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Monday, January 04, 2010
Sports Law 2010: Does the NBA Still Have Market Power?

In the 2002 case Fraser v. Major League Soccer, the First Circuit Court of Appeals upheld a jury's finding that Major League Soccer clubs compete in an international market for men's professional soccer labor and thus lack enough "market power" to collude illegally under Section 1 of the Sherman Act.

Since Fraser, few courts have addressed the geographic market definition issue in a labor-side antitrust matter. However, as we approach the 2010s, this issue seems likely to resurface.

In my newest law review article, Does the NBA Still Have Market Power? Exploring the Antitrust Implications of an Increasingly Global Market for Men's Basketball Player Labor (to be published in Volume 41 of Rutgers Law Journal), I discuss the potential antitrust implications of approximately 10-15% of the premier men's basketball labor force moving seamlessly between the NBA and foreign leagues.

Presuming the Supreme Court does not cut away too much at sports-antitrust law when it rules in American Needle v. Nat'l Football League (oral arguments begin Jan. 13, 2010), I predict the issue of geographic market definition will emerge as an important one for sports law in the upcoming decade.


I wonder if you think that the KHL would have the same effect on the relevant players market for the NHL? It has signed some major European players and some NHL veterans?

Blogger Mark Conrad -- 1/04/2010 5:43 PM  


Great question. I would be curious to know what share of players switch between NFL and KHL teams, and whether players are willing to switch between these leagues in exchange for a 10% or less increase in pay ("SSNIP Test").

Interestingly, both the NBA and NHL are typically represented in antitrust matters by Skadden Arps, and their legal arguments are often quite similar--even though different lead counsel from Skadden typically represents each league.

Blogger Marc Edelman -- 1/04/2010 8:05 PM  

Hi Marc:

If you ask me about two years ago, I would guess that about 4 or 5% of players left (notably Jamimir Jagr of the Rangers). However, the KHR has suffered some economic problems and that figure could have dropped.

But in terms of the future -- if the NHL's wage limitations and lack of broadcasting exposure may result in other European leagues becoming for formidable. Speculative yes, but theoretically possible.

Blogger Mark Conrad -- 1/04/2010 10:56 PM  

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