Legal Analysis of Player Restraints Under the Sherman Act Part II: Agreements Not to Compete for Players

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Legal Analysis of Player Restraints Under the
Sherman ActPart II Agreements Not to Compete
for Players
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Mackey

• Per se illegality inappropriate because of clubs
  unique interdependence
• Black-letter analysis under rule of reason
• 1) can plaintiff show some demonstrative
  anti-competitive effect?
• 2) is the rule justified by legitimate business
  purposes?
• 3) is the rule no more restrictive than
  necessary?

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Mackey/2

• Did the Rozelle Rule have an anticompetitive
  effect?
• Who is harmed by the rule?

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Re-allocating Strengths Weakness

• SUPPOSE TM A NEEDS QB, TM B NEEDS RB, A HAS EXTRA
  RB, Q HAS EXTRA QB?
• SUPPOSE A HAS EXTRA RB, B HAS EXTRA LB, C HAS
  EXTRA QB AND NEEDS A LB?
• SUPPOSE A HAS EXTRA RB, B HAS EXTRA LB, C HAS
  EXTRA QB BUT NEEDS A PK?
• RESULT IN A FREE AGENT MKT?

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Mackey/ 3

• What constitutes a legitimate business
  justification for a player restraint rule?
• Protecting investment in player development
• Player continuity
• Competitive balance

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Mackey /4

• Was the Rozelle Rule necessary to achieve the
  desired level of competitive balance?

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Fraser

• Is the elimination of all labor market
  competition in Major League Soccer consistent
  with Mackey?
• Is control of destructive irrational spending a
  legitimate justification?

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Plymouth Whalers

• Major Junior Hockey
• For-profit clubs outdraw US minor league hockey
  in attendance
• Players not paid salaries but are paid living
  expenses
• Rosters limited to players between 16-20
• Only 3 20 year-olds per team

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Whalers /2

• Challenged Van Ryn rule 20 year-olds must have
  played previous year in a league affiliated with
  NHL
• Closes loophole in NHL CBA, creating free agent
  if drafted youngster
• Doesnt sign with drafting team
• Doesnt return to college team
• Doesnt play with unaffiliated team (i.e. Europe)

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Whalers /3

• Why isnt the market for competition among OHL
  teams a relevant market?
• Who is injured by the lower quality of play in
  the OHL?