catallaxy files

catallaxy in technical exile

Sports and monopoly

with 2 comments

This is going to be interesting. I’ve often wondered about whether, say, the AFL operates as a cartel or as a monopoly.

The pro football playoffs got underway this weekend, but fans might want to know that the line of scrimmage is moving today to the domed stadium known as the U.S. Supreme Court. The Justices will hear oral arguments on whether a sports league may function as a single business, and make its licensing decisions accordingly.

Over and above arguments about the nature and role of competition in sports leagues (off the field and not on the field) this may also highlight aspects of antitrust to the general public who otherwise might take little notice of it.

The missing antitrust link here, as in most such cases, is the lack of any consumer harm. In a Harris Poll taken in 2008, football was the favorite of 30% of sports fans—as much as baseball, car racing and hockey combined. Football still dominates both attendance and TV viewership among professional sports leagues. The greater harm to consumers would be if owners can’t make decisions to maximize and share revenue, thus making the league less competitive.

Justice Anthony Kennedy, the court’s likely swing vote, has indicated concern in other cases that misguided antitrust enforcement deters behavior that is beneficial to consumers. That seems true here as well. The games belong on the field, not in court.


Written by Sinclair Davidson

January 13, 2010 at 3:35 pm

Posted in Uncategorized

2 Responses

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  1. another question that I wonder about is how they get away with literally being a law unto themselvess. A player gets drunk and caught on camera? here’s a fine.
    Player gets caught playing around, or accused of harrassing a woman, or gets into a fight, or has an argument, or swears in public.
    Fines, suspensions, bans.
    These are real impact on working people’s livelihoods; and the laws they are enforcing are totally moral codes.
    Yet they get away with it consistently. Surely this is a sleeper: at some point, some sportsperson is going to sue the pants of a sporting organisation for lost earnings.

    daddy dave

    January 13, 2010 at 8:36 pm

  2. To a large extent that is employment contract stuff. But I wonder about suspensions and life-time bans – that sounds like restraint of trade.

    Sinclair Davidson

    January 13, 2010 at 8:42 pm

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