NFL and Fanatics Licensed Merchandise Antitrust Class Action

National Football League Properties, LLC (NFLP) can bestow valuable licenses on companies that want to sell football-fan merchandise. This class action brings suit against NFLP, the National Football League (NFL), a long list of NFL teams, and one merchandizer, Fanatics, Inc., alleging they have violated antitrust laws in limiting the ability of other companies to compete in selling NFL-licensed products. In particular, the complaint alleges that NFLP and Fanatics have stifled competition by preventing others from selling their goods on Amazon.

Football fans spend billions of dollars each year on NFL merchandise, in stores and online. One of the primary outlets for this is Amazon.com and its third-party online marketplace (TPOM). Through Amazon’s TPOM, small companies can market their goods to a wide audience.

Fanatics is a huge seller of NFL merchandise. The complaint alleges, “Fanatics’ value has more than quadrupled during the past year and a half, and is now estimated to be $27 billion.” According to the complaint, Fanatics has bought up some of its competitors to advance itself.

The NFL appears to be all in favor of Fanatics’ dominance, the complaint alleges, “because it has invested well over $400 million in Fanatics to become a large equity shareholder. As Fanatics’ value grows, so does the value of the NFL’s equity share in Fanatics.” The complaint alleges that it is therefore in the NFL’s interest to help Fanatics dominate the market and push out smaller competitors.

According to the complaint, “just last year, the NFL Teams and Fanatics entered into various agreements that choke that competition off of Amazon’s TPOM and channel business that previously went to those smaller competitors to Fanatics[.]” The complaint alleges that these agreements violate antitrust laws.

The NFL has put in place restrictions, the complaint claims, that forbid competing retailers from selling on Amazon’s TPOM unless the NFL specifically permits them to do so.

Also, the complaint alleges that some licensees have agreements with Fanatics that don’t allow them to sell licensed merchandise to others who sell on Amazon or to certain other online outlets. In fact, the complaint alleges that Fanatics and its “horizontally competing licensees” have entered into agreements that require they all boycott other sports merchandise retailers, such as the plaintiffs in this case.

The agreements, the complaint says, “are designed to allow the NFLP, Fanatics, and the constituent teams to reach downwards to attempt to restrict the conduct of retailers … that horizontally compete with them.” The complaint thus claims to bring this lawsuit “to restore free and fair competition on Amazon’s TPOM.”

The class for this action is all entities or persons in the US, including its territories and the District of Columbia, who are prohibited from selling NFL licensed products through Amazon’s TPOM or directly to Amazon for resale, due to the implementation of the NFLP’s TPOM policy or similar policies, for example, as reflected in the NFLP’s Approved Marketplace Retailer Application, from January 1, 2016 until the unlawful conduct stops.

Article Type: Lawsuit
Topic: Antitrust
Tags: Anticompetitive Actions, Antitrust, Sports