Table of Contents
WHAT IS SPORT? .......................................................................... 2
ANTITRUST................................................................................... 2
MARKET CONTROL...............................................................................2
PRINCIPLES OF ANTITRUST LAW THAT APPLY TO THE SPORTS INDUSTRY. 3
SHERMAN ACT.....................................................................................4
AMATEUR ASSOCIATION ANTITRUST CASELAW.......................................5
ANTITRUST ISSUES IN PROFESSIONAL SPORTS......................................5
BASEBALL’S EXEMPTION.......................................................................6
APPLICATION OF ANTITRUST TO NFL.....................................................6
DETERMINING ANTITRUST VIOLATIONS.................................................6
SINGLE ENTITY DEFENSE......................................................................9
MONOPOLY IN PROFESSIONAL SPORTS – SHERMAN 2...........................11
ANTITRUST AND LABOR MARKETS.......................................................12
FRANCHISE OWNERSHIP RESTRICTIONS..............................................14
LABOR LAW................................................................................17
APPLICATION OF THE LABOR ACT TO SPORTS......................................17
PROTECTIONS FOR UNION ACTIVITY....................................................17
PLAYER ASSOCIATIONS.......................................................................17
UNION AS THE EXCLUSIVE BARGAINING REPRESENTATIVE....................19
UNION REGULATION OF AGENTS.........................................................20
DUTY TO BARGAIN IN GOOD FAITH......................................................20
DUTY OF FAIR REPRESENTATION.........................................................21
AMATEUR SPORTS..............................................................................21
SECOND PART.............................................................................24
DEFLATEGATE....................................................................................24
INTERCOLLEGIATE SPORTS AND ACADEMIC ELIGIBILITY........................24
DOPING.............................................................................................25
THE FEMALE CATEGORY IN SPORT.......................................................28
DISABILITY........................................................................................29
INJURY TO ATHLETES..........................................................................30
1
, WHAT IS SPORT?
MMA The court in Jones v Schneiderman stated that a state ban on professional MMA does not
violate the First Amendment, Equal Protection, Due Process, or the Commerce Clause so long
as it is rationally related to legitimate interests like safety and public morals, applies
evenhandedly, and does not regulate beyond state borders. However, if the statute is applied
inconsistently or lacks clear definitions, an as-applied vagueness challenge may survive.
Russian The court in Commonwealth v Atencio state that a person may be criminally liable for
Roulette manslaughter if they engage in wanton or reckless conduct that encourages or participates in a
joint enterprise likely to cause serious harm or death, even if the victim voluntarily participates.
Encouragement or cooperation in a dangerous activity—like Russian roulette—can establish
causation and criminal responsibility, without the need to show coercion or intent to harm.
Difference Mixed Martial Arts Russian roulette
between the In the U.S., Mixed Martial Arts (MMA) is Russian roulette, on the other hand,
two sports considered a legitimate professional sport. It is not considered a sport—it is an extremely
is regulated by state athletic commissions, dangerous, often deadly, and illegal activity.
features sanctioned competitions, and is It involves knowingly risking death with a
governed by established safety rules (e.g., the loaded firearm and has no structure, rules, or
Unified Rules of MMA). Fighters are licensed protective oversight. Courts treat it
athletes, and events like UFC are recognized as criminally reckless behavior, not athletic
as mainstream sports entertainment. competition.
ANTITRUST
MARKET CONTROL
Mechanisms of Strategies to Restricting market access: professional sports leagues often
Market Control Exclude control who can enter the market (teams and stadiums). This
in Sports Competitors includes:
Leagues o Franchise Expansion and Relocation Rules: majority or
supermajority approval from existing owners for new
teams to join or for current teams to move.
o Territorial Rights: Many leagues assign exclusive home
territories to teams preventing other teams from moving
into that area without approval.
o Venue Control: restrict access to major stadiums or
arenas,
Limiting labor mobility:
o Player Drafts: Teams gain exclusive negotiating rights
over a drafted player.
o Salary Caps and Luxury Taxes: limit how much teams
can spend on players, constraining player earnings and
discouraging wealthier teams from outbidding smaller-
market teams.
o Franchise Tags / Qualifying Offers: allow teams to retain
players through one-time contract offers that discourage
2
, free agency.
o Non-compete Clauses in CBAs: prevent players from
switching leagues or participating in alternative
competitions.
