Single Entity

[Twinkie defense]

After American Needle v. NFL, it would be stretch for the NBA to assert itself as a single entity in order to rebut the players' anti-trust threats (although there are differences - football does not exist in a global market like basketball does). And given all of the various vested interests at play, this might not be practicable...

But in theory, could not the NBA reconstitute the League as a true single entity, with joint ownership of all the teams and across-the-board (weighted) profit sharing? Not only would a successful single venture be immune from anti-trust damages, but the League would achieve the cost-controls and parity they say are the goals of their collective bargaining.

And even if the specific team interests (like the Clippers' profits) precluded the League from successfully agreeing to change their corporate structure, wouldn't movement in that direction at the very least serve to counter the players' negotiating ploy of disclaiming interest with the League's own negotiating ploy to become a single entity?

In other words, how would movement towards single entity status not be a win-win for the League?

[ranger001]

I think the large market teams would not want to give up control in a single entity venture.

[DBoys]

Single Needle was far from definitive on the issue. it simply ruled that the NFL's MARKETING arm was 30 different ventures that acted completely independently and that thereby could be violating the antitrust act. But the SC pointedly noted that it was NOT ruling on the single entity issue itself for the NFL (or any sports league) in its rules designed to govern player acquisition and promote competitive balance. That is still to be decided.

So the issue of whether the NBA should restructure, can't be answered since they may already be legit as a single entity in the ways that matter.

[ranger001]

"they may already be legit as a single entity in the ways that matter"

Not as regards a salary cap or max salary though. That would likely be an antitrust issue.

[DBoys]

"they may already be legit as a single entity in the ways that matter"

Not as regards a salary cap or max salary though. That would likely be an antitrust issue.

Not a fact. Not decided by the courts. Just your opinion. Was not determined at all by Single Needle, and is an issue that completely remains up in the air to be adjudicated.

I'm not saying either way, because we have no way of knowing until it's ruled on. But the OP took the tack that it was decided, and I'm noting that it wasn't.

We do know that the SC specifically took the time to mention it was NOT ruling out the idea of leagues doing things to ensure competitive balance - and balancing salary expenditures between teams would certainly be up for consideration in that category. But on this specific item or that, it's foolish to think we know for sure what they'd rule. It's a court that is probably pro-business, which would have a bearing on how they would tend to think in coming to a decision.

[ranger001]

Undecided yes I agree. The courts though have said they would not like to have separate laws that pertain to sports leagues only. So in the sense that a maximum salary would be price fixing its difficult to see them suddenly make an exception just for sports leagues.

[DBoys]

Undecided yes I agree. The courts though have said they would not like to have separate laws that pertain to sports leagues only. So in the sense that a maximum salary would be price fixing its difficult to see them suddenly make an exception just for sports leagues.

But it wouldn't be an "exception" if a "Sports League" under the right circumstances only constituted one single business (which is the question to be pondered). If a single entity, you have to compare the NBA to the rules for a single business, not a bunch of them. A single entity has no obligation to compete with itself - unlike separate businesses, it does not want to drive itself out of business - and would certainly be allowed to have limits on its salaries.

[ranger001]

IMO, the simple test of Rule of Reason would negate a max salary. Let says the max salary was set at 0.5% of the cap(3 million?), to me that's clearly an anti-competitive behaviour.

The court is not going to agree to 20% but not agree to 1%, they will either strike all percentages or allow all percentages.

[SO_MONEY]

IMO, the simple test of Rule of Reason would negate a max salary. Let says the max salary was set at 0.5% of the cap(3 million?), to me that's clearly an anti-competitive behaviour.

The court is not going to agree to 20% but not agree to 1%, they will either strike all percentages or allow all percentages.

I doubt the league would base it on percentages, it would likely be based on some form of global competitiveness.

If you cannot understand the NBA has the same objective as a single entity, and because of this could be treated as such, you might not be worth the reply.

But, again the goal of each team is not to conquer the others, driving them out of business. You have to understand, if you have any sense about you?... The NBA is anti competitive by its existence and violate the same reason you apply. There either needs to be instances where the NBA is permitted to act as a single entity or don't allow for sports leagues to exist, as they wouldn't be allowed to schedule games.

