In recent years, two law review articles have proposed that the United States regulate commercial sports through a direct federal commission, rather than through traditional antitrust remedies. Nevertheless, the practical realities of commercial sports’ power to influence government policy offset the many theoretical advantages to creating a specialized regulatory body to oversee commercial sports. The commercial sports industry already possesses an extraordinarily strong lobbying arm that has successfully lobbied for special legislation, such as the Sports Broadcasting Act of 1961 and the Professional and Amateur Sports Protection Act of 1992. If commercial sports ever were to become administratively regulated, sports leagues would likely be able to use their lobbying power to obtain even greater concessions under U.S. law. Consequently, this Article argues that, albeit imperfect, antitrust law remains the most practical way to regulate commercial sports leagues.
Washington and Lee Law Review - Sports Law
Response
by Geoffrey Rapp
Professor Nathaniel Grow has produced a creative, thoroughly researched piece arguing that antitrust has failed in the context of professional sports and calling for the creation of a national-level federal regulatory agency to address anticompetitive conduct by the major leagues. I respond to his diagnosis of antitrust’s failings and to his prescription.
Article
by Nathaniel Grow
Four monopoly sports leagues currently dominate the U.S. professional sports industry. Although federal antitrust law—the primary source of regulation governing the industry—would normally be expected to provide a significant check on anticompetitive, monopolistic behavior, it has failed to effectively govern the leagues due to both their well-entrenched monopoly status and the unique level of coordination necessary among their respective teams. Consequently, the four leagues today each, in many respects, enjoy unregulated monopoly status in what is estimated to be a $67 billion industry.
As one might expect, these leagues use their largely unchecked monopoly power to injure the public in various ways. By restricting expansion, leagues create an artificial shortage of franchises enabling their existing teams to extract billions of dollars in stadium subsidies from U.S. taxpayers. Similarly, by preventing their franchises from individually licensing their broadcast rights nationally or over the Internet, the leagues are able to demand significantly higher fees from television networks and consumers than would be obtainable in a competitive marketplace while at the same time subjecting viewers to arcane and outdated blackout provisions.
Unfortunately, existing proposals in the academic literature to remedy this undesirable state of affairs are both impractical and unlikely to be effective. This Article instead proposes a surprisingly often overlooked solution: the creation of a federal sports regulatory body. Because the U.S. professional sports leagues today effectively operate as natural monopolies—with nearly 150 years of history establishing that competing leagues cannot sustainably coexist in a sport for any significant length of time—direct government regulation of the industry is warranted. Indeed, a specialized regulatory body would be particularly well suited to ensure that the leagues’ activities are aligned with the public interest, while at the same time accommodating the industry’s unusual economic characteristics.
Response
by Michael A. Carrier & Christopher L. Sagers
In O’Bannon v. National Collegiate Athletic Ass’n, then-Chief Judge Claudia Wilken of the U.S. District Court for the Northern District of California issued a groundbreaking decision, potentially opening the floodgates for challenges to National Collegiate Athletic Association (NCAA) amateurism rules. The NCAA was finally put to a full evidentiary demonstration of its amateurism defense, and its proof was found emphatically wanting. We agree with Professor Edelman that O’Bannon could bring about significant changes, but only if the Ninth Circuit affirms. We write mainly to address the NCAA’s vigorous pending appeal and the views of certain amici, and to explain our strong support for the result at trial. Reversal of Judge Wilken’s comprehensive and thoughtful decision would thwart needed changes just as colleges are beginning to embrace them and would be mistaken as a matter of law. O’Bannon is a correct, justifiable, garden-variety rule-of-reason opinion and should be affirmed by the Ninth Circuit.
Response
by Sherman Clark
In this response to Marc Edelman’s Article, The District Court Decision in O’Bannon v. National Collegiate Athletic Association: A Small Step Forward for College-Athlete Rights, and a Gateway for Far Grander Change, 71 Wash. & Lee L. Rev. 2319 (2014), I highlight a set of conceptual issues that must be confronted if courts are to craft a coherent and stable body of law governing the NCAA’s treatment of student-athletes. First, the value of the product at issue here—college sports—is intimately connected with the nature of the labor used to create it. Second, the nature of that value is amorphous, contingent, and greater than the sum of its parts. Third, the fairness arguments that drive much of the litigation in this area are based on tenuous assumptions about the relationship between the labor used to create the product and the value of the product.
Response
by Matthew J. Parlow
The O’Bannon decision made a significant change to one of the philosophical pillars of intercollegiate athletics in allowing for greater compensation for student athletes. At the same time, the court took only an incremental step in the direction of pay for college athletes: The decision was limited to football and men’s basketball players—as opposed to non-revenue-generating sports—and it set a yearly cap of $5,000 for each of these athletes. However, the court left open the possibility for—indeed, it almost seemed to invite—future challenges to the National Collegiate Athletic Association’s restrictions on student-athlete compensation. In this regard, the court’s incremental step in college athlete pay may be a harbinger of more dramatic and structural changes to come in the college athletic system. While this Essay does not take a normative position on the legal or economic justifications for such a possible change in intercollegiate athletics, it does seek to describe some of the potential unintended consequences of a free(r) marketplace for student-athlete services. In particular, this Essay analyzes the possible implications and impact on Title IX, as well as college athletic opportunities and values more generally. In doing so, this Essay attempts to explain why the court’s more cautious approach may be needed going forward to balance the varied interest in the college athletic system.
