Tuesday, October 6, 2009
The Puzzling Persistence of the Single Entity Argument for Sports Leagues: American Needle and the Supreme Court's Opportunity to Reject a Flawed Defense
Posted by D. Daniel Sokol
Gabe Feldman (Tulane Law) has just posted The Puzzling Persistence of the Single Entity Argument for Sports Leagues: American Needle and the Supreme Court's Opportunity to Reject a Flawed Defense.
ABSTRACT: This Article argues that a single entity classification for sports leagues divorces antitrust immunity from the fundamental purpose of the antitrust laws and is theoretically unsupportable. Antitrust law is designed to act as a gatekeeper, filtering out net anticompetitive conduct. The Seventh Circuit’s single entity approach ignores the competitive effects of league conduct and distorts the basic rationale for distinguishing between single and multiple entity conduct. In doing so, it vests sports leagues with virtually free rein to engage in anticompetitive behavior. This Article also brings to light evidence of actual economic competition between NFL teams that proves that the Seventh Circuit’s single entity analysis in American Needle is factually unsupportable. This Article thus concludes that the Supreme Court should definitively put an end to the single entity defense for professional sports leagues. The Article also proposes a model for streamlining the rule of reason analysis and reducing the litigation burden on sports leagues.