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The Single Entity Doctrine

Comparative study on different league structures globally, focusing on North American closed leagues and Spanish/Latin American club leagues. Exploring the Single Entity Defense in sports law and its implications on competition challenges. Examining club agreements' impact on consumer benefits and distorted league decisions. Analysis includes specific cases and principles from American Needle and MLB territories.

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The Single Entity Doctrine

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  1. The Single Entity Doctrine SPORTS LAW FALL 2010

  2. STRUCTURE OF A LEAGUE • Comparative study reveals different type of league structures • North American closed commercial leagues • Spanish/Latin American member club leagues • Vertical separation: NASCAR SPORTS LAW FALL 2010

  3. SINGLE ENTITY DEFENSE • Precludes §1 challenge to sports league • Contrast with rule of reason analysis • Contrast with ancillary restraints doctrine • Not relevant to §2 claims SPORTS LAW FALL 2010

  4. Two §1 Concerns re Sports • Club agreement eliminates competition between the clubs that would otherwise benefit consumers • League decisions distorted because leagues controlled by clubs SPORTS LAW FALL 2010

  5. Intro Problem: MLB Territories • MLB owners agree that each club has exclusive rights to all satellite/ premium cable sales in its "territory," resulting in inability to get any games here other than superstations (which can't be blocked) and local teams Is this rule [544a] "one adopted more for the protection of individual lg members from competition than to help the league?" What result if Emir owned all baseball teams? SPORTS LAW FALL 2010

  6. Focusing on the Problem: NASL v NFL • What is the significance in NFL v NASL of the exception for same city ownership? SPORTS LAW FALL 2010

  7. AMERICAN NEEDLE • Captain Renault antitrust • Two decisions challenged • NFL rule that clubs must assign exclusive rights to TM/logos to NFLP • NFLP decision to assign these rights only to Reebok SPORTS LAW FALL 2010

  8. 2/ Needle • * Basic principles • - [573]: “eschew formalistic distinctions” for “consideration of how the parties ... actually operate” • - Sealy [573a]: where corporation controlled by rivals, pierce veil and §1 applies • - Copperweld [574] requires a “single center of decisionmaking” • - [574a]: central evil of §1 is the “elimination of competition that would otherwise exist” SPORTS LAW FALL 2010

  9. /3 Needle • Do you agree with Judge Williams in Raiders dissent [562] and Judge Easterbrook in Bulls [564-5] that "NBA Basketball" is one product from a single source, like McDonalds or GM? SPORTS LAW FALL 2010

  10. /4 Needle • What guides the NFL’s decision to have all merchandise licensing centralized in NFLP? • Do you agree with JPS [576] that the interests of the clubs with regard to merchandising are NOT necessarily aligned? SPORTS LAW FALL 2010

  11. /5 Needle • What competition that would otherwise exist is foreclosed by NFLP’s rules? • Why can’t we presume that NFLP’s decision necessarily is the best way to market NFL merchandise? • Agree w/ Raiders dissent [560c] that the NFL represents the “most efficient manner of reaching day-to-day decisions” for the league? SPORTS LAW FALL 2010

  12. Fraser v MLS • Is MLS a single entity under American Needle’s reasoning? • On the merits, is a decision to organize as a single entity reasonable? SPORTS LAW FALL 2010

  13. MLB Advanced Media • Initial grant of IP rights is clearly an agreement after American Needle • If this initial grant is lawful, then no serious risk of distortion, because MLBAM likely to be found to be a single entity SPORTS LAW FALL 2010

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