On Aug. 2, the U.S. District Court for the Northern District of California in Dang v. San Francisco Forty Niners denied a motion to dismiss a putative class action against the National Football League, its member clubs, NFL Properties and Reebok. The plaintiff’s suit alleged that the agreement to grant Reebok an exclusive license to manufacture NFL-branded apparel violated state and federal antitrust laws. The exclusive licensing agreement, the plaintiff argued, resulted in anticompetitive overcharges.
In their motion to dismiss, the defendants argued that the proposed markets for NFL apparel and NFL apparel licenses were too narrow because there is no market for NFL apparel separate from the market for sports apparel or apparel in general. The court rejected this argument, holding that the alleged market consisted of all 30 NFL teams’ logos, and all of those teams competed with each other for apparel sales throughout the country. The court also determined that non-NFL apparel such as collegiate, MLB or NBA apparel “would not suffice as a reasonable substitute” for NFL apparel. The court reached this conclusion after noting that NFL team logos “may very well be the products themselves that the consumers seek to purchase.” The court ultimately concluded that the alleged market was adequately pleaded as a relevant market because, among other things, NFL teams compete for fans in regions of the country that do not have geographic representation in the NFL, competition exists for apparel in regions that have more than one team and teams utilize apparel to compete for individuals without a team allegiance and for individuals who move from one region of the country to another.