FanPost

Anti-Trust For Dummies

The Kings issue is a mess (duh). An purchase agreement between the Maloofs and the Seattle group isn’t official until and unless the NBA accepts it. The application for relocation appears to be headed for denial by the NBA next week. Ownership and relocation go hand-in-hand, and neither is solidified in this situation. If the relocation and/or sale agreement with the Seattle group is denied as expected, do they or the Maloofs take this thing to court for violations of antitrust laws?

I am not an attorney, I don’t play one on TV, and I rarely stay at a Holiday Inn Express. I confess that the term ‘antitrust’ was beyond the legal terminology in my brain - most of which came from a combination of ‘My Cousin Vinny’ and ‘A Few Good Men’. While the urge to picture Joe Pesci grilling Jack Nicholson about ‘ordering two youts to do a Code Red’ is definitely there, it doesn’t help me understand what antitrust is. After a little help from Google and several sports law websites, I’ve put together a little Cliff’s Notes Law School For Dummies summary of antitrust laws applied to sports franchise relocations. I tried to not spin this positively or negatively too much, as the results honestly could favor Sacramento or Seattle depending on your viewpoint. Bigger brains here can elaborate or correct.

Antitrust laws are basically laws that are in place to ensure free competition in trade and industry. Monopolies, price-fixing, etc. Basically anything business-related that might prevent fair competition. For a long time, this wasn’t really an issue in sports as sports were deemed more entertainment than business. Franchise relocations for most of the 20th century were of little importance to the national media and markets. But in the 80’s, sports became big money and big business. Both the Clippers of the NBA and the Raiders of the NFL decided to abandon smaller cities to move to L.A. Each franchise handled the move differently, and each move was opposed by their respective leagues. The leagues' attempts to block these moves went to court. The Ninth Circuit handled cases by both the Raiders and Clippers' relocation and became the leading authority on applying antitrust law to sports franchise movement. Each case had its own findings, but the court established the method for antitrust analysis in sports franchise relocations. The blueprint was simple, while the long-range implications was not.

The main argument of leagues facing antitrust suits is that they are ONE organization of many parts(teams). As they are ONE organization, they can make or deny any moves they feel is in the best interest of the ONE organization. The parts abide by the organization rules and bylaws, and they work with each other instead of against each other. The individual teams counter that while they are indeed part of a bigger organization, they are still independent businesses. They hire their own employees, players, etc. While they may share league-generated national money, they keep all their own local profits and losses. The difference in these views? If the NBA is one big business and not thirty little businesses, then it can do what it wants with the different franchises without regard for antitrust issues. What issue really be deemed unfair or uncompetitive if there is only one main business organization? But if in fact it is determined that the NBA is thirty individual businesses under an overall organization (especially one run by the teams), then these teams would be considered within the scope of antitrust laws.

In the 80’s, the Ninth Circuit has recognized that the NFL was in fact thirty little businesses. Antitrust laws applied. They followed suit with this determination of the NBA and they were also subject to federal antitrust laws. While the NFL and NBA attempted to prevent these relocations, antitrust laws denied the blocks and allowed the Raiders and Clippers to move to L.A. An attempt by a league to deny a sale or restrict teams from relocating is not necessarily an automatic violation of the Sherman Act, however. Rather, the court will determine on a case by case basis if denying relocation is a violation of the antitrust laws. The court would consider the team's interest in moving to a market where greater profits may be realized, as well as the league's interest in restricting franchise moves to enhance the league's economic stability. Most subsequent team relocations went through without this hassle, however. Leagues didn’t and still don’t want to face antitrust cases, and the threat of it has allowed teams to move and expansion teams to miraculously be formed by vacated or denied cities.

So what does this mean? If you’re in Sacramento, it probably means the Kings stay and Seattle gets an expansion team in the next few years. If you’re in Seattle, it probably means you want an army of attorneys to push for the Kings now with the consolation prize of an expansion team in the near furture if the NBA wants to stay out of court. If you’re the NBA, you want this done and over with. Logic says Seattle can be satisfied, Sacramento can keep the Kings, and the NBA can focus on a smooth start to Adam Silver’s reign.

(This is a FanPost from a member of the Sactown Royalty community. The views expressed come from the member, and not Sactown Royalty staff.)

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