Radovich v. National Football League

The AAFC was an eight-team league that played from 1946–49. Since it emerged at a time when the NFL was just beginning to recover from the war years (when some teams temporarily merged), was national in scope and had owners wealthier than most of their NFL counterparts, it posed a serious competitive threat to the older league. The NFL took many steps to prevent the AAFC from making headway, blacklisting media who had covered the league as well as players who jumped to it.

Ultimately the AAFC collapsed due to the dominance of the Cleveland Browns, who won all four of its championships, and financial problems and instability at some of its weaker franchises. In December 1949 the two leagues merged. The Browns, Baltimore Colts (not related to the team now known as the Indianapolis Colts) and San Francisco 49ers joined the NFL; other teams folded or merged with an existing team.

In Federal Baseball Club v. National League (259 U.S. 200 (1922)), Oliver Wendell Holmes Jr. had written for a unanimous court that Major League Baseball was not covered by the Sherman Antitrust Act because it was not interstate commerce. Travel by teams across state line was "an incident" to the business of staging baseball games, which he described as "purely state affairs".[4] Three decades later Toolson v. New York Yankees upheld that precedent due to congressional inaction to change it, despite changes in the business such as broadcasting deals that made the interstate aspect a much greater part of the commerce.

Toolson's short, per curiam majority opinion concluded that the antitrust exemption applied to baseball only. In United States v. International Boxing Club of New York (348 U.S. 236 (1955)), the Court denied a motion by the appellee to extend it to professional boxing despite the commercial similarities between it and baseball.

Clark reiterated that the Court's existing jurisprudence on the issue – Federal Baseball, Toolson and International Boxing – was explicit and clear that the exemption applied to baseball only. "As long as the Congress continues to acquiesce we should adhere to – but not extend – the interpretation of the Act made in those cases", he said. But "the volume of interstate business involved in organized professional football places it within the provisions of the Act."[9] He admitted that this was at odds with the reality, but defended the reliance on a congressional remedy as a better process than a judicial one:

If this ruling is unrealistic, inconsistent, or illogical, it is sufficient to answer, aside from the distinctions between the businesses, that were we considering the question of baseball for the first time upon a clean slate we would have no doubts. But Federal Baseball held the business of baseball outside the scope of the Act. No other business claiming the coverage of those cases has such an adjudication. We, therefore, conclude that the orderly way to eliminate error or discrimination, if any there be, is by legislation and not by court decision. Congressional processes are more accommodative, affording the whole industry hearings and an opportunity to assist in the formulation of new legislation. The resulting product is therefore more likely to protect the industry and the public alike. The whole scope of congressional action would be known long in advance and effective dates for the legislation could be set in the future without the injustices of retroactivity and surprise which might follow court action.[9]

He also found that Radovich had adequately stated a cause of action, dismissing claims of frivolity and vagueness raised by the NFL. Broadcasting revenues were likely, if proven, to be enough of the defendants' business alone to come under the terms of the Sherman Antitrust Act. "This Court should not add requirements to burden the private litigant beyond what is specifically set forth by Congress", he concluded. "We think that Radovich is entitled to an opportunity to prove his charges."[10]

"The most conscientious probing of the text and the interstices of the Sherman Law", wrote Frankfurter, "fails to disclose that Congress, whose will we are enforcing, excluded baseball – the conditions under which that sport is carried on – from the scope of the Sherman Law but included football." He was more concerned, however, with what he felt was undue respect for the doctrine of stare decisis, a concern he had voiced in International Boxing. "Full respect for stare decisis does not require a judge to forgo his own convictions promptly after his brethren have rejected them", he concluded.[11]

Harlan, who had been part of the majority in Toolson and International Boxing, also saw the majority as purely arbitrary in his short dissent. "I am unable to distinguish football from baseball under the rationale of Federal Baseball and Toolson", he wrote, "and can find no basis for attributing to Congress a purpose to put baseball in a class by itself". He accused the majority of using "discriminatory fiat" to make "untenable distinctions" between the two sports.[12]

The AFL had been formed by Lamar Hunt two years after Radovich was decided, and played for six seasons. The NFL could not use the same tactics it had against the AAFC, and the two leagues merged in 1966 to become the modern NFL. When the Dallas Cowboys were created to compete for the same market as Hunt's Dallas Texans, the AFL brought a suit that eventually led to the merger.

Today the AFL is considered the NFL's most successful competitor. To secure the antitrust exemptions that made the merger possible, Rozelle promised Louisiana congressman Hale Boggs the NFL would expand into New Orleans, and the Saints and Cincinnati Bengals were added to the league shortly thereafter.

In the 1970s the World Football League (WFL) took on the NFL. An apparently auspicious start, during a short players' strike, turned sour when it was discovered teams gave away many tickets, and soon the teams and their league were experiencing serious financial problems. After a season and a half it folded. The only two teams to have remained solvent applied to join the NFL as expansion teams but were rejected. One of the teams, the Memphis Grizzlies, sued the NFL in its own lawsuit, Mid-South Grizzlies v. National Football League. It took several years for the case to work its way through the federal court system; the Grizzlies ultimately lost their case. The Grizzlies case centered around the league's rejection of the Grizzlies' application making it impossible to maintain operations, which the courts claimed would instead open up opportunities for competing leagues.

