Blowing the Whistle: Balancing Antitrust Law Against Labor Law in Professional Sports

Abstract

Wages, conditions and terms of labor for professional athletes in the three most successful American leagues have fallen prey to the uniqueness of their industry. Salary caps, player drafts, reserve clauses, and franchise tags among other structures are features of the labor market for the professional player. These features have been proven restrictive and depressive towards the salaries, career length and post career benefits of the players. Although this highly entertaining and glorified product generates billions of dollars in revenue, the people making it all possible must bargain for their compensation, longevity and safety. In a conflict between billionaire ownership and millionaire athletes, issues, generally, are the same as between blue collar industries and their labor. The only difference is how the federal government, particularly the courts, interpret and apply the law. This thesis identifies the inconsistencies in federal court rulings regarding antitrust and labor law and connect them to imbalances in salary, benefits and restrictions within and across the MLB, NFL, and NBA. By performing two structured case analyses on each of the three major professional sports leagues, I identified the main contradictions in court rulings and their preceding bargaining agreements. The findings of this research are that although the players have legitimacy in their antitrust claims, their unions do not have the resources, manpower, or political power to successfully fight to protect their interests in court. Subsequently, they fight for their interests at the collective bargaining table. In comparison to other professional athletes, although baseball players have little to no means of filing antitrust suits against the MLB, they remain free of a salary cap, and have much more stable contracts thanks to out-of-court negotiation strategies. These strategies also proved to be successful outside of the sports industry in the labor relationship between television and film writers and their producers, evidenced by the strike of 2007/08. Three policies are recommended as a result of this research. The first is to exempt major professional team sports from antitrust liability in the expectation that other sports react similarly to the MLB-MLBPA relationship. The second policy recommendation is to repeal the full antitrust exemption granted to baseball so that courts have a much simpler time adjudicating these disputes across the leagues. The last option is simply to mandate a system of mediation under the National Labor Relations Act that is specifically geared towards understanding, evaluating and facilitating sports agreements. After careful consideration, I determined the second and third policy option show evidence of being the most plausible, least risky and most likely to maintain a healthy labor relationship under current antitrust and labor statutes. This thesis is evidence of a cautious optimism towards a solution to this conflict in labor, which often goes unrecognized and unappreciated for its role in public policy.