Sport Law Case

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323 F.2d 124
AMERICAN FOOTBALL LEAGUE et al., Appellants,
v.
NATIONAL FOOTBALL LEAGUE et al., Appellees.
No. 8780.
United States Court of Appeals Fourth Circuit.
Argued Jan. 22, 1963.
Sept. 23, 1963.
Background: The National Football League (NFL) was established in 1920. For many years the NFL was the only professional/major football league in the United States. In 1959, the NFL controlled 12 teams in 11 cities (2 being in Chicago). In 1960, Dallas and Minneapolis-St. Paul were each granted teams. 1959 saw the birth of a new league, the American Football League (AFL). Within their first year they had a full schedule which contained 8 teams in 8 different cities.

Antitrust law was first established to encourage competition and efficiency in the market and to prevent big businesses from obtaining monopoly power. Monopoly power is defined in Introduction to Sports Law as, the ability of an entity to exhibit characteristics of a monopoly by controlling the means of selling or producing a product. The antitrust laws help maintain affordable and reasonable prices, at the same time giving the consumers a competitive product. In other words, monopoly power is the power to control prices or exclude competition (Spengler, Anderson, Connaughton & Baker, 2010).

Antitrust law issues have become a major part of professional sports. Antitrust law issues have become a major part of professional sports. Antitrust law was the main issue in 1963 when the AFL accused the NFL of creating a monopoly. The AFL was charging the NFL with monopolization, attempted monopolization and conspiracy to monopolize to monopolize major league profession football. Other antirust issues may include player restraints, franchise relocation, ownership issues, and like this case, disputes between leagues. The AFL and NFL were two separate entities, with separate commissioners, and they did not share revenue. With that being said, the competition between the two leagues was getting very serious.

The Sherman Antitrust Act had a major impact on federal antitrust laws. The Sherman Antitrust Act has two major parts. The first states “every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the several state or foreign nations, is declared illegal. This is especially applicable to the AFL vs. NFL (1963) case. If the plaintiff, being the AFL, was successfully to win this case they had to prove that there is a restriction between the two parties, they had to also show that the parties’ conduct taken under the agreement unreasonably restrained trade because they are anticompetitive. Lastly, the issues had to affect two or more states, known as interstate commerce.

The American Football League had several issues. The first states, “Membership in a league in which the several clubs are reasonably well matched in playing strength and are located in areas which can and will support the teams by attendance throughout the season sufficient to provide adequate revenues for both the home and visiting clubs”. Second, obtaining a group of capable players, and the last issue regarding television rights.

Relating to the first issue, the AFL felt the NFL was planning a monopoly by acquiring franchises in the Dallas and the Minneapolis-St. Paul area. These were two areas that the AFL was interested in and both parties knew these markets would be successful and allow a franchise to thrive. The AFL believed that this was an example of the NFL exercising their monopoly power. The NFL combated this claim by denying they had monopoly power and stated that the acquisition of these two new cities was part of a plan they had organized prior to the AFL being established. The defendant (NFL) continued by saying the timing was merely a response to the proposed plan of the AFL in certain cites, and in no means was it exercising monopoly power. In response to the second issue, the...
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