The usually good Planet Money program has an excellent recent podcast setting forth the arguments for and against the NCAA [National Collegiate Athletic Association] being an unlawful cartel.
It’s not clear if the complaint has now been mooted — Mr. Sterling apparently filed it after reaching an agreement to sell the Los Angeles Clippers to Steve Ballmer only because the NBA allegedly refused to confirm that it was cancelling the June 3, 2014 owners’ meeting(*) regarding a forced sale of the franchise.
The complaint asserts causes of action for breach of contract and the like. The gist of the single antitrust claim is that there is a market for ownership of NBA franchises and that a collective decision to force a sale of the Los Angeles Clippers would injure not only Mr. Sterling but also competition in the market. It would “mak[e] the relevant market unresponsive to consumer preference and to the operation of the free market.”
The complaint seeks at least $1 billion in damages.
The issue raised is an interesting one: can a sports league collectively control its membership? If the answer is “no,” how far does the principle extend? Is there a “market” for golf club memberships which cannot be constrained by collective action to vote out a club member for boorish behavior? What about membership in non-profit associations generally? If you think these latter restraints are OK, is the limiting principle found in the relevant market definition (i.e., being banned from one golf club out of dozens or hundreds in a metropolitan area isn’t competitively significant)– or somewhere else?
(*) Technically, a meeting of the NBA Board of Governors.
Did you ever wonder why teaching hospitals can conduct their medical residency “match” program? And why they can share data and use it to help set wages for residents? And why the match program effectively forbids salary negotiation? The apparent result is that medical residents’ wages have remained flat for about 40 years.
Slate has the story — including the explanation for the above phenomenon, an antitrust exemption granted by Congress. Discuss among yourselves the wisdom of that exemption.
One of the named class plaintiffs in the high-tech employee antitrust case has filed an objection to the proposed class settlement. The plaintiff, Mr. Michael Devine, analogized the approximately $300 million settlement (worth approximately 10% of alleged damages) to a “shoplifter . . . caught on video stealing a $400 iPad from the Apple Store” and a resulting settlement of $40, with the shoplifter keeping the iPad and making no admission of wrongdoing.
Objections by named plaintiffs are quite rare — though a single objection, even by a named plaintiff, is unlikely to carry the day.
The New York Times has the details here.
I just wrote an article about this issue, and the Ninth Circuit’s recent decision in the Safeway case, for the American Bar Association’s Antitrust Counselor newsletter.
You can view the whole article here.