RANDY OZBIRN, NOVEMBER 22, 2020, 4117423

American Football League v. National Football League

Case summary

The American Football League vs National Football League, 205 F. Sup. 60 (D. Md. 1962) was a case brought forward by the American Football League (AFL) and their member teams against the National Football League (NFL) together with some of their member teams accusing them of conspiring, attempting, and monopolizing the countries professional football league. Both the AFL and NFL agreed to conduct the case in two stages, which included listening to the lawsuit brought and determining the violations, such as injuries that the AFL claimed to have been caused by the defendant’s violations. Secondly, the court agreed on the amount of relief the plaintiff was to be entitled to from the defendant as compensation for the damages that were caused (America Football League v. National Football League).

The American Football League was created in 1959 by Lamar Hunt and Bud Adam and later started official operations in 1960, with eighth charter member teams comprising of Dallas Texans owned by Lamar Hunt, the Houston Oilers by Bud Adams, the Los Angeles Chargers by Barron Hilton who was the son of Hilton Hotels founder Conrad Hilton, the Buffalo Bills by Ralph Wilson, the Denver Broncos by Bob Howsam, the Oakland Raiders by Chet Soda, the Boston Patriots by Billy Sullivan, and the New York Titans headed by Harry Wismer, who was also a sports broadcaster (Gruver, 2011).

The National Football League was initially called the American Professional Football Association (APFA), during its inaugural season in 1920 in Canton, Ohio. It was later called the National Football League in 1922, and the pioneer president was Joseph Francis Carr (October 22, 1879 – May 20, 1939), who also played in the league. During the case by the American Football League, the member teams were the Chicago Cardinals headed by Charles Bidwell, the Dallas Cowboys by Clint Murchison, the New York Giants by Mara, the Pittsburgh Steelers by Rooney, the Philadelphia Eagles by Donohue, the Washington Redskins by Marshall, and the Cleveland Browns by Paul Brown all were from the Eastern Division (America Football League v. National Football League). The Western Division had the San Francisco 49er’s by Morabito, the Green Bay Packers by Lombardi, the Baltimore Colts by Rosenbloom, the Detroit Lions by Anderson, the Chicago Bears by Halas, the Minnesota Vikings headed by Boyer and another four partners, and the Los Angeles Rams led by Rozelle (America Football League v. National Football League).

Background of the case

The National Football League was initially the sole member of the major league of professional football, with its members battling in competition before the formation of the American Football Conference. Each member team was located in its city except for Chicago Bears and Chicago Cardinals, who were from the same town. All these teams were located in advanced metropolitans except for the Green Bay Packers.

The teams were owned by individuals or partners who assumed overall management of the organization. The teams usually faced challenges of funds and competency levels of the players, which influenced Burt Bell’s suggestion, one of the owners, to increase the number of franchises in order to tackle the challenges. Some owners were affected by large crowds in their cities, pushing for franchises’ granting to suit owners and also the passing of the Sports Bill. The Sports Bill was aimed at protecting the football organizations and, in particular, the professional football league from antitrust laws. This law created a rift between those who saw developments as a door that would open competition from emerging organizations and others who saw it as a way to promote the game. Many owners with personal interests saw a loss and were unwilling to offer a way for expansion, which would lower their interests and television rights.

An expansion committee was formed, which dealt with the proposed expansion to increase the league to sixteen from twelve. Despite some members being against the demand, most members supported the initiative, and later all members agreed due to the improved financial status boosted by television rights. Dallas and Houston were granted priorities after a proposal to consider Minneapolis and Miami. The two cities were granted a franchise due to the massive stadiums, the presumed local rivalry, and interest in the game from the locals, which would be favorable for the sport to grow. In 1959 Hunt put in his plans to start a new league, and of course he was willing to implement a Dallas franchise. He discussed the prospect with Bell and Halas, who gave him essential insights on conducting a football league. He later announced his plans to the NFL committee and the owners supported the new league (America Football League v. National Football League).

Hunt together with Adams announced the formation of the American Football League in Houston, Texas and later they met with city representatives from Houston, Dallas, Minneapolis, Denver, Los Angeles, Seattle, and New York in Chicago, Illinois for what would be the formation of the league with eight teams (Gruver, 2011).

The new league’s formation saw a competition to acquire a franchise in different cities, and some teams were forced to move from certain cities due to unfavorable competition. The American Football League and the National Football League engaged in a contest that saw some owners leaving the AFL to join the NFL, such as Winter, Skoglund, and Boyer in the battle for a Minneapolis-St. Paul franchise.

The AFL felt the NFL practices were against the law and decided to present their argument to the court, based on the violations against player and television rights, monopoly attempts, and conspiring to monopolize competition in major professional football.

Among the NFL member teams that were not included in the case was Minnesota, which did not participate in the case from the onset, the San Francisco 49er’s and the Los Angeles Rams were also dismissed as a result of jurisdiction and venue according to the court records, 27 FRD 264 (America Football League v. National Football League).

The National Football League and the American Football League formed an unincorporated association with the permanent franchises, which are properties of their member teams that can only be transferred by an agreement or forfeit and must be approved by all of the members of the respective leagues.

