From Federal Baseball to American Needle
Thomas, Cyntrice Jurusha
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The industry of professional sports has been somewhat of a predicament for courts to deal with under antitrust law. While Section One of the Sherman Antitrust Act makes it illegal for economic entities to combine, the unique nature of professional sport leagues requires member teams who would otherwise be economic competitors, to cooperate to some extent. The nature of an industry can influence how law is applied, and an empirical analysis of the characteristics of a particular industry can provide further guidance in the role of antitrust law. While scholars have argued for professional sport leagues to be treated as single entities, the Supreme Court ruled against the single entity status in American Needle. This has made leagues vulnerable to challenges under Section One. This exposure raises a question: because of the uniqueness of sport leagues, how has their conduct been analyzed under Section One of the Sherman Act? Content analysis was used to uncover patterns and trends that exist in judicial decisions concerning Section One challenges against professional sport leagues. These patterns and trends would assist both legal scholars and practitioners in better understanding the complexities of how courts resolve antitrust disputes. Data was collected from two coding schemes to measure the frequency of elements of the rule of reason analysis and the characteristics most prevalent in cases where the court ruled in favor of a professional sport league. The data analysis revealed that courts consider procompetitive justifications most often. Also the most frequent conduct challenged under Section One concern player restraint, and sport leagues asserted an affirmative defense in a majority of the cases where the court ruled in their favor. The study was not meant to yield a predictive formula for judicial rulings, but it does reveal the factors addressed most often in antitrust cases involving professional sport leagues.