Recently when I think of the National Football League and Commissioner Goodell a certain scene from the movie Gladiator plays in my mind.  I see Goodell riding into the NFL empire in all his glory as did Commodus into Rome and thinking “ He enters Rome like a conquering hero. But what has he conquered?”  Well it becomes more and more apparent, that Goodell has conquered some of the FUN.  The NFL acronym no longer stands for the National Football League in the minds of many fans, but has morphed into the No Fun League.

Something even more deplorable than fining OCHO CINCO for any of his various celebratory antics or fining T.O. for his always entertaining comments has recently occurred, the NFL actively preventing donations to Gridiron Greats, a nonprofit that helps retired players.  According to the AP, Captain Morgan  was planning to make $10,000 donations to the Gridiron Greats for every time a player appeared on camera in the iconic “Captain’s” pose.

"The issue is that players are specifically prohibited under our policies from wearing, displaying, promoting or otherwise conveying their support of a commercially identified product during a game while they're on the field," NFL spokesman Greg Aiello told Yahoo! Sports. (AP).   Translation, the NFL wants ALL the control, and more importantly wants to be compensated for all advertisement.

Granted, Captain Morgan may not have followed all of the procedures and regulations set by the NFL and endorsement of an alcoholic libations by players may not be the best “role model” for young fans (god-forbid have to talk to their children about alcohol, that is if they don’t already do because of all the beer and liquor commercials crunched between NFL games) , but dare I say lighten up NFL.  Most fans know or should know that the NFL is notorious for not taking care of its retired players, but if you don’t take a few minutes and check it out.  You may be thinking don’t they get paid a bazillion dollars a year and if they don’t have the money to pay for necessary medical procedures and treatments then shame on them.  But many of the retirees in need played before the days of monopoly money contracts and have serious need for the NFL and NFLPA  to step up take care of those players whose back the league was built on.

Now I am not a proponent of NFL players endorsing alcohol, nor am I am fan of the NFL denying needed donations to support Gridiron Greats, so I guess I don’t have a rhetorical horse in that race.  But I do hope that this controversy does not focus on the Commissioner versus the Captain, but can expose issues and needs plaguing countless Gridiron Greats of the past.

Did you know that America’s pastime was really the secret and evil partner in crime of the healthcare and insurance industry?  Well neither did I.

But politics and sports collide in this interesting snippet of political campaigning.   Regardless of your opinion on public healthcare, this is an interesting perspective on the anomaly that is baseball’s antitrust exemption. Also reveals how truly powerful MLB is and has been for decades.

The video is worth the 30 second watch.  So, take me out to the ballgame and buy me some peanuts and propaganda!

http://www.youtube.com/watch?v=vVHW5JOzv6A&feature=player_embedded

V. Unilateral Uniqueness of Professional Sports: Biased Revealed

To further evaluate whether the courts are deciding the antitrust and federal labor law issue through strict legal analysis one must examine the uniqueness of professional sports.  Specifically, whether or not professional sports are truly unique and require special rules and legislation, or are professional sports only unique when convenient for the courts and their predetermined decisions.  The language is bold and accusatory, yes, but not without cause.  Let us reflect back and examine a chronology of professional sports history of uniqueness.

1.     The courts held that professional sports are a unique profession and therefore group-boycotts and refusals should not be analyzed under the traditional per-se test.[i]

2.     The courts held that the interdependent nature of professional sports requires traditionally illegal horizontal restraints on trade to shall be legal in the unique context of professional sports.[ii]

3.     The courts held that professional sports are unique in that they operate under a collective bargaining agreement and therefore are exempt from antitrust scrutiny.[iii]

4.     The United States Supreme Court held that the “‘unique features’” of professional sports are not sufficient to make the case “‘atypical’” under the statutory exemption and refused to recognize an exception to the antitrust exemption.[iv]