The American Football League, which was the plaintiff, argued that the NFL demonstrated, in no small extent, monopoly, attempt monopolies and conspiracy to monopolize all of the areas of competitiveness. In the case of location, the American Football League cited proof that the National Football League and its member teams monopolized the competition, apart from the Washington Redskins. The other members, together with the NFL, conspired, attempted to conspire, and monopolized some of the metropolitan areas. As an example, in the issuance of a franchise to Minneapolis and Dallas, the happenings around granting the two final franchise and the statements and telegram messages surrounding another proposed Houston franchise, proved a total exercise of conspiracy and attempt to monopolize the granting of the two franchises (America Football League v. National Football League).

In their defense, the National Football League and its members argued that a monopoly was not used in the franchise’s granting. They accepted that the franchise was issued to the two teams and the statements made were by an NFL’s expansion policy, long before the American Football league was founded. Moreover, the defendants supported their actions, to help them compete equally with incoming members from the American Football League.

Concerning the second requirement for the teams in the professional football league, the plaintiff could not provide substantial evidence against the defendants that proved the violation of any of the antitrust laws. Therefore, the plaintiff withdrew that allegation (America Football League v. National Football League).

Regarding the sale of TV rights, the plaintiff was convinced that there was enough evidence on the conspiracy to monopolize, attempt to monopolize, and actual monopolize the policies of the league.

Analysis of the case

The court based their analysis on the plaintiff’s ability to show the defendants had proven to have the power to monopolize. The defendants were involved in practices that undermined a competitive environment in a major professional sports league while also demonstrating that the actions were intentionally aimed at that particular outcome. From previous cases such as the United States v. EL De Nemours, 351 US 377, 399, 76 S. 994, 100 L. Ed. 1264, the court cited monopoly as the power that controls and excludes competition. Therefore, the monopoly was characterized by the authority over prices and unreasonable control of the competition (America Football League v. National Football League).

The law that states monopoly as a relative word was applied, meaning that it depends on the nature of the business. Concerning this case, it was a test of whether it was within the power of the National Football League to control the formation and operation of a new league. For the plaintiffs to have proof, they had to show that the ability of the National Football League to exclude any new leagues from any city and was able to prevent the formation of any new leagues. Also, if the National Football League had the power to monopolize and undertook a course which led to exclude competitors and to prevent competition, then proof was not required.

In attempting and/or together with conspiring, the accused does not have the power of monopoly. When used together or separately, these two intend to create a power of monopoly or excluding competition. In these allegations, the plaintiff must show the actual attempt and conspiracy and outline the intentions, which do not include unethical conduct or rough competition strategies.

The plaintiff must show the intention of the defendant to gain control over the competition. Show how they prevented the formation of the new league and how excluding competitors in some cities could further lead to total closure of the new league in all of the other cities that were not affected (America Football League v. National Football League).

The outcome of the case

Monopolization power was not evident in the defendant’s actions since they did not have the financial ability to have teams in every city in order to prevent the American Football League from creating and operating. The National Football League had plans of expanding their league in a phased approach that saw four new teams in two years. The best players that were in the National Football League were from colleges that had quality players. The players were under contracts, which made them available to the American Football League upon termination of those contracts. The National Football League did not prevent the American Football League from signing any able players. The television broadcasting rights were also not violated by the National Football League and the American Football League had available television coverage. Therefore, the plaintiff’s case on monopoly power against the National Football League did not hold any grounds and was dismissed.

Having no monopolization power, the remaining case was an attempt and conspiracy of monopolization. The plaintiff used the granting of the franchise to Dallas and Houston together with the proposal of granting Minneapolis, as the point of the NFL’s intent of monopolization. However, the court was informed this had occurred prior to the formation of the American Football League and aimed at the expansion of the NFL. This showed proof of no attempt of conspiracy for monopolization (America Football League v. National Football League).

Judgment was passed to favour the National Football League due to no proof of the allegations on monopoly and intent of trust. The defendants, the American Football League, was entitled to no relief. The appeal was dismissed, agreeing with the District Court ruling earlier that found the defendant not guilty of the accusations.

I do agree with the outcome of the case. If there was no evidence that the National Football League was attempting to monopolize, then the American Football League should not be entitled to any compensation for damages nor should the National Football League have to change any of the way they are conducting business. I do believe the American Football League did not want any competition so that is why the lawsuit was filed.

Conclusion

According to the plaintiff’s argument and evidence of monopolization, attempt and conspiracy to monopolization, and analyzing the defendant’s actions, it is clear that the court’s decision was correct. None of the actions showed power to monopolize nor the National Football League’s intentions to monopolize the professional football league. Their intentions were all aimed at expanding the league.

References

America Football League v. National Football League, 205 F. Supp. 60(D. Md. 1962) (US District Court for the District of Maryland – 205 F. Supp. 60 (D. Md. 1962) May 21, 1962)

Gruver, E. (2011). The American Football League: A Year-By-Year History, 1960-1969. McFarland.

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