Copyright (c) 2004 Sports Lawyers Journal
Sports Lawyers Journal
ARTICLE: NFL vs. Sherman Act: How the NFL's Ban on Public Ownership Violates Federal Antitrust Laws
11 Sports Law. J. 121
Genevieve F.E. Birren*
In 1991 William H. Sullivan sued the National Football League (NFL), accusing the NFL of violating federal antitrust laws. 1 Sullivan, the owner of the New England Patriots, wanted to sell forty-nine percent of his team to the public in the form of stock. 2 The stock sale never happened and Sullivan sold his team. 3 Sullivan claimed that the NFL rule against public ownership was an antitrust violation. 4
In the NFL Constitution, there are several rules that result in the ban on public ownership of teams. Rule 3.2(a) prohibits nonprofit corporations from owning a team. 5 This rule includes a "grandfather clause," which allows the Green Bay Packers to operate as a public corporation and still be a member of the NFL. At the time the old NFL and the American Football League (AFL) merged, the Patriots, a member of the AFL, were also publicly owned. 6 The Patriots were also grandfathered into the newly merged NFL. 7 However, in 1976 Sullivan bought all the public shares and became the sole owner of the Patriots. 8 This acquisition of all public stock apparently eliminated the Patriots' right to public ownership under the grandfather clause, at least in Sullivan's mind. In 1987, when the Patriots were in financial trouble and Sullivan wanted to sell public ownership interests again, he sought NFL approval for the sale. 9 The Green Bay Packers, on the other hand, neither needed, nor sought, league approval ...
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