The NBA and the Single Entity Defense: A Better Case?
Harvard Journal of Sports and Entertainment Law, Vol. 1, p. 40, 2010
23 Pages Posted: 12 Feb 2010 Last revised: 11 May 2010
Date Written: February 10, 2010
This Article will explore the relationship between the National Basketball Association, its independently-owned teams, and associated corporate entities, including the Women’s NBA, NBA Properties, NBA Developmental League, NBA China, and single entity analysis under section 1 of the Sherman Act. Section 1 chiefly aims to prevent competitors from combining their economic power in ways that unduly impair competition or harm consumers, be it in terms of raised prices, diminished quality, or limited choices. Single entities are exempt from section 1 because they are considered “one,” rather than competitors, and thus their collaboration does not implicate anticompetitive concerns.
In American Needle v. NFL, the Supreme Court will decide whether the National Football League, its teams, and associated corporate entities, constitute a single entity. Other leagues, including the NBA, may be impacted by the Court’s decision. If the NBA were a single entity, it could potentially execute exclusive contracts with video game companies and apparel companies, restrain players’ salaries and employment autonomy, and impose heightened age restrictions on amateur players who seek employment in the NBA, all without concern for section 1 scrutiny.
In a recent feature in the Yale Law Journal, I discourage the Court from recognizing the NFL as a single entity but recommend that Congress consider targeted, sports league-related exemptions from section 1. In this Article, I survey whether the NBA’s globalized business agenda and the league’s exposure to competition from foreign professional basketball leagues necessitate that NBA teams act in unison and with a “shared consciousness.” The necessity of cooperation, at least for certain international endeavors, may distinguish NBA teams from teams in NFL, which remain more anchored to domestic operations. To the extent Congress considers legislative exemptions for professional sports leagues, the experience of the NBA, a trailblazer in promoting a league product abroad, may lend insight on how antitrust law should regulate leagues in the years ahead.
Keywords: American Needle v. NFL, Single Entity, Sherman Act, Antitrust, National Basketball Association, American Needle, Congress, NBA China, Women's NBA, NBA Developmental League
JEL Classification: K10, K20, K21, K31, L22, L4, L40, L41, L82, L83
Suggested Citation: Suggested Citation