further underscoring the NFL's efforts to control the distribution of its products.
