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.”

 

The NFL has agreed not to require its teams to set minimum prices in ticket resale marketplaces as part of a settlement with several state attorneys general.  The settlement caps an investigation that was initially launched by New York Attorney General Eric Schneiderman into possible antitrust violations involving the NFL’s implementation of resale price floors, the practice of putting a lower limit on ticket prices to ensure they are not sold for less than a set value.

 

The NFL encouraged individuals interested in selling tickets to do so on the NFL Ticket Exchange, a marketplace operated by Ticketmaster. The NFL Ticket Exchange thereby could prevent sales below the face value of the ticket, as a means of generating additional revenue.  Because some teams require ticket holders to use the league-promoted platform, even sellers who would be willing to sell for less could not do so.  Instead, fans were forced to pay a minimum price for all NFL games.

 

The resolution with Florida, Massachusetts, New York, Ohio, Pennsylvania, and the District of Columbia is designed to make it easier for fans to find tickets at lower costs on the re-sale market.  It also includes an agreement that the NFL will pay approximately $100,000 to cover the cost of the multistate investigation. The NFL admitted to no wrongdoing and paid no other financial penalties.   But whether that means cheaper seats for NFL fans is uncertain, since teams will still be allowed to individually set minimum re-sale prices if they desire (although they must inform ticket sellers when a price floor is set).

 

It remains to be seen whether state attorneys generals take issue with other existing price floors.  Just this past summer, the New York Yankees settled a longstanding disagreement with StubHub over the use of price floors. StubHub, who initially was adverse to any price floor, has agreed to set floors at 50% of a ticket’s price at the season ticket rate.  StubHub will reportedly now be the primary fan-to-fan ticket resale site for the Yankees.

Former UCLA basketball star and NCAA champion Ed O’Bannon was the lead plaintiff in a 2009 class action lawsuit that was the first serious challenge to the lifeblood of the NCAA’s very existence: all of its players are unpaid amateurs.  The case – forever called the “O’Bannon” case – claimed Division I men’s basketball and football players ought to be compensated for the commercial use of their names and likenesses.  Both sides appealed the Ninth Circuit Court of Appeals’ 2015 ruling, but on Monday the U.S. Supreme Court denied both petitions, preserving the NCAA’s coveted system of amateurism . . . for now.

The denial leaves in place the lower court’s ruling favor of O’Bannon, where a three-judge Ninth Circuit panel found that NCAA Rules constitute an unlawful, anti-competitive conspiracy between the NCAA and its 1,000-plus schools.  Before the Ninth Circuit heard the case, the District Court ruled that colleges must reward men’s basketball and football players up to $5,000 per year while they are in school for the use of their names, images and likenesses, but two of the three Ninth Circuit judges overturned the payment portion of the ruling.

Continue Reading Supreme Court Declines to Hear the O’Bannon Case, Holding in Place the NCAA’s System of Amateurism

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