Illegal Defense: The Irrational Economics of Banning High School Players from the NBA Draft
Virginia Sports and Entertainment Law Journal, Vol. 3, pp. 113, 2004
87 Pages Posted: 25 Jul 2004
Each year, the National Basketball Association (NBA) conducts its annual entry draft (NBA Draft), which is the exclusive process by which premiere amateur players gain entrance into the NBA. To the dismay of many commentators, a number of drafted players will have just completed their senior year of high school. Routinely, these players are dismissed as immature, unprepared, and ill-advised, even though most will sign guaranteed, multi-million dollar contracts before their college educations would have begun.
In stark contrast to popular myth, this Article finds that players drafted straight out of high school are not only likely to do well in the NBA, but are likely to become better players than any other age group entering the league. In fact, on average, these players perform better in every major statistical category than does the average NBA player or the average NBA player of any age cohort. Beyond excellence in performance, high school players can also earn substantially more over the course of their NBA careers, largely due to the brief, but steep career earnings-curve of professional basketball players, as well as collectively-bargained labor conditions concerning free agency. Strikingly, players who bypass college may earn as much as $100 million more over the course of their careers than had they earned a college diploma.
These results may appear surprising and even unpopular, but they only represent predictable outcomes of the NBA's economic system, which, perhaps unintentionally, provides unambiguous incentives for premiere high school players to seek entrance into the NBA as soon as possible. In turn, since those players are often the most talented, they tend to develop at a uniquely accelerated rate, and thus their earlier arrival and longer stay ultimately benefits the NBA. At the same time, those high school players better off attending college tend to do so because of contrasting incentives generated by this same economic system. In short, high school players have proven to be the best group of players entering the NBA because the NBA's economic system dictates that very outcome.
Despite the systematically-predictable success of high school players in the NBA, league executives and myriad social commentators desire to ban them. As a result, this Article explores whether federal labor law and antitrust law might preclude the NBA from imposing such a ban. Related discussion analyzes the two most likely forms of employment preclusion: a collectively bargained ban or a unilaterally imposed ban
First, should the NBA and the National Basketball Players' Association (NBPA) agree to a provision banning high school players from the NBA Draft, a court may defer to their collective bargaining, even though high school players would not have had a seat at the negotiating table when such a rule was created. Although the NBA and the NBPA have flirted with such negotiations in the past, this scenario seems unlikely, in part due to the specter of litigation, and in part due to likely allegations of hypocrisy levied against the NBPA, which, historically, has unequivocally opposed such a rule. Moreover, pending the final outcome of former Ohio State football player Maurice Clarett's lawsuit against the National Football League (NFL) and its age prohibition, the mere ability of the NBA and NBPA - and any professional sports league and players' association - to construct such a rule would be cast in doubt.
Even if the NFL defeats Clarett in court, and the NBPA were to accept a ban on high school players during the next collective bargaining negotiation, a group of sympathetic and, more importantly, influential NBPA members could seek to decertify the union. Decertification would require a majority vote of NBPA members. Provided a majority of NBPA members agree to decertify, the NBPA would lose its collective bargaining power, thus rendering the ban ineffectual.
Should the NBA unilaterally impose the ban, however, the analysis turns to antitrust law. Despite recent judicial trends to apply the flexible rule of reason analysis to group boycotts, courts have remained generally consistent in applying the more stringent per se analysis to boycotts where the boycotting group serves as the only option for potential buyers or sellers. In the context of the NBA, high school players, like all potential draft picks, are the sellers since they are selling their talents to NBA teams, the buyers. Because there is no substitute equivalence to the NBA, boycotted players would not be able to secure comparable employment. In this scenario, therefore, high school players would have an excellent opportunity to characterize the ban as a group boycott.
A less predictable scenario would occur if a court employs rule of reason analysis or quasi-rule of reason analysis. In those instances, a judicial balancing of procompetitive and anticompetitive effects would weigh a number of factors, including how a ban fails to provide procedural safeguards, how the NBA dominates global basketball, and how high school players comprise only 4 percent of all NBA players. Because antitrust law has generally been confined to instances where large segments of buyers or sellers have been boycotted, the dearth of high school players may prove significant. On the other hand, a blanket prohibition on high school players would fail to provide procedural safeguards, thus potentially animating a court to find it in violation of antitrust law.
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