James McCoy (Yazoo) Smith v. Pro Football, Inc., a Maryland Corporation, A/K/A Washington Redskins and the National Football League, (Two Cases)

75-1933, al., TV, et where the No. for Broadcast- Committee

National Citizens challenging validity Com- ing is cross-owner- regarding rules mission’s cable stations. ship broadcast and (Yazoo) McCoy SMITH James v. INC., FOOTBALL, Maryland Cor PRO poration, Washington Redskins a/k/a League, Ap Football

and the National (two cases). pellants 76-2135, Nos. 76-2136. Appeals, Court of United States District of Circuit. Columbia

Argued Dec. 1977. Nov. Decided 9 Nov. As Amended As Jan. Amended 1, 1979. Rehearing Denied Feb. Tagliabue, McKay, J.

James C. Paul C., Buxton, Washington, C. Michael D. on League. the brief for the National Football Nordlinger Bernard I. and Robert B. C., Frank, Washington, D. were the brief Pro-Football, Inc. Jr., Johnson, Washington, H. Stuart D. C., Mundy with whom R. Kenneth and Mo- Ratner, C., Washington, zart G. D. were on brief, (Yazoo) for James M. Smith. McGOWAN, Before MacKINNON and WILKEY, Judges. Circuit Opinion by WILKEY, for the Court filed Judge. Circuit Opinion MacKINNON, filed Circuit Judge, concurring in part dissenting part.

