MAJOR BLOGS.net (MLN Sports) - Indianapolis, IND. - 12.07.09 - Cap maker American Needle is making Stan Brand nervous.  If they get their way in a court case with the NFL, it could mean the end of Minor League Baseball (MiLB) as we now know it.

Brand, V.P. of Minor League Baseball the voice of MiLB in Washington, D.C., is keeping an eye on American Needle v. NFL, a civil court case making its way to the United States Surpreme Court. While few people outside of the sports business world have heard of it, "American Needle" is rapidly shaping up to be the most significant challenge of the major sports' leagues power to exert near-absolute control of merchandising and "content" media without being called a monopoly.

At the heart of the controversy is American Needle's lawsuit which claims that the NFL has violated section one of the Sherman Antitrust Act as a monopoly by forcing licensees of merchandise to make league-wide deals, precluding a company like Needle from negotiating with each of the individual clubs to license merchandise, perhaps on more favorable terms.

The appeal by Needle asks the court to decide that the teams acted by "concerted action" rather than as one entity, NFL Properties, which, along with similar holding companies of the MLB, the NHL, the NBA, and other major sports, competes for entertainment dollars at a multi-sport level.

If the Supreme Court finds in American Needle's favor, it could radically unhinge everything from merchandising to deals with the various Players Associations.

"As we all know, any threat to the application of the exemption to the core relationship between Minor League and Major League baseball could adversely impact the incentive MLB has to continue its investment in the Minor Leagues in the form of the payment of Minor League player salaries," said Brand. We need to protect this core relationship at all costs, since it could mean the difference between survival and elimination of Minor League Baseball, particularly at the lower classifications."

The decision is expected to be larger than the Curt Flood Act challenge of the dreaded Reserve system which created free agency in MLB in 1978 but also strengthened, in many ways, MLB's monopoly powers in merchandising and communications.

The decision will be significant because it opens the Pandora's box of practices that MLB and other leagues have used to reap millions from exclusive deals with suppliers, licensees, and even media companies.

Even if the Court does not rule in American Needle's favor, Brand fears that Needle or their industry might try to legislate away major sports league's domination of merchandising.

"[I]ndustries that lose cases in the Supreme Court often determine to carry the battle beyond the Court to Congress, seeking statutory reversal for adverse decisions of the Court with which they disagree," observed Brand.

Players Associations, trade groups, and others who have felt the cold shoulder of a major league sport's merchandising or salary negotiation practices have been lining up friend-of-the-court briefs. MLB, the NBA, the NHL, and others are also expected to weigh in.

"In the event that the Court validates the lower court ruling and the single entity theory, we should be prepared to ensure that any legislative initiatives that may be undertaken do nothing to undermine the significant protections achieved in the Curt Flood Act. And we should be ready, which I have no doubt we will be, to explain to our fans, the Congress and the public why baseball’s antitrust protection has served the public interest and the communities in which we play for almost nine decades."

Brand's analysis comes from the perspective of dependence. Minor leagues and owners have reaped more than a billion dollars over their nearly 80 year relationship with MLB's "farm" system.

Developed by Branch Rickey in the 1930s to insure a stream of players as teams in the independent leagues began to fail during the Great Depression, the farm system, in fatter times, has allowed larger teams to reap big gains, and has allowed small market teams to exist at all, without a major source of overhead: Player salaries.

Still, as one front office exec from the independent Atlantic League mused: "If they lost [their money] from MLB, they would find out what it really takes to run a professional baseball club at this level."

Ironically, the National Association of Professional Baseball Leagues (MiLB) that was formed at the turn of the 20th century to preserve the independence of the smaller leagues from the American and National Leagues now fears becoming independent.