North American Soccer League Orange County Pro Soccer v. National Football League

The North American Soccer League (NASL) and certain of its member soccer teams (collectively referred to herein as ""the NASL"") appeal from a judgment of the Southern District of New York, Charles S. Haight, Jr., Judge, dissolving a preliminary injunction and dismissing a complaint seeking a permanent injunction and treble damages for alleged violations of § 1 of the Sherman Act, 15 U.S.C. § 1, by the defendants, the National Football League (""NFL"") and certain of its member football clubs (collectively referred to herein as ""the NFL""). The NFL cross appeals from the dismissal of its counterclaim, which sought an injunction barring owners of NASL member teams from cross-ownership of NFL teams. Because the conduct complained of by the NASL-an NFL ban on cross-ownership by NFL members of other major professional sports league teams (the ""cross-ownership ban"")-violates the rule of reason under § 1 of the Sherman Act, we reverse. We affirm the dismissal of the NFL's counterclaim. The central question in this case is whether an agreement between members of one league of professional sports teams (NFL) to prohibit its members from making or retaining any capital investment in any member of another league of professional sports teams (in this case NASL) violates the antitrust laws. The answer requires an analysis of the facts and application of governing antitrust principles. Most of the facts are not in dispute. The NFL is an unincorporated joint venture consisting of 28 individually owned separate professional football teams, each operated through a distinct corporation or partnership, which is engaged in the business of providing public entertainment in the form of competitive football games between its member teams. It is the only major league professional football association in the United States. Upon becoming a member of the NFL a team owner receives a non-assignable franchise giving him the exclusive right to operate an NFL professional football team in a designated home city and ""home territory,"" and to play football games in that territory against other NFL members according to a schedule and terms arranged by the NFL.1 See NFL Constitution and By-laws, §§ 3.4, 4.1, 4.2.