WILKEY, Judge: Circuit private This antitrust action chal lenges legality of the National Football League (NFL) player system, selection com monly plaintiff called the “draft.” The McCoy(Yazoo) Smith, pro James a former fessional played football who one Washington season for the Redskins after being drafted them in 1968. The de Pro-Football, Inc., oper fendants are Redskins, ates the NFL. Smith contends that the draft as it existed in 1968 was an unreasonable restraint trade in Act,1 violation of 1 and 3 of the §§ Sherman that, but for the he would have (1976) pro- any Territory 1. Sherman § § Act 15 U.S.C. of trade or commerce in pertinent part: vides in or United States District Columbia Every contract, any Territory or . between such combination in the form or otherwise, any conspiracy, trust or Territories or or in restraint State or States Columbia, among nations, foreign of trade or District of commerce the several or with States, nations, foreign or with is declared to or between the District of Columbia and illegal nations, foreign . State or or States is declared (1976) provides illegal. Sherman Act 15 U.S.C. § § pertinent part: complaint alleged Smith’s also violation Every contract, monopolization combination in form Act Sherman which forbids § otherwise, attempts conspiracy, conspiracies monopolize. or trust or in restraint or college rights graduating tiating lucrative contract a far more negotiated among the year. year in that each are allocated signed he when injured in that he has been alleges of the clubs’ Smith inverse order NFL clubs in in the amount property2 his business procedures gen- standing. the draft Under he compensation between the the difference poorest followed, the team erally compensation he actually received and preceding during playing-field record existed a had there have received among opportunity, has the first season for his services. “free market” teams, college player a NFL to select the court, Judge District choice; poorest a/trial to the After with the next the team as it exist the NFL draft Bryant held that choice, and so on until has the next record “group boycott” a in 1968 constituted ed (the record winner team with the best per se violation and was Ithus Bowl”) “Super previous year’s Alternatively, he held that Act.3 Sherman point, the first “round” last. At this picked reason, draft, the rule of under completed. In 1968 there is of the draft ^tested because it restraint was an yearly succeeding rounds in the unreasonable were 16 than restrictive “significantly more draft, being of selection the same order legiti whatever accomplish necessary” to Teams had one in each round. followed Judge Bryant NFL had.4 goals mate they had traded unless per choice round damages totaling treble awarded Smith that round to another their choice in NFL have $276,000. The Redskins When Smith (a fairly practice). common liability; of antitrust appealed finding there were 26 by the Redskins was selected damage appealed sides have both choosing in the draft. reason, we Relying on the rule award. draft, procedures similar The NFL like liability and finding of antitrust affirm designed pro- to sports, is damages. professional recomputation of remand By dispersing balance.” “competitive mote I. BACKGROUND among equally arriving player talent newly teams, preferences with all NFL in effect has been NFL which The clubs, produce to the draft aims weaker 1935, nego- under procedure is a since “injury- by utterly a determination monopolization irrelevant to was not discussed issue stage. Court, however, standing and none of in-fact” at the the District appeal. parties has raised it on sports, professional the context of Outside employees regularly stand denied courts have right Clayton Act confers Section 4 of the employ injuries ing to their to sue for antitrust “[a]ny person damages who to sue for treble any injury er, ground to generally on the by property injured in his business shall Berger & Bern employee See is “indirect.” anything antitrust forbidden reason stein, Analytical for Antitrust An Framework (1976). De- . 15§ laws . . U.S.C. (1977). 809, Yet Standing, 821-23 operates 86 Yale L.J. the draft fendants have conceded that invariably that athletes “top found salary the courts have starting depress levels of challenge player standing restrictions have college players," class that NFL at Brief of sports, restraints evidently since these plaintiff, who was includes of, on, operate directly player the detriment be drafted in and to nation to twelfth suggest employee. generally Robertson v. National See Defendants nevertheless sue, any (S.D. arguing Ass’n, standing F.Supp. plaintiff 883-84 lacks Basketball may cases). pecuniary N.Y.1975) (citing have suffered he loss short-run long-run benefits —fi- more than offset is reported Bryant’s opinion Judge accrue to and otherwise —that nancial (D.D.C.1976). time the Since that Pro-Football, Inc., at Brief of from the draft.. Soc'y of Supreme National has decided Court Putting the consideration to one side 29—44. States, Eng’rs United v. Professional plaintiff, career was termi- whose football (1978), L.Ed.2d 637 98 S.Ct. year, injury was not in his first nated an - Barry, Fire Marine Ins. Co. v. St. Paul & benefits, reap rich harvest of this around (1978), U.S.-, 57 L.Ed.2d 98 S.Ct. incorporates theory “net that § defendant’s benefitted, guidance we from whose frivolous, reject provision it. and we loss” Judge Bryant. privilege denied “offsetting benefits” relevance Whatever reasonable- have to the determination F.Supp. at 746. 4. 420 stage, at the merits ness of a restraint subject Plaintiff became evenly-matched teams that are as on the Smith graduated when he as an All-Ameri playing possible. Evenly-matched field as player University can teajns games, tighter pen- make closer Redskins, Oregon choosing in 1968. The morale, races, nant and better thus twelfth, picked Smith first-round interest, maximizing fan broadcast reve- draft choice. After several months ne nues, the sport. and overall health of gotiations, represented by in which he was through effectuated agent, signed an Smith and the Redskins “no-tampering” NFL’s rule.5 Under one-year contract —a version of the Stan rule as it existed in no team was requires dard Player Contract the NFL permitted negotiate prior to the draft sign.7 all The contract awarded drafted, player eligible to be $23,000 signing, “bonus” for Smith a negotiate (or no sign) any team could team, $5,000 additional if he made the and a selected another team in $22,000, salary first-year for a total com $50,000. pensation draft. The net result of these restrictions of right any was that negotiate the with performed Smith made the team and at a given player exclusively by held one high play of level as a until defensive back any given college team at time. If a player he suffered a neck in injury serious the satisfactory agreement could not reach a game final of the 1968 season. His doctors holding rights the team the to his advised him his continue play services he could not in injury paid the NFL.6 After career. his the Redskins 10.2, By-Laws, restraints, 5. upon NFL Constitution & Art. 12.