Preventing formation of competing leagues:
o Group Boycotts: Refusing to schedule games or
recognize teams/players affiliated with other leagues.
o Exclusive Broadcasting Deals: Signing long-term
contracts with media companies to deny exposure and
revenue to upstart leagues.
o Player Blacklisting: Penalizing or banning players who
leave for or support rival leagues
o Threatening Sanctions: Using fines or league discipline
to deter stadiums, officials, or sponsors from working
with rival leagues.
Strategies to Predatory Pricing: Offering higher salaries than potential rival
control talent leagues can afford.
First-Mover Advantages: Established leagues leverage their
reputation and stability to attract and retain players.
Legal Actions: Enforcing contractual obligations to prevent
players from joining rival leagues.
Player Persuasion: Highlighting the benefits of staying within an
established league.
Team Ownership 1. Intellectual Property (IP)
Assets 2. Exclusion Rights: access to their facilities and can negotiate exclusive agreements
for events and sponsorships.
3. Player Contracts
Structure of a US teams operate under a contractual agreement among team owners, known as
Sports League the league constitution.
Each owner:
o Holds a franchise (team) with exclusive territorial rights.
o Has voting power in league governance.
League governance includes:
o Creation of by-laws and rules to regulate:
Revenue sharing (gate receipts, TV contracts, marketing).
Team and league branding rights.
o A commissioner, with broad authority over the league, enforces rules
and acts in the “best interests of the sport”.
PRINCIPLES OF ANTITRUST LAW THAT APPLY TO THE SPORTS INDUSTRY
Antitrust Law Sherman Act First federal competition law.
(1890) § 1: Prohibits unreasonable restraints of trade (requires concerted
action).
§ 2: Prohibits monopolization (can apply to a single entity).
Clayton Act Supplements the Sherman Act.
(1914) § 4: Allows private parties to sue for treble damages and attorney
fees.
§ 6: Addresses labor issues and mergers that lessen competition.
3
, Types of Third-Party External parties seeking to do business with the league, including:
Antitrust Challenges Players (e.g., free agency restrictions).
Challenges Fans (e.g., ticket price fixing).
Against Leagues Stadiums (e.g., lease agreements).
Aspiring team owners (e.g., franchise expansion denials).
TV networks (e.g., broadcast restrictions).
Team Owner Franchise owners challenging league policies they oppose, such as:
Challenges Salary caps.
Revenue-sharing rules.
Relocation restrictions.
Competing New leagues trying to enter the market and compete with
League established leagues.
Challenges Often claim the dominant league uses anticompetitive
practices to exclude competition.
SHERMAN ACT
Under the Sherman Act, it is illegal to monopolize or attempt to monopolize a market for products or services.
Sherman Act is made up of 2 sections:
Section 1 Applies to restraints on trade. The Supreme Court stated that Section 1 of the Sherman act
only applies to unreasonable restraints of trade.
Unreasonable restraint on trade because almost any agreement between parties
could be considered a restraint on trade.
Prove an To prove an antitrust violation under Section 1 a plaintiff must show:
antitrust 1. A concerted action by at least two parties,
violation 2. which unreasonably restrained trade,
3. that affected interstate commerce.
Standards of The per se rule
review Per se violations are:
horizontal price fixing
market allocation
Practices that facially appear to be a practice that tends to restrict
competition and decrease output.
The violations are per se so by themselves unreasonable restraints of trade.
Per se violations:
have no legitimate justification.
are considered unlawful with the presumption of causing
anticompetitive impacts.
The courts won’t analyze the reasonableness, market impact, or other
justifications of the practice.
