Re-Evaluating Major League Soccer (Mls)'s Claim as a Single-Entity League: 10 Years after Fraser V.major League Soccer

By Farrell, Jonathan; Clopton, Aaron W. | Journal of Contemporary Athletics, July 1, 2015 | Go to article overview

Re-Evaluating Major League Soccer (Mls)'s Claim as a Single-Entity League: 10 Years after Fraser V.major League Soccer


Farrell, Jonathan, Clopton, Aaron W., Journal of Contemporary Athletics


INTRODUCTION

"The Importance of the antitrust laws to every citizen must not be minimized. They are as important to baseball players as they are to football players, lawyers, doctors, or members of any other class of workers. Baseball players cannot be denied the benefits of competition merely because club owners view other economic interests as being more important, unless Congress says so (Flood v. Kuhn)."

Antitrust law has always played a role of huge importance for sports leagues. Under the Sherman Act of 1890, the unique structures of sports leagues have been challenged often and have shaped sports leagues in today's world. "The Sherman Act was passed by Congress in 1890 with the overall goal of protecting fair competition in the marketplace and preventing monopolies" (Thornton, 2011, p. 137). Professional athletes use the Sherman Act and its antitrust laws to challenge restraints such as player drafts, restrictions on player movement, standard player contracts, and salary caps. Sports Leagues continue to challenge antitrust laws to find a way become exempt from these laws. Many leagues have tried and failed to find loopholes in the law, with only the exceptions being the non-statutory labor exemption and Major League Baseball's (MLB) fortunes in Federal Baseball v. National League of Professional Baseball Clubs in 1922.

The Clayton Act, Norris-LaGuardia Act, and the National Labor Relations Act have given sports an exemption to antitrust laws. Using the non-statutory labor exemption, sports leagues can engage in activities, such as salary caps, that would normally be considered in restraint of trade. To gain this exemption, leagues must negotiate in good faith with labor (player) unions to come to an agreement as to the conditions of the market. The courts prefer labor relations over antitrust law. The non-statutory labor exemption is the reason why sports leagues and player unions engage in collective bargaining agreements (CBA) that help determine and shape the future of their individual sports. (Jakobsze, 2010)

Federal Baseball ruled that baseball was purely a state affair and baseball games across state lines were incidental, not essential. (Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs) This gave baseball an antitrust exemption that could help sports leagues gain power over labor markets. With an antitrust exemption, a league could impose salary caps, restrict player movement, and impose other rules that would benefit the league but limit, either fair or unfair, benefits for other parties.

Other sports leagues have tried to get MLB's antitrust exemption to apply to them but any attempts have been unsuccessful. In Radovich v. National Football League (NFL), the NFL tried to apply baseball's exemption to itself but the Supreme Court ruled that baseball antitrust exemption clearly applied only to baseball. The Supreme Court has previously said that the Federal Baseball case was wrongly decided but it would be inappropriate to reverse the decision. They believe that role belongs to Congress. In Radovich, the Supreme Court said that as long as Congress does not change baseball exemption, it will continue to "adhere to, but not extend, the interpretation of the Act made in those cases" (Radovich v. National Football League). With the decision in the Radovich case other sports leagues are unlikely to obtain baseball's antitrust exemption.

One possible exemption that sports leagues continue to pursue is the single-entity exemption which roots from Copperweld Corp. v. Independence Tube Corp. (467 US752-Supreme Court 1984) In this case, it was established that a parent and its wholly owned subsidiary are not subject to attack under section 1 for agreements between them. Therefore, sports league desire status as a single-entity in which it would be exempt from Section 1 of the Sherman Antitrust Act and would not have to negotiate with the players union the conditions of the labor market under the non-statutory labor exemption. …

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