The simplified analytical summaries presented above exemplify what I define as the unilateral uniqueness of the professional sports industry.  Essentially, unilateral uniqueness encapsulates the judicial system’s inconsistent determination, application, and effect of the unique characteristics of professional sports.  Under the theory of unilateral uniqueness the courts identify and consider the non-traditional characteristics of professional sports when doing so removes anticompetitive regulations from antitrust scrutiny altogether or from the per se illegality of group-boycotts.  While on the other hand, the courts hold that professional sports are not so unique as to require special treatment that other industrial trades would not enjoy.  Completing the circular logic of the courts, professional sports is unique enough to enact anticompetitive restraints traditional industries cannot, but not unique enough for the individuals affected by the regulations to contest them in antitrust.  Ironically, the court in Brown was concerned about preventing special treatment for professional sports, but based on the traditional group-boycott per-se rule of illegality; employees within traditional industries would not face the same anticompetitive regulation.

Under the proposed doctrine of unilateral uniqueness three possibilities arise: (1) the courts retreat from stating that professional sports are unique at all and therefore apply the per- se rule of illegality to age-based restrictions as a group-boycott; (2) the courts recognize the true uniqueness of the industry and allow prospective players, not truly represented by the collective bargaining agreement to challenge the actions in antitrust (an exception to the exemption); or (3) decertification of the bargaining units by the National Labor Relations Board.

The first option seems doomed from the start as almost every opinion on the issue has held that professional sports is unique enough to remove it from the traditional per-se scrutiny of antitrust.[v] The second option, though not impossible, is a proverbial long-shot, as the court will not likely overrule its decision in Brown[vi] under stare decisis.  Additionally, the United States Supreme Court has been given multiple opportunities to review the issue again and alter its holding if necessary, but has denied writ of certiorari each time.[vii]

The most likely manner in which the courts would allow antitrust scrutiny of age-based eligibility requirements of the collective bargaining agreements is decertification of a respective sport league’s player union by the National Labor Relations Board.  In order for a labor union to get decertified the following provisions would have to be met “an employee … individual…or labor organization acting in their behalf alleging that a substantial number of employees…assert that the…labor organization…certified… is no longer a representative” of the groups interests.[viii] If the petition to decertify is supported by thirty percent of the represented body a decertification hearing shall be held.[ix] If the NRLB finds that the hearing “demonstrates…a serious question of the union's representative status”[x] the NRLB will hold a secret ballot decertification election.[xi] If a majority of members vote to decertify the union, the NRLB will strip the decertification of the union.  A decertification would void the previous collective bargaining agreement negotiated by the decertified union and the conditions therein would no longer be protected by the non-statutory exemption and subjected to antitrust scrutiny.[xii]

The problem of union decertification is that the current players/members of the union would have to by a majority agree to disband the players’ collective bargaining association.[xiii] There is no motivation for current players to take such drastic actions to help precluded players enter the league.[xiv] To do so would increase competition within the job market by introducing younger talent previously precluded by age-based regulations.  Additionally, the job security and salaries of non-superstar athletes could be reduced as money or roster slots could be filled by younger high profile talent.[xv]

Additionally, the "longstanding federal labor policy of avoiding unnecessary interference in internal union affairs,” would preclude ineligible players from being represented in the organization, once again. [xvi] The United States Supreme Court has even held that it is beyond the scope of the NLRB’s authority to require non-union members' participation in decertification elections.[xvii] Therefore, despite the moment of optimism related to union decertification the facts appear to weigh against the precluded players, as the unions are swinging with powerfully corked bats and precluded players are not even allowed to the plate.

Conclusion:

This article does not allege that the entire judicial system has sacrificed its ethics and legal reasoning for stadium hotdogs, crackerjacks and the thrill of a game-wining homerun, touchdown, goal, or three-point-shot. However, the power and importance of professional sports in modern American has a much more pragmatic and rational basis for its apparent judicial endearment.  A conscious or subconscious desire to preserve the status quo and stability of professional sports is likely rooted in the recognition of professional sports’ vast impact and importance in society.[xviii] As one commentator remarked;  “professional sports has grown to the extent that [it] directly affect[s] hundreds of thousands of people, [and t]he  communications, finance, real estate, travel, higher education, insurance, recreation, advertising, and entertainment sectors of the economy…all have substantial interest in the success of the business of professional sports.”[xix] The extreme impact professional sports have on the economy and individuals are the very qualities that make an industry dangerous and antitrust laws were designed to regulate.  The mere fact that professional sports is glamorous and entertaining does not mean its power should be overlooked and treated differently than traditional industrial giants.

