News January 04, 2024
Lawsuit Claims Fanatics, Pro Football Teams Conspired To Dominate Online NFL Licensed Merch Market
The proposed class action case is similar to a previous suit that a judge sent to private arbitration.
Blue 42, it’s time to sue – again.
The retailer Fanatics, the National Football League and all 32 NFL teams once more stand accused of conspiring to dominate the retail market for online sales of NFL-licensed branded merchandise, an alleged anti-competitive practice that freezes out fair-market competition and results in higher prices for consumers.
The accusations stem from a lawsuit filed in late December in the U.S. District Court for the Southern District of New York by the law firm Burns Charest on behalf of Illinois resident Charles Franz, a consumer who bought NFL gear from Fanatics.
Burns Charest previously brought allegations of collusion in a similar case with a different plaintiff against Fanatics, the NFL and its teams. A judge sent that suit to arbitration.
The law firm is aiming for a different result this time around.
It wants a judge to declare the actions of Fanatics, the NFL and its teams to be illegal/conspiratorial, and to enjoin the accused from engaging in the alleged collusive activity.
The suit also seeks class action status and wants a judge to award financial damages to Franz and others that bought NFL merchandise from Fanatics.
“The conspiracy as a whole, and each individual part, have allowed defendants to charge supracompetitive prices for NFL licensed products and share the monopoly profits among themselves,” the lawsuit states. The behavior “is likely to cause continued imminent harm to competition in the online market for NFL licensed products.”
In particular, the suit charges that the defendants worked together illicitly to boycott competing retailers who sold NFL licensed merch through third-party online marketplaces. Having unfairly reduced competition in this manner, the defendants then entered into exclusive dealing arrangements that denied remaining competitor retailers access to manufacturers and suppliers, according to the court filing.
Allegedly, the league, its teams and Fanatics entered into anticompetitive licensing agreements to consolidate their operations and end competition, while also forbidding other retailers from using NFL-related keywords to advertise or describe product offerings on the web, the suit asserts.
A spokesperson for Fanatics told Forbes the suit has no merit – that it’s “nothing more than a copy-and-paste job” and a “blatant effort by the same lawyers – after having shopped around for a new plaintiff – to try for a second bite at the apple. We intend to vigorously defend against this action and are confident in achieving the same result.”
According to Forbes, Fanatics founder and CEO Michael Rubin is the 167th richest person in the world. His estimated net worth is $11.5 billion. Fanatics is valued at about $31 billion. The suit says that the NFL’s 32 teams collectively made $18.6 billion through sales of merch, media deals, concessions and ticket sales in 2022 alone.