NFL Fanatics Successfully Dodge Antitrust Litigation Concerning Merchandise Regulations
In a significant ruling, the NFL's licensing and distribution model for its official products has been declared lawful, as a federal lawsuit brought by Casey's Distributing was dismissed. The Nebraska-based distributor of licensed NFL apparel, accessories, toys, and novelties had sued NFL Properties, Fanatics, and other defendants in the Southern District of New York.
The ruling, made by Judge Jimmy Carter, lends legal support for the NFL's business model for online sales of official products. Judge Carter rebuked Casey's contention that the NFL has a monopoly over determining which companies get and don't get a license for the manufacture of NFL products.
The judge's decision comes at a time when Fanatics, the exclusive seller of NFL products on Walmart.com since 2019, is facing antitrust challenges for both its apparel and collectibles divisions. In 2021, Amazon allegedly told Casey's it can't sell NFL licensed products on the platform unless it becomes an NFL-authorized seller, following a similar pattern.
Despite these antitrust concerns, Judge Carter reasoned that antitrust law protects competition, not competitors. The judge did not find that consumers pay higher prices as a result of NFLP policies, unless they insist on buying from unauthorized retailers like Casey's.
The ruling is significant because it supports the NFL's efforts to tightly control the licensing and distribution of its products. The NFL's victory in Casey's Distribution v. NFL et al. should give the NFL more confidence that its approach to licensing and distribution withstands legal scrutiny.
As for Fanatics, the sports e-commerce platform is on pace for about $12 billion in revenue next year, demonstrating the success of its exclusive partnerships with major sports leagues like the NFL. However, it remains to be seen how the ongoing antitrust challenges will impact Fanatics' business model in the long run.
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