The Misunderstood Alliance between Sports Fans, Players, and the Antitrust Laws
64 Pages Posted: 24 Feb 2016
Date Written: 1997
The baseball strike and the ongoing hostilities between the players' association and owners have evoked criticism and frustration among fans and others. Although the players successfully defeated the owners' most recent attempts to reduce major league competition, the threat of future imposition of competitive restraints by the owners remains. In this article Professor Stephen F. Ross argues that blanket restraints on the market for players affirmatively inhibit on-the-field competition and consequently offend the Sherman Act.
The article begins with the proposition that monopsony - price-fixing behavior by buyers', rather than sellers' cartels - implicates the Sherman Act. Restraints on competition for players' services are thus not exempt from the antitrust laws. As the author notes, restraints of trade imposed by sports leagues are subject to antitrust scrutiny under a rule of reason: under the standard set forth in NCAA v. Board of Regents, such restraints are permissible where reasonably tailored to promote competitive balance.
Professor Ross then applies the NCAA standard to blanket restraints imposed by sports leagues. He first demonstrates that the waiver rule employed by some leagues is tailored to promote league competition, because it allows inferior teams with large payrolls to rapidly improve in the standings by acquiring superior players. To counter the owners' arguments that restraints such as salary caps are necessary to maintain league competition, Professor Ross relies on empirical evidence of the effect of these restraints on competitive balance and demonstrates that, in addition to not promoting competition, blanket restraints affirmatively harm competitive balance. Salary caps, the author argues, not only transfer wealth from players to owners, but facilitate bland, uninteresting seasons in which the same teams have consistently good or bad win-loss records.
The article includes a discussion of less restrictive means of promoting competitive balance, including revenue sharing and progressive salary caps, which might pass antitrust muster. Professor Ross concludes that free competition in the player market protects the interests of both fans and players, such that an alliance of consumers and players might be an effective way to combat the threat to baseball which blanket restraints may pose in the future.
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