'87 Chronology-Do Not Pass Go

Event Date: March 18th, 1987

Event Description: Sports Antitrust

Source: UPI

Although antitrust suits usually evoke notions of international oil cartels or decades-long battles involving giant corporations, the laws forbidding limits on competition are also used to shape American sports.

The stakes are high and major restructuring of sports organizations can result from the court decisions. When the legal match is over, fan loyalties, player salaries and television schedules may never be the same.

Can a team owner in a league be prohibited by his fellow owners from moving to another city?

The NFL has been sued for a second time -- having already lost on the issue once -- by a team owner who wants the freedom to move his club without interference from other teams. The NFL, arguing it needs stability among its members, is seeking Congressional approval for an antitrust exemption to prevent such relocations. 

Oakland and Baltimore are still fighting legal battles to try to bring back their NFL franchises who fled to Los Angeles and Indianapolis. 

A trial this spring between the National Football League and the United States Football League in a federal court in Manhattan may answer that question and others about the business of professional football.

The nation's first antitrust law, the Sherman Act, was passed in 1890 and literally prohibits every agreement or other concerted activity in restraint of trade.

What makes monopoly so bad? 

The general theory under the Sherman Act is that agreements among competitors to fix prices or divide territories give them the ability to charge unreasonable prices or outright exclude competitors instead of allowing prices to react to free market forces.

Monopoly behavior is deemed to be so repugnant to Americans that penalties are set tripling the victim's actual damages.

An antitrust trial involving football or bowling is not necessarily comparable to one involving the computer industry. The general legal theories are the same, but the nature of professional sports and the degree of mutual cooperation necessary to produce the entertainment product is also a factor that is considered by a jury.

In most of the disputes mentioned above, one or both of the parties alleges the other is conspiring to monopolize the sport. To prove the conspiracy, the complaining party must show that there has been deliberate action by two or more persons specifically intending to destroy competition or achieve a monopoly. At least one act furthering that end must be proven.

In some of the sports cases, the complaints are tied to a specific rule or clause of a league or association's constitution. The Raiders' suit against the NFL successfully established the illegality of the NFL's contitutional requirement that three-quarters of the owners must approve a franchise relocation.

But sometimes the alleged activity seeking to squelch competition can only be inferred from the circumstances. For example, the conduct of the accused might lead to the conclusion that there had been an agreement to shut out competitors -- even if there was no specific written or testimony from witnesses to spell out the illegal agreement.

The need to lay out detailed circumstances and tie the activities in to a scheme of deliberate monopoly behavior often forces trials of these cases to drag on for months and appeals to stretch for years.

Story-(UPI Modified)