Players precluded by age-based eligibility requirements are temporarily or permanently, prevented from having the fame, fortune and opportunities of a professional sport career (contract), the justice system should not hold them ineligible for their day in court through blanket antitrust exemptions.

IV. Applying Antitrust Laws To Professional Sports: Problems, Controversies and Confusion.

As discussed, the legal history of anticompetitive regulations in professional sports has played out in the legal arenas of antitrust law and federal labor law, but the game is far from over.[i] Unfortunately, the courts have not crowned a clear champion nor has the progress been as easy to follow as a box-score.[ii] Ambiguity and chaos is perpetuated by the very nature of professional sports.[iii] The professional sports industry places a variety of industry specific problems on the courts that makes it difficult to determine the applicability of antitrust law versus preeminence of federal labor law.[iv] Specifically, the courts have struggled with the ultimate question of determining whether professional sports are truly a “unique”[v] industry for the purpose of balancing antitrust and federal labor law.[vi] Before answering the critical question of uniqueness, certain preliminary issues must be examined: (1) determining the relevant market and end product of professional sports; and (2) evaluating the roles and relationships between owners, current players, and precluded players.

A. Determining the Relevant Market & Product

A relevant antitrust market must include “‘products or services that are interchangeable with, as well as identical to defendant’s product,’” in which the contested regulation operates.[vii] More specifically,  a relevant employment market is one that “employment positions are reasonably interchangeable with those offered by the defendant.”[viii] Despite these seemingly simple rules, further examination reveals patent and latent application difficulties.[ix] First and foremost, the obvious question is which rule should govern the relevant antitrust market affected by age-based eligibility requirements.  The decision is not made in a vacuum, but must deal with the enigma that is professional sports.  In order to fully explore the question it is necessary to define the product of professional sports.

1. Possible Market Perspectives

The first step in defining the product of professional sports is determining the perspective upon which the analysis will be based.  Two possible perspectives are plausible for framing the antitrust analysis: (1) the precluded player’s perspective or (2) the owner’s perspective.

i. Precluded Players’ Perspective

In the excluded player’s perspective the product of professional sports is a “high-paying [and] high-profile career”[x] in their sport of choice and the opportunity to compete in “an unparalleled…level of competition.” [xi] Preventing an athlete from his trade in order to comply with age-based eligibility requirements could foreclose the possibility permanently.  Meaning a player could never have the opportunity to bargain his skills for the product of professional sports career and the accompanying compensation and benefits.  Such immediacy in professional sports is based on the fact that the “career of a professional athlete is uncommonly short, compared with other fields… and is greatly encumbered with the risk of…injury.” [xii] Simply and powerfully phrased, precluded players “‘are not losers in a competitive marketplace; they are not even allowed in the game.’”[xiii] Further, the product that professional athletes are selling is their talent and forbidding them from selling it to the monopolistic preeminent leagues close the market to the athlete.  Such league actions seem to be “‘unreasonably disruptive of market functions such as . . . market entry,’” which by nature threaten and invite violation of the Sherman Act...’”[xiv]

The Second Circuit in Clarett did not determine the issue of product and market definition because they hid behind the blanket of the non-statutory exemption.  However, other cases have examined the question in detail[xv] and the issue seems to rest upon an application of the § 6 of the Clayton Act, which states:

The labor of human beings is not a commodity or article of commerce.  Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor…organizations, instituted for mutual help, and not…conducted for profit, or to forbid or restrain individual members of such organization from lawfully carrying out the legitimate objects thereof… [xvi]

The language of the Clayton Act was interpreted by the United States Supreme Court in Apex Hoisery Co. v. Leader[xvii] to mean that,

It would seem plain that restraints on the sale of employee’s services to the employer, however much they curtail the competition among the employees, are not in themselves combinations or conspiracies in restraint of trade or commerce under the Sherman Act.[xviii]

