The NBA and the Single Entity Defense: A Better Case?

Harvard Journal of Sports and Entertainment Law, Vol. 1, p. 40, 2010

Vermont Law School Research Paper No. 10-29

23 Pages Posted: 12 Feb 2010 Last revised: 11 May 2010

See all articles by Michael McCann

Michael McCann

Harvard University - Harvard Law School; University of New Hampshire Franklin Pierce School of Law

Date Written: February 10, 2010

Abstract

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

McCann, Michael A., The NBA and the Single Entity Defense: A Better Case? (February 10, 2010). Harvard Journal of Sports and Entertainment Law, Vol. 1, p. 40, 2010, Vermont Law School Research Paper No. 10-29, Available at SSRN: https://ssrn.com/abstract=1550977

Michael A. McCann (Contact Author)

Harvard University - Harvard Law School ( email )

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HOME PAGE: http://hls.harvard.edu/faculty/michael-mccann/

University of New Hampshire Franklin Pierce School of Law ( email )

Franklin Pierce Center for Intellectual Property
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Concord, NH 03301
603.513.5254 (Phone)

HOME PAGE: http://law.unh.edu/person/michael-mccann

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