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Bruce Sokler is Chair of the Antitrust Section and a Member in the firm’s Washington, DC office. Bruce applies his extensive experience, understanding of clients' business, and judgment developed in his over 30 years in private practice to a broad range of antitrust matters, as well as communications regulation, including associated First Amendment and copyright law matters. He counsels and has represented Fortune 100 companies, not-for-profits, start-up entities, trade associations and domestic and international joint ventures. Bruce has been involved in antitrust matters spanning a broad range of industries, but has particularly deep experience in the communications, health care, and retail industries.

You don’t think of sports website FanGraphs as a go-to source for legal analysis. But in a provocative April 30th post by Nathaniel Grow, https://www.fangraphs.com/blogs/the-supreme-court-might-reconsider-mlbs-antitrust-exemption/, it was suggested that maybe—just maybe—the Supreme Court might be winding up to reexamine baseball’s anomalous antitrust exemption.

Baseball’s judicially-created antitrust exemption is now nearly 100 years ago. Federal Baseball Club v. National League, 259 U.S. 200 (1922). Justice Holmes’ opinion has stood the test of time. The Court held that baseball is not engaged in a business in interstate commerce—it’s the national pastime. Justice Blackmun’s opening section, delineating all the baseball greats, in the 1972 opinion Flood v. Kuhn, 407 U.S. 258 (1972) upholding the exemption, could be envisioned read aloud by James Earl Jones in “Field Of Dreams.”

Since 1972, litigants have looked for loopholes or limiting factors in the exemption—or even asked for it to be overturned. All have failed, and the Supreme Court has declined in the last four decades to take another baseball antitrust case.

So what is different this year? The FanGraphs post noticed what potentially could be a straw in the wind. Or maybe it will be nothing.

There are two petitions for certiorari pending at the Supreme Court. In one, Wyckoff v. Office of the Commissioner, No. 17-1079 two former scouts allege that baseball and its teams have colluded to depress the market for scouts. In the second, Right Field Rooftops v. Chicago Cubs, No. 17-1074, the plaintiffs assert that the Cubs have unlawfully attempted to monopolize the market for watching their games in-person by purchasing a number of the formerly competing rooftop businesses operating across the street from Wrigley Field and also blocking the view of some of the remaining rooftops by installing new, expanded scoreboards.

Neither petition asks the Supreme Court to overturn the exemption in its entirety. Both argue that consistent with the general rule that antitrust exemptions should be narrowly construed, the baseball exemption should not applied to their cases.

There is a potential straw in the wind noted by Professor Grow. As had been done previously, the respondents in the cases waived their right to file an opposition brief to the petition for certiorari. However, unlike the previous cases, after the cases were first circulated for conference, the Supreme Court entered an order directing that opposition briefs be filed. They have now done so arguing that the exemption covers “the business of baseball” and that both cases fit within the business of baseball.

At the end of the day, the straw will likely float to the ground, and certiorari will be denied. The cases have again been distributed for the May 17th Conference.

 

Although the Federal Trade Commission currently is short-handed with one Democrat and one Republican serving on the Commission (out of a normal lineup of five), today they showed that bi-partisan consensus still can exist in Washington.  The FTC, along with California and DC, have sued to block the proposed merger of DraftKings and FanDuel, the two largest daily fantasy sports sites.

The federal court complaint alleges that paid daily fantasy sports contests in the United States represent a distinct antitrust product market.  According to the complaint, consumers of paid fantasy sports are unlikely to view season-long fantasy sports contests as a meaningful substitute due to the length of season-long contests, the limitations on number of entrants and other issues.  The FTC claims that entry or expansion by other providers is not likely to provide timely or effective new competition.

DraftKings and FanDuel are the two largest daily fantasy sports sites, controlling together more than 90 percent of the United States market.  The complaint alleges they are each other’s closest and most significant competitor and they have battled head-to-head to offer best prices, product quality, largest prize pool and greatest variety of contests.

A federal judge will decide whether to enjoin the merger pending an administrative trial at the FTC.  That hearing will turn on whether the FTC can factually demonstrate its view that daily fantasy sports is its own market.  DraftKings and FanDuel issued a statement that they are “considering all their options.”

No, the First Monday in October is not when the first poll for the College Football Playoffs is released.  And it is not the day of an important college football match-up.  However, it still might be an important day for college athletes—and the NCAA.

As many know, the First Monday in October is when the Supreme Court reconvenes.  It is also likely to be when we will find out whether the Supreme Court will hear the O’Bannon case, the Court having the pending petitions for a writ of certiorari teed up for decision at their September 26th conference.  O’Bannon v. NCAA, 802 F.3rd 1049 (9th Cir. 2015). Continue Reading First Monday in October Might be Big Day for College Athletes