Despite how seemingly fatal the combination of the § 6 of the Clayton Act[xix] combined with the interpretation of the Act apears at first glance, many courts “have not hesitated to apply the Sherman Act to club owner imposed restraints on competition for player services.”[xx] The Eight Circuit in Mackey specifically held that “restraints on competition in the market for players’ services fall within the ambit of the Sherman Act.”[xxi] Further, in Denver Rockets the court held that age-based eligibility requirements were “an arbitrary and unreasonable restraint upon the rights” of a prospective professional athlete to bargain freely in a competitive market, and held it to be an illegal restraint of trade.[xxii] If barring an individual from freely negotiating with employers for the purchase of his services is violative of § 1 of the Sherman Act[xxiii] it is quite silly and ironic that the modern trend is to ignore the issue and hide behind the guise of the non-statutory exemption.[xxiv]

ii.  Owners’ (NFLCM) Perspective

The product market from the perspective of the professional sport league members and owners is two fold; (1) the market for purchasing the skills and services of players/employees[xxv] and (2) the end product of professional sports in or as a submarket of the entertainment market.[xxvi] The symbiotic relationship between the players market and the end product market of producing competitive professional sports events for consumption in the entertainment market are quite striking and seemed to have been overlooked as causing additional problems to defining  the antitrust market.

First, the professional sport leagues all require skilled and talented players, which are “expensive…and in limited supply,” a competitive market for acquiring their services naturally exists in professional sports.[xxvii] However, once again the unique qualities of professional sports leagues arise to protect “the success of each franchise [and the league] is dependent on the quality of sports competition,” at the detriment of individuals foreign to the CBA.  The product produced by professional sport leagues is created through interdependence among league members, meaning no one team/franchise can produce a professional sport’s league by itself and requires other relatively equal/competitive teams to produce the product.[xxviii] Starkly revealing the unique nature of professional sport leagues, as compared to traditional industries, a district court judge poignantly stated “‘[n]o interdependence or joint action is necessary to make a bearing or a muffler,’” but such interdependence and collaboration is necessary to produce a professional sport product.[xxix] The presence of interdependence and league’s recognition that consumers will not continually pay money to see “mediocre athletic competition,” has resulted in “self-regulation” of professional sports. [xxx]

Self-regulation exists to ensure the competitive and entertaining quality of professional sports, and to ensure consumer consumption.  The courts have recognized that sport leagues adopt and agree upon many self-regulatory practices and regulation for “[t]he ostensible purpose…to maintain competitive balance…and protect the [teams’] investment in scouting, selecting and developing players.”[xxxi]

Such an example of self-regulation by a professional sport league can be examined through the NFL’s age-based eligibility requirements as challenged in Clarett.  The justifications asserted by the NFL for the rule provide insight into the type of regulations a professional sports league imposes on itself.[xxxii] As previously mentioned, the NFL gave four justifications for the rule and two of which were directly related to self regulation.  Specifically, the NFL sought to ensure the highly competitive nature of their “entertainment product” and also to protect league members from “costs and potential liability resulting from injuries of younger and less developed players.[xxxiii]

The counter argument to the league’s protection rationale is that of greed and distrust among professional sports owners.  Mere economics can simply explain the regulation’s core purpose; there are a limited number of phenomenal athletes potentially ready for the professional ranks prior to obtaining eligibility, therefore the commodity is highly scarce.  The amount league members with requisite resources to invest in such talents are equally limited, therefore the market is scarce.  Leading to a dual conclusion: (1) league members want to protect themselves from big market teams obtaining superior talent and revenues (at least not more than is presently occurring) and not forcing lower market teams to gamble the franchise, farm team, on speculative young talent to compete; and (2) large market teams want to prevent their market share from being reduced if a previously lower market team hits the jackpot with a young superstar (i.e., Lebron James) and prevent themselves from their own greed in which they could waste millions if not billions of dollars on proverbial flops and busts. [xxxiv]

