Summary

The issue yesterday before the US Supreme Court was whether the National Football League should be treated as a "single entity" for antitrust purposes.  The outcome would determine how far a joint venture like the NFL can go in limiting member business practices, e.g., via exclusive dealing arrangements.  Prior to their IPOs, Visa and MasterCard were JVs that set interchange pricing that has been challenged in an antitrust lawsuit.

Analysis

If the NFL prevails, it will strengthen the hands of Visa & MasterCard against their merchants' multi-billion dollar lawsuit.. The latter will argue that they, too, were (and perhaps still are) single entity joint ventures that deserve similar rights to set various prices, limit membership, restrict merchants discrimination, etc. 



If the NFL loses, Visa's and MasterCard's liabilities could increase, depending on the decision the Supreme Court adopts. If it is narrowed to cover only the unique facts related to the NFL and similar sports leagues, it probably won't help either side in the card case. But if it comments in any way (expansively or narrowly) on the limitations on JV pricing, it could prove explosive.



In an editorial two days ago, the NY Times urged the Court to rule against the NFL, in part on the hope that its defeat would open the door for further setbacks against the bankcard industry.



Analyses are solely the work of the authors and have not been edited or endorsed by GLG.