Chapter 10 Antitrust Law
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
