Chapter 10 Antitrust Law

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Single- Entity Defense

A party must demonstrate that it is a single entity , not an organization made up of separate entities , to defend itself from claims of combination or conspiracy in restraint of trade

Reserve Clause

A type of clause that used to be in many pro baseball contract If a player didn't sign a new contract w/ the team for the next season, all of the provisions in his present contract would automatically renew

Price fixing

Agreement among memebers of a group ( such as a pro league) to set prices @ a contain level to avoid competiton among the memebers

Monopoly power

An entitys ability to have characteristics of a monoploy by controlling the means of selling or producing a product

Monopoly

An organization with exclusive control over means of selling & producing a product

Pro sports leagues Single

Entity defense: Whether a sports league is a single entity or an entities compose of different; separate owners

What types of restraints do teams use to restrict player movement?

Free Agency (comp agreements) Option and reserve clauses No tampering rules Draft System

What is required for a professional sports team to relocate its franchise?

High percent or unanimous vote

Case of Franchise Relocation

Los Angeles Memorial Coliseum Commission v NFL

Contradiction

Measures that would be taken to decrease the being of a pro sports league or org.

NCAA v. Board of Regents

NCAA limits on televised games violates antitrust laws

Sullivan v. NFL

NFL asserted single-entity defense, but the court rejected it -Teams compete individually for local revenue, ticket sales, coaches, players, etc

What did the LA Memorial Coliseum vs NFL case establish?

NFL franchise relocation restrictions violated antitrust laws

Rozelle Rule

NFL rule that states to require a team signing a veteran to compensate the team losing the player

Do eligibility restraints violate antitrust laws

No, if restrictions promote the quality of competition, maintain uniform rules, and assist in orderly scheduling of competitions

Can a single entity violate section 1 of the Sherman act ? Why?

No. A combination or agreement between two parties is a requisite under the act

Which NCAA rules are found to not violate antitrust laws

Not commercial in nature -Eligibility rules, academic standards, (No draft & no agent rules Banks v NCAA)

Free Agency

Period of time when pro athlete is not under contract w/ a particular team, so he is able to freely negotiate w/ any team

Anticompetitive Conduct Under Per Se Rule

Price fixing, group boycotts

Law v NCAA

Rule restricting coaches salary violates antitrust laws

Rule of Reason

Rule used by court in antitrust cases when coduct is not inherently anticompetitive, but it may restrain trade unreasonably

Who is often provided w/ exemptions to antitrust laws? Why?

Sports clubs and leagues; to maintain economic viability and competition

League vs League

Start up leagues outside of NFL, NBA, MLB etc. have generally not been successful -NFL media deals blocked USFL from getting similar deals so they sued and won $1

Mandatory Subject of Collective Bargaining

Terms of employment such as, wages or hours of work that must be agreed to in negotiations between employer and employees

Which NCAA rules have been found to violate antitrust laws in the past?

Those that effect commercial activity

Why were antitrust laws created?

To promote competition and efficiency in the marketplace, protect consumer from monopoly power.

Anti-Trust Exemption

When a court or provision in a statute exempts a party from review under antitrust laws ( sport clubs/ league)

Group boycott

When a league or group of teams collectively agree not to bargain with another group

Labor Exemption

When employers and employees have bargained in good faith ; one party cannot solicit to antitrust claims brought by the other party

Impasse

When parties reach a point where no further progress can be made because the sides cannot agree on further changes

Collective bargaining Agreement (CBA)

Written agreement between employees and employers that provides the exact terms and agreements of the employment relationship

Are individual platform sports subject to antitrust scrutiny?

Yes. Yes they are all found o be businesses in interstate commerce (2+ states)

Clayton Act

allows for damages to be tripled when a court finds that there has been a violation of the Sherman Act

Who can file a claim of anti trust law violation?

an entity by private suit or federal government

Sports Broadcasting Act

exempts from Sherman Act: Section 1

Why have salary cap challenges been unsuccessful in court?

it is considered to be a collective bargaining agreement issue

Frasier v. MLS

league controlled all player contracts, controlled salaries, and had players transfer fees to keep costs down during its early years -Courts considered MLS a single entity, so it could not violate Sherman Act 1

Salary Cap

limit on the amount of money a team can spend on player salaries, applied as per player limit or team limit

Goals of NCAA

preserve amateurism Promote education Maintain competitive balance NCAA has many regulations restricting participation in college sports

Sherman Act

prohibits trade restraint/monopolies

FTC Act

protects against unfair/deceptive acts

Curt Flood Act

provides avenue for antitrust relief for MLB players

Sherman Anti Trust Act: Section 1

regulates agreements that restrain trade focuses on anticompetitive behavior regulates only activities between two or more states

Sherman Anti-Trust Act: Section 2

regulates monopoly and power

Why have states enacted antitrust laws?

to regulate intrastate anticompetitive behavior


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