The next decade brought the United States Football League (USFL), which played its season in the spring instead of autumn. After three seasons of play during which it never had the same number of teams and many franchises moved, it also filed an antitrust suit it had brought against the NFL. Seeking hundreds of millions of dollars and damages, USFL v. NFL centered around the NFL's television contracts, and in addition to the financial damages, it also sought to invalidate the league's contracts with at least one of the Big Three television networks that dominated U.S. TV at the time. The jury concluded that the NFL was indeed violating antitrust laws but refused to tear up the broadcast contracts (noting that a last-ditch effort to move the league's season to autumn forced out numerous major market teams that would have made a television package more appealing) and only awarded a token $3 judgment in the USFL's favor. The failure to secure either objective in the lawsuit, coupled with mounting debts, prompted the USFL to cease operations.

There have been two prominent efforts to establish a major professional football league outside the NFL's auspices since the USFL's lawsuit, neither of which has resulted in lawsuits or antitrust challenges. In 2001, NBC, shut out of its TV contract with pro football for the first time since the 1960s, formed the XFL as a joint venture with the World Wrestling Federation. The league played one short season, during the winter, and emphasized entertainment value over top-flight competition. Amid rapidly declining interest and viewer disappointment in the product, the XFL shut down. The United Football League sought to create a parallel pro league in 2009; the UFL managed to put a respectable product on the field but was shut out in its efforts to secure the paying television contract that was required to make the league's finances viable, and amid massive financial losses it played its last games in 2012, by which point the league was unable to draw fans or pay its players.

The owners recognized the National Football League Players Association (NFLPA) because some congressmen and senators pointed to the nonunion status of the league to deny support for exemptions. The NFLPA and the league clashed in court over labor issues and antitrust law. First there was Kapp's lawsuit, which the league eventually won when it was reheard by a jury.[13] Then Baltimore Colts tight end John Mackey sued to block enforcement of the "Rozelle Rule", by which teams that signed another team's free agents were compensated with players or draft picks determined by the commissioner.[14] His legal victory gave the players free agency, which their baseball counterparts had been denied by the Supreme Court, but the NFLPA bargained it away in return for compensation to current and former players affected by the Rozelle Rule.[15]

After the 1987 strike, the players won it back, but only after New York Jets running back Freeman McNeil filed a successful lawsuit that challenged the free agency provisions under the Sherman Act.[16] Eventually the players got the current free agency system in return for a salary cap.

The 1987 strike led to another antitrust action before the Supreme Court, Brown v. Pro Football, Inc. (518 U.S. 231 (1996)). Anthony Brown, a practice squad player for the Washington Redskins during the strike, challenged the teams' decision to unilaterally impose a $1,000 weekly maximum for practice players. This time, the NFL won, as the justices ruled 8-1 that groups of employers, as well as single employers, could implement a contract provision they had offered in good faith during an impasse.

Two other significant actions have been brought against the NFL on antitrust grounds. The first was from the North American Soccer League (NASL), which challenged an NFL policy, never formally adopted, barring owners from having interests in other professional team sports. Rozelle had pushed for its inclusion as an amendment to the league constitution, believing that owners must be focused on football and could be in a conflict of interest with the NFL if they owned franchises in other sports, since the other sports competed for disposable income with the NFL.[17] Opposing them were Hunt, Miami Dolphins' owner Joe Robbie and Edward Bennett Williams, who at the time owned the Baltimore Orioles as well as the Redskins. Hunt had founded the Dallas Tornado, and owned part of the NBA Chicago Bulls for a while. Robbie's wife owned the Fort Lauderdale Strikers, and Robbie himself warned that the policy was "an open invitation for a lawsuit under the Sherman Act".[18]

The NASL brought suit against the NFL, arguing that its restrictions on cross-ownership were an unfair trade practice to deny other sports and leagues full access to the pool of experienced franchise owners. After losing in district court, it won on appeal[19] but by then was in desperate straits, and folded two years later. The NFL's ownership policies were slightly modified; Rozelle never got the full limitations he wanted.

During that time, the most significant suit in modern NFL history was brought. The Los Angeles Memorial Coliseum Commission (LAMCC) sued the league over its provision requiring unanimous approval from other owners for franchise moves, which had otherwise hindered its efforts to conclude a lease with the Raiders, then playing in Oakland, where owner Al Davis was unhappy with the condition of Oakland–Alameda County Coliseum. Davis had also been incensed that the league had allowed the LA Coliseum's previous NFL team, the Los Angeles Rams, to move to Anaheim Stadium despite his abstention from the vote. His team began play in the LA Coliseum in 1982.

The LAMCC's suit was the NFL's most notable use of the "single entity" defense: that despite being composed of more than two dozen separate member teams it was one business for purposes of the Sherman Act. It failed both at trial and then in appeals court, and ultimately the Supreme Court denied certiorari in 1984.[20] Shortly afterwards the Colts moved to Indianapolis, the first of several franchise moves made possible by the invalidation of the NFL's ability to prevent them.

The NFL's antitrust-related legal entanglements as a result of Radovich have led to suggestions that antitrust law cannot be applied to professional sports leagues in the same way they are applied to other businesses. In 1981, while testifying before the House Judiciary Committees in support of another exemption bill, Rozelle complained that "[L]eagues are regularly damned in antitrust if they do and damned in antitrust if they don't." He noted that at the time, the city of Oakland was planning to sue the NFL if it allowed the Raiders to move to Los Angeles, and the LAMCC was suing it for not allowing the move.[21]

Rozelle's complaint received some support in the 1990s when sports-law expert Gary Roberts testified to Congress that sports-related antitrust decisions, including many of those above, had been "inconsistent, often unjustifiable, and generally counterproductive".[22] In Brown, Justice Stephen Breyer's majority opinion acknowledged that "clubs that make up a professional sports league are not completely independent economic competitors, as they depend upon a degree of cooperation for economic survival."[23]