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Hockey team sues NHL

2007 September 29
by Skip Sauer

The NHL violated antitrust laws and is acting like “an illegal cartel” by monopolizing control of team promotions, Madison Square Garden claimed in a lawsuit Friday.

MSG, which owns the New York Rangers, said it filed the suit in U.S. District Court in Manhattan because the NHL would begin fining the organization $100,000 per day starting Friday if the company did not give the league complete control over the Rangers’ Web site and other promotions.

The league is seeking to control the licensing of teams for all commercial purposes and to stop teams from marketing apparel, merchandise and memorabilia, the suit said. MSG asked that a judge order the league to stop limiting team promotions, and it also wants the court to clarify the boundaries of the league’s rights.

The company said the NHL had once worked with teams in a legitimate joint venture but had more recently “veered into unlawful behavior.”

“By seeking to control the competitive activities of independent businesses in ways that are not necessary to the functioning of that legitimate joint venture, the NHL has become an illegal cartel,” the suit said.

The NHL appears to be copying major league baseball’s approach to managing team websites. Surely there are significant economies derived from MLB running astros.mlb.com, padres.mlb.com, etc. for the team. Baseball’s internet operations have turned into a significant revenue generator for the league and its teams, and this revenue growth is surely not derived from restricting competition.

In 2006, Chris Isidore wrote:

One of Selig’s greatest legacies might end up being MLB Advance Media, the joint Internet operations for all the clubs. Besides being a leader in things like Web casts and mobile updates for fans, Selig was able to get the owners to agree in 2000 to equally share their Internet revenue, a move that might one day be comparable to Pete Rozelle getting the NFL owners to agree to share their national television revenue.

These facts suggest to me that the NHL’s website operations can be cast in a joint venture framework. MSG’s real complaint could be with the manner in which the venture is produced or, more likely, how the revenues are distributed.

Both newyorkrangers.com and rangers.nhl.com claim to be the “official site of the NY Rangers.” They are built from a similar template and look equally crummy, although the Rangers’ own site has a “Rangers Account Manager” tool that is lacking on the league-produced page.

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