Rent seeking behavior is common practice for large corporations with lobbying power. Although this occurs regularly in the political space, firms also compete for the right to display their logos on NFL uniforms. Nike, Adidas, and Under Armor are the official footwear providers of the league. Although other companies are licensed produce cleats that can be worn in NFL games, they are prohibited from displaying their logos.
A new company called Caddix designs and manufactures cleats for high level athletes with patented SmartStuds technology. The cleats are supposed to reduce non-contact lower body injuries. NFL quarterback Caleb Williams believes in the technology so much that he has been fined over $30,000 across two games for wearing the cleats without covering the logo. Caleb Williams does not have a partnership with Caddix.
This three-corporation cleat oligopoly dominates the NFL cleat market share, boxing out competition and impeding innovation. This imposes a clear external cost on players, exemplified by Caleb Williams who would rather pay $30,000 than wear nike cleats.
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