At the core, leagues are trying to protect themselves from their own greed and self-distrust of their ability to safely operate in the market of young superstar talent, by not merely regulating the market, but destroying it.  Ironically, a quote often used to preserve the legality of such eligibility regulations[xxxv] presented in this context appears to backlash against the regulations, as “‘[t]he antitrust laws were enacted for “the protection of competition, not competitors.”’”[xxxvi] In this setting the competitors are the league participants protecting themselves from competition with each other, and as the United States Supreme Court has stated “‘[w]e should always be mindful lest the Sherman Act be invoked perversely in favor of those who seek protections against the rigors of competition.’”[xxxvii] It appears clear that the individuals seeking such protection are the professional sport leagues, in which the precluded athletes are merely trying to gain access to the competition in the market they are excluded from.

The difficulties and confusion involved in determining application of antitrust law or if it falls under the non-statutory exemption are catalyzed by inconsistently deciding at what point in the “production” of the professional sports product anticompetitive are examined and what type of competition is protected.[xxxviii] In the modern era, the major professional sports leagues do not compete against other brands of their own sport, but instead league members are competing against other teams within the league.[xxxix] Such markets have been defined by the courts as interdependent markets in which a higher degree of anticompetitive restraints are tolerated because the nature of the product or industry.[xl] When analyzing the professional sports submarket of entertainment it appears that each league is attempting to “restrain competition, or to enhance or expand its monopoly” through “coercively” restricting certain classes of potential players from their leagues, which are both patent violations of the letter and spirit of antitrust law. [xli]

ii.  Additional discussion of Professional Sport Products

As hinted by the discussion of the relevant product above, the relevant market involved is intimately related to the product, and this has caused some confusion in many plaintiffs and courts.[xlii] The courts have unanimously held that “athletic competition ‘is not protected by the antitrust laws,’” but it appears that the courts have conveniently forgotten about the supposed uniqueness of professional sports.  In professional sports, the employee (player) and product (athletic competition) are so integrated and dependent upon each other that essentially the employee and the product are one hybrid commodity. Remember the statement, “[n]o interdependence or joint action is necessary to make a bearing or a muffler,” but the courts have some how overlooked the fact that no one pays to watch an employee manufacture a muffler, whereas in professional sports the very labor of the athlete is the product itself and not a tangible commodity.[xliii]

Therefore in the absence of a hybrid market definition, the rule most relevant in the cases of age-based eligibility requirements is that of the labor market, in which “employment positions are reasonably interchangeable with those offered by the defendant.” [xliv] In essence, the NFL, NHL, NBA, and MLB all offer benefits and opportunities in their sport that no other employer could offer and therefore is the only employer market requiring the services of the highly talented athlete.  But because of self-fear and distrust that very desirable and prestigious market is closed to athletes not meeting the age-based temporal eligibility requirements.  The Second Circuit eloquently summarizes Clarett’s complaint against the regulation as “such an arbitrary condition…impos[ing] an unreasonable restraint upon the competitive market for professional football players’ services, and because it excludes him from entering the market altogether.”[xlv]

C. Labor Roles and Relationships within the NFL

Now that the relevant product and markets are defined/quasi-defined, the next preliminary issue to examine the the structure of professional sport leagues.  Currently, all four major sports are operating under collective bargaining agreements struck between owners’ and players’ bargaining representatives.  The NFL’s collective bargaining structure will be used as an example.

The National Football League Management Council and the National Football League Player Association have been almost continuously the exclusive[xlvi] bargaining representatives recognized by the National Labor Relations Board since 1968.[xlvii] This section regarding NFL bargaining structure will focus upon the NFLPA.  The decision to focus on the NFLPA is because the prospective players excluded from the league are supposedly represented by the NFLPA.  Pursuant to its Constitution, the NFLPA “pledge[s] to preserve and enhance the democratic involvement of our Members; confirm our willingness to do whatever is necessary for the betterment of our Membership; to preserve our gains and achieve those goals not yet attained.”[xlviii] Further, the NFLPA Constitution states that its primary purpose is the “promotion and advancement” of those “professional football players employed” in the NFL.[xlix] At first glance the argument that the NFLPA is capable of representing those individuals outside of its membership, specifically those not employed by the NFL seems disingenuous  at best.

