Saturday, September 29, 2007

Rangers Sue NHL

We finally have an answer to the reason for the delay in the New York Rangers adapting their web site to the new NHL.com format. According to CBC Sports, MSG has sued the NHL claiming violated antitrust laws by monopolizing control of team promotions.

The AP report can be found at CBC Sports' web site and below.

September 28, 2007

Rangers' owner claims NHL acting like 'illegal cartel'

The Associated Press

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 US per day starting Friday if the company did not give the league complete control over the Rangers' website 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 behaviour."

"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 website, including the "nyrangers.com" address so that the league could convert it into one of 30 "cookie-cutter" club websites 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 website, 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 website rather than a catalog, and by making Rangers games available to subscribers on its website.

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.


For the record, the Rangers' web site is currently in the new format. I'll be keeping an eye on how this plays out.

5 comments:

Drew Celestino said...

Not to play conspiracy theorist or anything, but now let's extend the Rangers' claims against the NHL a bit further, to say, uniform and logo design. It's not far-fetched. Trust me.

Paul said...

Not to be biased based on the team involved here, but I do applaud the Rangers for standing up to the league for this. What ever happened to partnership? Gee, what a concept. The NHL should be overseeing the operation of its 30 member franchises under reasonable guidelines, not running the teams themselves. That's absurd.

There is a point where the teams should have leeway to promote themselves while having a direct connection to league-wide marketing and promotions.

Instead of trying to impose their authority in having control over what teams can do to promote themselves in their own markets, the NHL just should be working WITH the Rangers to broaden their brand presence.

Meantime, newyorkrangers.com remains as the official web address of the team, but now it also redirects to rangers.nhl.com. Interestingly as discussed in the report, they have an alternate address of nyrangers.com. It still has the previous web page design.

Kindred said...

This warrants a gigantic "WTF".

What right does the NHL have to any marketing, advertising, branding, etc of an individual team?

It seems all this boils down to is that the Rangers, being entrepreneurs in a region that has 3 teams all within 20 miles of each other fighting for merchandise bucks, was making money without the NHL getting their hands in the pot for more than they needed. And hence the NHL got upset and turns thuggish.

Boy it seems to me that if the NHL was to pursue this with more teams you could see "new" leagues sprout up and it would be the 50's and 60's again.

NHL Jeff said...

Chris,
The link on NHL.com to the Rangers is in deed in the new cookie-cutter format, and it sends you to rangers.nhl.com (same format that the other team links go to). The difference here is that when you go to nyrangers.com it is still their old, unique format, where as all other clubs' site address goes to teh new league-wide format. I am sure this will all be figured out whenever this law suit is over.

Benjamin said...

yes nhl jeff is right:

http://www.newyorkrangers.com/

http://rangers.nhl.com/