[ranger001]

Of course there are instances where sports leagues are allowed to act as single entity. Scheduling games for one as the supreme court has said.

But a maximum salary has been found to be against antitrust laws. The courts have said they will not make special provisions for sports leagues, so the question is why do you think they would go against what they said earlier?

[DBoys]

Of course there are instances where sports leagues are allowed to act as single entity. Scheduling games for one as the supreme court has said.

But a maximum salary has been found to be against antitrust laws. The courts have said they will not make special provisions for sports leagues, so the question is why do you think they would go against what they said earlier?

The SC said all this?

I do know certain things to be factual. A business can set financial limits that protect its interests. A league can create rules that enhance its ability to offer a level playing field. A single entity concept has NOT been ruled out for a sports league. Given all of those absolute facts, leads me to think that your assertions go way beyond what is actually set in stone at this point.

I suspect you're interpreting, or projecting your own opinions, or citing lower court views, or expanding from one specific SC decision to a non-tested not-necessarily-parallel situation, rather than relating cut-and-dried facts.

[ranger001]

Yes the SC did say that scheduling of games is ok in american needle vs nfl.

"the fact that NFL teams share an interest in making the entire league successful and profitable, and that they must cooperate in the production and scheduling of games, provides a perfectly sensible justification for making a host of collective decisions"

As to not having separate rules for sports leagues That is correct. I don't bother to look up a reference.

[SO_MONEY]

Yes the SC did say that scheduling of games is ok in american needle vs nfl.

"the fact that NFL teams share an interest in making the entire league successful and profitable, and that they must cooperate in the production and scheduling of games, provides a perfectly sensible justification for making a host of collective decisions"

As to not having separate rules for sports leagues That is correct. I don't bother to look up a reference.

Host? I wonder what they could be getting at? Your logic is flawed no such ruling exists on cost controls such as salary restraints. Host, can mean many different things, but there is one thing we do know and this is we don't know anything. The courts have yet to rule and a sensible position would be to say "maybe" or "maybe not" as it is not fact and the SCOTUS clearly holds the 30 teams would be permitted to partake in anti-competitive behavior or operate singularly in some cases. Again, leave it at this: we don't know anything, and anything is possible.

[Twinkie defense]

All moot now!

But I do think, based on relevant precedent, that the courts, while allowing unilateral "administrative" types of behavior from Leagues as single entities, would not also do so for labor-related behavior such as unilaterally determining salaries outside of a collective bargaining agreement - unless they decided that the NBA did not hold a monopoly on American professional basketball players.

[DBoys]

You may be right.

But it's hard to eliminate the idea that they might allow league-mandated caps and drafts. Their wording gives an understanding nod to collective rules with financial focus, saying the teams "'share an interest in making the entire league successful and profitable." You can't have profitable teams when the zeal to create better teams produces salary offers that can't be supported by the business model.

[younggunsmn]

The NBA doesn't have to prove it's a single entity. It's set up just like McDonalds. A set of privately owned franchises operating under one umbrella of rules that shares advertising and some infrastructure costs. All the League has to do is prove that its CBA provisions are ancillary to its existence, to it's survival as a competetive business. One franchise failing (or just plain sucking) affects the ability of others to simiiarly turn a profit, and said players to have jobs. Ergo all it has to prove is that its provisions (from the draft to the cap to the tax) are to improve competetive balance and insure the financial health of each franchise.

As long as they are giving players the right of free agency there is no anti-trust issue to bargain.
The one area the NFL might have had trouble in was the franchise tag, which could be construed as denying free agency.

Saying that a salary cap or luxury tax is an antitrust violation is like saying McDonalds or Bank of America can't put a ceiling on executive compensation for their local managers or fix the price of a happy meal.

If McDonalds and Burger King got together and put the same compensation cap in place, that would be an antitrust violation. Because NBA franchises are non-competetive (it is in their best interest not to put each other out of business), much of antitrust law simply does not apply to them.

[Twinkie defense]

McDonalds doesn't have any sort of monopoly power over employing American burger flippers though - so I think that's a poor analogy.

Look at the MLS case which is very instructive here - their saving grace, like McDonald's, was the wide variety of employment options their players have outside of MLS. NBA would have a tougher, though not impossible, case there.

And on the other hand, NFL had clear monopoly power in their hiring practices.