The rule of reason
4
WHAT IS SPORT? .......................................................................... 2
ANTITRUST................................................................................... 2
MARKET CONTROL...............................................................................2
PRINCIPLES OF ANTITRUST LAW THAT APPLY TO THE SPORTS INDUSTRY. 3
SHERMAN ACT.....................................................................................4
AMATEUR ASSOCIATION ANTITRUST CASELAW.......................................5
ANTITRUST ISSUES IN PROFESSIONAL SPORTS......................................5
BASEBALL’S EXEMPTION.......................................................................6
APPLICATION OF ANTITRUST TO NFL.....................................................6
DETERMINING ANTITRUST VIOLATIONS.................................................6
SINGLE ENTITY DEFENSE......................................................................9
MONOPOLY IN PROFESSIONAL SPORTS – SHERMAN 2...........................11
ANTITRUST AND LABOR MARKETS.......................................................12
FRANCHISE OWNERSHIP RESTRICTIONS..............................................14
LABOR LAW................................................................................17
APPLICATION OF THE LABOR ACT TO SPORTS......................................17
PROTECTIONS FOR UNION ACTIVITY....................................................17
PLAYER ASSOCIATIONS.......................................................................17
UNION AS THE EXCLUSIVE BARGAINING REPRESENTATIVE....................19
UNION REGULATION OF AGENTS.........................................................20
DUTY TO BARGAIN IN GOOD FAITH......................................................20
DUTY OF FAIR REPRESENTATION.........................................................21
AMATEUR SPORTS..............................................................................21
SECOND PART.............................................................................24
DEFLATEGATE....................................................................................24
INTERCOLLEGIATE SPORTS AND ACADEMIC ELIGIBILITY........................24
DOPING.............................................................................................25
THE FEMALE CATEGORY IN SPORT.......................................................28
DISABILITY........................................................................................29
INJURY TO ATHLETES..........................................................................30
1
, WHAT IS SPORT?
MMA The court in Jones v Schneiderman stated that a state ban on professional MMA does not
violate the First Amendment, Equal Protection, Due Process, or the Commerce Clause so long
as it is rationally related to legitimate interests like safety and public morals, applies
evenhandedly, and does not regulate beyond state borders. However, if the statute is applied
inconsistently or lacks clear definitions, an as-applied vagueness challenge may survive.
Russian The court in Commonwealth v Atencio state that a person may be criminally liable for
Roulette manslaughter if they engage in wanton or reckless conduct that encourages or participates in a
joint enterprise likely to cause serious harm or death, even if the victim voluntarily participates.
Encouragement or cooperation in a dangerous activity—like Russian roulette—can establish
causation and criminal responsibility, without the need to show coercion or intent to harm.
Difference Mixed Martial Arts Russian roulette
between the In the U.S., Mixed Martial Arts (MMA) is Russian roulette, on the other hand,
two sports considered a legitimate professional sport. It is not considered a sport—it is an extremely
is regulated by state athletic commissions, dangerous, often deadly, and illegal activity.
features sanctioned competitions, and is It involves knowingly risking death with a
governed by established safety rules (e.g., the loaded firearm and has no structure, rules, or
Unified Rules of MMA). Fighters are licensed protective oversight. Courts treat it
athletes, and events like UFC are recognized as criminally reckless behavior, not athletic
as mainstream sports entertainment. competition.
ANTITRUST
MARKET CONTROL
Mechanisms of Strategies to Restricting market access: professional sports leagues often
Market Control Exclude control who can enter the market (teams and stadiums). This
in Sports Competitors includes:
Leagues o Franchise Expansion and Relocation Rules: majority or
supermajority approval from existing owners for new
teams to join or for current teams to move.
o Territorial Rights: Many leagues assign exclusive home
territories to teams preventing other teams from moving
into that area without approval.
o Venue Control: restrict access to major stadiums or
arenas,
Limiting labor mobility:
o Player Drafts: Teams gain exclusive negotiating rights
over a drafted player.
o Salary Caps and Luxury Taxes: limit how much teams
can spend on players, constraining player earnings and
discouraging wealthier teams from outbidding smaller-
market teams.
o Franchise Tags / Qualifying Offers: allow teams to retain
players through one-time contract offers that discourage
2
, free agency.
o Non-compete Clauses in CBAs: prevent players from
switching leagues or participating in alternative
competitions.
