Academic journal article The Journal of High Technology Law

Are Major League Baseball and the National Hockey League Violating American Antitrust Laws through Their Blackout Restrictions?

Academic journal article The Journal of High Technology Law

Are Major League Baseball and the National Hockey League Violating American Antitrust Laws through Their Blackout Restrictions?

Article excerpt

I. Introduction

Just about everyday, one can find an American sitting on his or her couch watching a Major League Baseball ("MLB") game or a National Hockey League ("NHL") game. (1) The MLB season runs from approximately April first to November first, including the post-season (2). The NHL season runs from approximately October first to June fifteenth, including the postseason. (3) Millions of consumers watch MLB and NHL games on a daily basis year round, yet consumers cannot always enjoy these games at home, on their personal * television or computer systems. (4) This is in part due to the MLB, the NHL, and local broadcast companies' limitations on the broadcasting market of MLB and NHL games. (5)

In the pivotal antitrust case, Standard Oil Company of New Jersey v. United States ("Standard Oil"), (6) Justice White, writing on behalf of the Supreme Court of the United States, implemented the "Rule of Reason" standard; which begs the question of whether or not the MLB and the NHL are straddling the antitrust line too closely. (7) Recently, restrictions have been placed on MLB and NHL telecasts, which have limited consumers' options with regards to watching their local team, as well as watching an out of market team (8). Often, under antitrust law, if a restraint on trade is so plainly anticompetitive, a court will apply a Per Se analysis when questioned with an antitrust issue. (9) However, a Per Se analysis based on the legality of these anticompetitive restrictions is not always applied by courts even if a horizontal price fix and output limitation is present. (10)

Are the MLB and NHL's blackout policy rules violating antitrust law by granting themselves and television networks exclusive rights to broadcast games, effectively limiting consumers' rights and diminishing competition? Part II of this Note discusses the history of antitrust law, including the general history of the Sherman Antitrust Act and the countervailing views on its application. (11) Part II will also examine how antitrust laws have been applied to the MLB and NHL, as well as give a brief history of sports broadcasting and government regulation of sports broadcasting. (12) Part III will address the current blackout policies invoked by the MLB and the NHL, as well as their purposes and effects. (13) Part IV will analyze the current blackout policies of both the MLB and the NHL and how they fit into modern antitrust law. (14) Finally, Part V will conclude that the current MLB and NHL blackout policies violate antitrust law, as consumers and competition are being harmed. (15)

II. History

A. Goals and Application of Antitrust Law

Antitrust law is one of the most complex areas of law in the United States. (16) The main goal of antitrust law is to increase competition amongst competitors through regulating the market, as opposed to a strict laissez-faire approach. (17) The Sherman Act was enacted in 1890 and fundamentally formed statutory antitrust law in the United States. (18) The Sherman Act was established for the purpose of protecting the public from the failures of an unfair, uncompetitive market. (19) While Sections 1 and 2 of the Sherman Act appear relatively straightforward in context, there has been a continuous legal debate since the Supreme Court's decision in United States v. Trans-Missouri Freight Association ("Trans-Missouri") (20), on how to approach legality under the Sherman Act. (21) In Trans-Missouri, Justice Peckham inadvertently established one of the major theories of antitrust interpretation, the Per Se Rule. (22) The Per Se Rule interprets a contract, combination, or conspiracy in restraint of trade as illegal under Section 1 of the Sherman Act, without analyzing whether the contract, combination, or conspiracy is potentially reasonable. (23) The other form of analysis under antitrust law is known as the Rule of Reason, which was established in Standard Oil. (24) Unlike the Per Se Rule, the Rule of Reason gives courts discretion to analyze the reasonableness of the alleged restraint, as well as the restraint's impact on competition. …

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