Opinion ID: 2583
Heading Depth: 4
Heading Rank: 2

Heading: Prices and Preferences

Text: In finding the NCAA's restrictive television plan anticompetitive because of its restraints on price, the Supreme Court stated that the NCAA has commandeered the rights of its members and sold those rights for a sum certain. In so doing, it has fixed the minimum, maximum and actual price which will be paid to the schools appearing on ABC, CBS and TBS. NCAA has created the mechanism which produces a uniform price for each national telecast, and a uniform price for each regional telecast. Because of the NCAA controls, the price which is paid for the right to televise any particular game is responsive neither to the relative quality of the teams playing the game nor to viewer preference. NCAA, 468 U.S. at 106 n. 30, 104 S.Ct. 2948 (internal quotation marks omitted) (emphases added). The NCAA Court stated that the fact that, under the conditions imposed by the NCAA, the market is not responsive to viewer preference, with the result that [m]any games for which there is a large viewer demand are kept from the viewers, and many games for which there is little if any demand are nonetheless televised, was [p]erhaps the most pernicious aspect of the NCAA plan. Id. at 107 n. 34, 104 S.Ct. 2948 (internal quotation marks omitted). The NCAA price controls and lack of responsiveness to demand find no parallels in the present record. First, a license to use MLB Intellectual Property is not sold for a sum certain; the licensing agreements call for licensees to pay MLBP a percentage of the moneys they receive from the sale of their products bearing MLB Intellectual Property. Thus, although the royalty percentages for various types of products may be standardized, the dollar amounts to be paid to MLBP by the licensees are not uniform but instead vary with the licensees' sales. Second, Salvino has presented no evidence to suggest that the licensing of MLB Intellectual Property is not entirely responsive to demand. MLBP does not issue licenses that are not requested; there is no evidence that an entity that wishes to obtain a license for particular intellectual property is required to accept or pay for a license that encompasses other intellectual property as well. Moreover, it may be presumed that a prospective licensee, acting in its own economic self-interest, requests licenses only with respect to products that it believes will be purchased. Thus, MLBP grants licenses that are responsive to the licensees' anticipation of consumer demand. Further, a licensee's actual sales of products bearing MLB Intellectual Property are, by definition, responsive to consumer demand. Assuming that the licensees assess consumer demand correctly, they will sell more products bearing logos of a Club that is more popular  more popular either because of its success on the playing field or because of a dedicated fan base  than products bearing logos of a less popular Club. Accordingly, because the license requires the licensee to pay a percentage of its sales prices, the licensee will pay MLBP higher dollar amounts with respect to the intellectual property of the more popular Clubs. Thus, the dollar amounts of the license fees received by MLBP with respect to the intellectual property of the various Clubs are not uniform from Club to Club, but instead are plainly responsive both to the relative quality of the various Major League Baseball teams and to the preferences of the buyers. Indeed, the fact that MLBP receives proportionately higher revenues with respect to some Clubs than others is the cornerstone of what Salvino complains of as price restrictions, i.e., the Clubs' agreement to share the profits equally. Finally, MLBP-licensed products that are not desired by the consumer are not purchased. And because the licenses granted by MLBP require payments of percentages of the licensee's sales, products left behind by the consumer do not result in payments to MLBP or to the Clubs. In sum, unlike the sum[s] certain payable in NCAA, the dollar sums payable for licenses to use the Clubs' intellectual property are not uniform and are entirely responsive to the preferences of licensees and retail product consumers.