Preventing formation of competing leagues:
o Group Boycotts: Refusing to schedule games or
recognize teams/players affiliated with other leagues.
o Exclusive Broadcasting Deals: Signing long-term
contracts with media companies to deny exposure and
revenue to upstart leagues.
o Player Blacklisting: Penalizing or banning players who
leave for or support rival leagues
o Threatening Sanctions: Using fines or league discipline
to deter stadiums, officials, or sponsors from working
with rival leagues.
Strategies to Predatory Pricing: Offering higher salaries than potential rival
control talent leagues can afford.
First-Mover Advantages: Established leagues leverage their
reputation and stability to attract and retain players.
Legal Actions: Enforcing contractual obligations to prevent
players from joining rival leagues.
Player Persuasion: Highlighting the benefits of staying within an
established league.
Team Ownership 1. Intellectual Property (IP)
Assets 2. Exclusion Rights: access to their facilities and can negotiate exclusive agreements
for events and sponsorships.
3. Player Contracts
Structure of a US teams operate under a contractual agreement among team owners, known as
Sports League the league constitution.
Each owner:
o Holds a franchise (team) with exclusive territorial rights.
o Has voting power in league governance.
League governance includes:
o Creation of by-laws and rules to regulate:
Revenue sharing (gate receipts, TV contracts, marketing).
Team and league branding rights.
o A commissioner, with broad authority over the league, enforces rules
and acts in the “best interests of the sport”.
PRINCIPLES OF ANTITRUST LAW THAT APPLY TO THE SPORTS INDUSTRY
Antitrust Law Sherman Act First federal competition law.
(1890) § 1: Prohibits unreasonable restraints of trade (requires concerted
action).
§ 2: Prohibits monopolization (can apply to a single entity).
Clayton Act Supplements the Sherman Act.
(1914) § 4: Allows private parties to sue for treble damages and attorney
fees.
§ 6: Addresses labor issues and mergers that lessen competition.
3
, Types of Third-Party External parties seeking to do business with the league, including:
Antitrust Challenges Players (e.g., free agency restrictions).
Challenges Fans (e.g., ticket price fixing).
Against Leagues Stadiums (e.g., lease agreements).
Aspiring team owners (e.g., franchise expansion denials).
TV networks (e.g., broadcast restrictions).
Team Owner Franchise owners challenging league policies they oppose, such as:
Challenges Salary caps.
Revenue-sharing rules.
Relocation restrictions.
Competing New leagues trying to enter the market and compete with
League established leagues.
Challenges Often claim the dominant league uses anticompetitive
practices to exclude competition.
SHERMAN ACT
Under the Sherman Act, it is illegal to monopolize or attempt to monopolize a market for products or services.
Sherman Act is made up of 2 sections:
Section 1 Applies to restraints on trade. The Supreme Court stated that Section 1 of the Sherman act
only applies to unreasonable restraints of trade.
Unreasonable restraint on trade because almost any agreement between parties
could be considered a restraint on trade.
Prove an To prove an antitrust violation under Section 1 a plaintiff must show:
antitrust 1. A concerted action by at least two parties,
violation 2. which unreasonably restrained trade,
3. that affected interstate commerce.
Standards of The per se rule
review Per se violations are:
horizontal price fixing
market allocation
Practices that facially appear to be a practice that tends to restrict
competition and decrease output.
The violations are per se so by themselves unreasonable restraints of trade.
Per se violations:
have no legitimate justification.
are considered unlawful with the presumption of causing
anticompetitive impacts.
The courts won’t analyze the reasonableness, market impact, or other
justifications of the practice.
The rule of reason
4
