## Facts

- The NFL adopted and enforced a “cross-ownership ban” prohibiting NFL owners from obtaining a controlling interest in another major professional sports team.
- The North American Soccer League (NASL) and multiple member franchises alleged the rule foreclosed them from a substantial share of available investment capital and experienced sports ownership.
- NASL sued under § 1 of the Sherman Act seeking injunctive relief and damages; the NFL counterclaimed seeking to bar certain cross-ownership arrangements involving NASL interests.
- The district court treated the NFL largely as a single economic entity incapable of conspiring with itself, dissolved a preliminary injunction, and dismissed NASL’s § 1 claim without reaching a full Rule of Reason analysis.
- The district court dismissed the NFL’s counterclaim as well.

## Issues

1. Whether an NFL rule adopted by member clubs constitutes concerted action (“agreement” or “conspiracy”) among separate economic actors for purposes of Sherman Act § 1.
2. Whether the cross-ownership ban unreasonably restrains trade under the Rule of Reason in the relevant market for investment in major professional sports teams.
3. Whether NASL was entitled to injunctive relief, and whether dismissal of the NFL’s counterclaim was proper.

## Decision

- The Second Circuit reversed the dismissal of NASL’s complaint and held the NFL was not immune from § 1 scrutiny on a “single entity” theory.
- The court held the cross-ownership ban, as implemented, violated § 1 under the Rule of Reason.
- The court affirmed dismissal of the NFL’s counterclaim.
- The case was left in effect after denial of certiorari.

## Legal Principles

- An agreement among member clubs of a professional sports league can constitute concerted action under Sherman Act § 1, even when the league cooperates to produce games as a joint product.
- “Single entity” characterization does not categorically exempt inter-club agreements that restrain competition in markets external to the league’s on-field product.
- Under the Rule of Reason, a league ownership restriction that substantially forecloses capital and ownership opportunities for competing leagues violates § 1 absent adequate justifications that cannot be achieved through less restrictive means.
- Courts must evaluate competitive effects and procompetitive justifications rather than ending the analysis at organizational form.

## Conclusion

The Second Circuit held that the NFL’s member clubs could conspire for § 1 purposes and that the NFL’s cross-ownership ban unreasonably restrained trade by broadly limiting investment and ownership opportunities in competing major professional sports leagues; it reversed dismissal of NASL’s claim and affirmed dismissal of the NFL’s counterclaim.


N. Am. Soccer League v. Nat'l Football League, 670 F.2d 1249 (2d Cir. 1982)