However, Article II of the NFLPA Constitution discusses the classes of individuals “eligible” to become active members within the organization, which includes “[a] player actively seeking employment as a professional football player.”[l] This may provide a façade of inclusion and representation of prospective athletes precluded by eligibility requirements, but further inspection reveals two potential problems.

First and foremost mere eligibility of membership does not automatically induct an individual into the NFLPA. The NFLPA Constitution requires the payment of membership dues to establish and/or activate an individual as a Member.  The payment of such union dues is required and failure to do pay one’s dues results in suspension or exclusion from the NFLPA.  Most likely prospective player’s “actively seeking employment” have not paid the required dues, therefore are not members of the NFLPA and not represented by the NFLPA.

Secondly, the NFLPA text refers to prospective players “actively seeking employment” in the NFL, but how can an individual ineligible for a position actively seek that position?  The “actively seeking employment” provision which allows eligibility for players not employed but seeking employment in the NFL is likely drafted for those individuals eligible for employment, but not currently signed with an NFL team.

The NFL Constitution did not set up any special procedures or qualifications for prospective players, whereas it did articulate such procedures for players under “Practice Player Contracts” and “retired players.”[li] In Clarett, the Second Circuit stated that the NFPLA has “‘powers comparable to those possessed by a legislative body to both create and restrict the rights of those it represents.’”[lii] By extending the legislature analogy, one can argue that the NFLPA Constitution should be interpreted under statutory rules of construction.  Under such rules of construction the NFLPA Constitution drafter’s obviously knew how to provide specific alternative procedures and requirements for non-traditional members (i.e., retired players) because they appear in the text.  From this perspective, one can make the argument that the NFLPA must have purposefully omitted such regulations regarding prospective players.  The textual exclusion of requirements for prospective players and the argument that precluded players do not fit into “players actively seeking” NFL employment it appears clear that the NFLPA does not nor intend to represent the interests of players precluded by the age-based eligibility requirements.

Further, the NFLPA Constitution binds all members to the terms therein, while also binding its members to all other “by-laws, rules or other regulations duly adopted…or as otherwise authorized by law.”[liii] The NFLPA in its Collective Bargaining Agreement with the NFLMC “agreed to waive any challenge” to the eligibility requirements and “acquiesced [to] the continuing operation of the eligibility rules.”[liv]

Aside from the fact that ineligible players are excluded from the representative benefits of the NFLPA, the courts have seemed to selectively enforce such membership provisions.  For example, the NFLPA Constitution provides that all disputes arising thereunder must be decided under binding arbitration and not via the courts.[lv] NFLPA members are bound by the combination of the NFLPA Constitution and Collective Bargaining Agreement, which essentially govern all disputes within the union and collective bargaining process.  Therefore, the fact that the Second Circuit heard and decided the case at all appears to be additional proof that prospective players are not members of the NFLPA, because members would not have been able to challenge the regulation at all: in the event a challenge was allowed it would have been decided in binding arbitration and not the courts.[lvi] Despite the belief that prospective players precluded from the industry are represented by the NFLPA, analytic examination reveals that they are protected by none and discriminated by both the NFLPA and NFLCM, the proverbial rock and hard place.

The  courts continued their ventriloquist act of speaking out of both sides of their mouths by “cherry-pick[ing]”[lvii] from the “‘unique bundle of compromises’” bargained for, agreed on, and memorialized by the NFLPA and NFLMC in the Collective Bargaining Agreement.[lviii] The court vilified such cherry-picking when unrepresented and precluded players attempted to challenge provisions of the League’s collective bargaining agreement.[lix] The court did not retreat from its belief that federal labor law and collective bargaining would collapse throughout the nation if such challenges were allowed.[lx] One must conclude that selective challenges to provisions within a collective bargaining are not so evil and should subject anticompetitive provisions to antitrust scrutiny.[lxi] If the court does not allow one to challenges provisions of a collective bargaining agreement, then one must view such a selected application of the CBA provisions as evidence of biased analysis creating further speculation and distrust of the court’s supposed impartiality.[lxii]