Friday, September 28, 2007
MSG accuses league of trying to
NEW YORK -- 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.
Scott Arthur Eggers, a lawyer for the NHL, said he had no comment.
The lawsuit said the NHL insisted last week that MSG transfer control over the Rangers' independently produced Web site, including the nyrangers.com address, so that the league could convert it into one of 30 "cookie-cutter" club Web sites at nhl.com.
The lawsuit said MSG had spent years developing the site to market Rangers hockey in competition with other NHL teams. By seizing the site, the NHL would eliminate competition between teams and harm consumers.
"The NHL has no competitive justification for seizing the Rangers Web site, which MSG today uses as a competitive tool to generate and maintain fan interest in the Rangers in competition with other NHL teams," MSG said.
At the start of the playoffs last spring, MSG said it increased its competitive offerings by making Rangers-branded merchandise available through the Rangers Web site rather than a catalog and by making Rangers games available to subscribers on its Web site.
The NHL forced MSG to withdraw the efforts when it imposed a penalty of $100,000 per day, MSG said. When the company refused to pay the fines, the league withheld $200,000 from third-party payments otherwise due MSG, the lawsuit said.
MSG gave in to the league's demands because it did not want to detract from the playoffs and it hoped that it could negotiate a solution to NHL actions it thought were unwise and illegal, it said.
"That hope was in vain," the lawsuit said.