- elude. These which we ex 1(F) (G) (1968), reprinted Appendix here, in press Mackey & Joint no views are discussed v. (J.A.) 212, at NFL, (8th 1976), 543 F.2d 606 Cir. cert. dis missed, 98 S.Ct. 54 L.Ed.2d 59 gov- 6. The draft and its attendant restrictions NFL, (1977); Kapp (N.D.Cal. v. entry college players (“rookies”) ern the into 1974), appeal part part aff’d dismissed the NFL. A set distinct of restraints inhibits moot, (9th 1978). F.2d 644 Cir. mobility they signed the once have February 1977 the NFL clubowners and Player with an NFL club. The Standard Con- Players agreed 5-year Association a new “op- tract it existed in 1968 contained an significant changes contract that works club, the gave tion” clause which a in the event draft, clause, rule, option player Rozelle and Standard that it and a terms, could not come to contract Times, Player right unilaterally play- See 18 Feb. the Contract. N.Y. renew the 2; id., year er’s contract for a at col. second of his col. 26 Feb. at 90% previous year’s salary. despite player, If The a modified draft is far less restrictive than disincentive, “play text; obvious financial elected to the one described in the it continues for option,” agent” out his he (thus players), became “free applying fewer fewer rounds year technically the end of his second selecting “perpetual” eliminates the team’s negotiate free to other team. At this right negotiation players, with its facilitates however, point, player’s “freedom” was con- players’ becoming agents,” “free and establish- siderably rule,” by restricted the “Rozelle NFL salary es minimum levels for “rookies.” Relax- By-Laws, (1968), 12.1(H) Constitution & Art. ations are also introduced into the Rozelle rule reprinted in J.A. at 214-15. This rule essential- (limiting salary “upper players), it to level” ly required signing compensate club to option year (making option salary clause team; player’s former if the two clubs were previous year’s eliminating 110% mutually satisfactory unable rangements, conclude ar- option seasons), clause four after and the Stan- the Commissioner could award Player (providing injury- dard Contract certain compensation players, form of current protection guarantees). These modifications choices, both, future draft or as he in his sole favorably by were noted the District Court in equitable.” discretion deemed “fair and The approving Mackey a settlement of the case. mobility player Rozelle rule restrained because NFL, See Alexander v. No. 4-76-Civil 123 prospective of its in terrorem effect on the (D.Minn. July 1977), slip op. We 26-28. signing team: teams were reluctant to risk los- express legality no views the modified key ing players and draft choices at valuable draft, confining NFL our attention disposition, the Commissioner’s and thus were draft as it existed sign agent” reluctant to a “free unless had reaching agreement succeeded in player’s with the By-Laws, 7. NFL Art. 15.1 Constitution & agreement former team —an which the (1968), reprinted in J.A. at 216-17. team, recalcitrant, pre- if former it were could $92,200. damages in the amount of $19,800, actual representing an additional Smith $276,600in re ac ordinarily figure have This was trebled amount he would (“op laws.10 cordance with the antitrust played had he out second ceived tion”) year of his contract.8 II. ANALYSIS filed years injury his Two after Smith the NFL legality finding After suit in District Court. essen laws11 is draft under the antitrust laws, the antitrust that the violated impression.12 This first tially question damages Judge Bryant awarded Smith (1) requires us to consider whether case between his actual equal difference governed by per se legality of the draft is he compensation compensation and reason; (2) whether rule of rule To in a free market. could received reason, by the rule if tested amount, Bryant Judge compute latter restraint; whether, (3) a reasonable in a free market plaintiff assumed laws, the violates the antitrust the draft negotiate a three- have been able to adopted damages the District measure “injury protection contract with an year Judge was We discuss these issues proper. e., clause,” pay guaranteeing i. clause in turn. of a contract player’s ment for full term incapacitated. Judge if he should be even Illegality Per A. Se “free Bryant estimated Smith’s annual salary salary” taking analy market annual framework of traditional (Pat ($54,000) another defensive back sis under 1 of the Act is familiar Sherman § 9with Fischer) signed agent” require who as a “free does not extended discussion. contract, resulting prohibits “[e]very The calcu 1 combi the Redskins in 1968. Section $162,000 conspiracy, as the contractual nation ... or in restraint yielded lation in market. of trade or While this lan a free commerce.” value Smith’s services illegal guage enough is to render Judge Bryant this sum subtracted broad From received, netting understandings, the $69,800 nearly in fact all commercial Smith NFL, Kapp F.Supp. supra. v. 6 The District Court in 390 8. See note' part appeal (N.D.Cal.1974), in dis 73 'd aff supra. 6 9. See note moot, (9th part in 586 Cir. missed F.2d 644 rule, 1978), Rozelle the “no-tam held that 4, (1976). Clayton 15 15§ Act U.S.C. § rule, unreasonably player pering” draft player legality analogous trade. The restrain football, like all 11. Professional professional sports been in restraints other baseball, subject sports excepting anti is opinions; in district court discussed several NFL, Compare 352 laws. Radovich v. trust decisions, motions of these rendered on most 445, 390, (1957) 77 1 456 U.S. S.Ct. L.Ed.2d injunctions, preliminary inconclusive. Kuhn, 258, 92 with Flood v. S.Ct. See, g., Basketball e. v. National Robertson 2099, (1972). agree 32 L.Ed.2d 728 Restrictive Ass’n, 867, F.Supp. & 67 F.R.D. 389 893-96 Players Associ ments between NFL and its 691, (S.D.N.Y.1975) (suggesting in dic 693-94 ation, bargaining in like collective contracts player clause tum that NBA draft reserve industries, may proper circumstances may laws); v. violate Denver Rockets antitrust scrutiny under the be shielded from antitrust 1049, Inc., Management, F.Supp. 325 All-Pro See, exemption.” g., law e. Mine “labor United (C.D.Cal.1971) (granting preliminary 1056-58 657, Pennington, v. 381 85 S.Ct. Workers 1585, U.S. injunction injunction), nom. reinstated sub 189, (1965); 14 Amal L.Ed.2d 626 Local Ass’n, Haywood v. 401 National Basketball Co., gamated 381 Meat v. Jewel Tea Cutters 1204, 672, (Doug 91 U.S. 28 L.Ed.2d 206 S.Ct. (1965). 85 14 640 U.S. S.Ct. L.E.2d las, J., chambers, 1971) Philadelphia (same); exemp The District Court found the labor law Hockey Hockey Philadelphia v. World Club inapplicable facts tion to the NFL draft on the Club, (E.D.Pa. F.Supp. case, 741-44, 351 503-04 F.Supp. and defend of this 420 injunction per 1972) (denying preliminary on se appealed ruling. See Brief of ants have not theory suggesting clause but that NHL reserve NFL at reason); Hock Prof. violate rule of Boston NFL, Appeals Mackey 543 12. The v. Court of Cheevers, ey Ass’n v. dismissed, 1976), (8th cert. F.2d Cir. remanded, (1st (D.Mass.), F.2d Cir. (1977), held 54 L.Ed.2d 59 U.S. S.Ct. 1972). laws. that the Rozelle rule violated the antitrust illegal per Supreme Court Oil13 estab has been held se —and Standard judicial gloss lished a on the which statute draft, regardless characterized, how is made the “rule of reason” the prevailing appropriately should more be tested under rule, of analysis. mode Under this fact- rule reason. weighs finder all the circumstances of a “group boycott” The classic is a concerted in deciding case a restrictive prac whether attempt by competitors group at one prohibited tice should be imposing protect competi level to themselves from competition. unreasonable restraint tion non-group from members who seek reason, inquiry mandated the rule of compete Typically, boy at that level.15 laborious, however, is often and as the cotting group deprive combines to would-be gained experience courts with antitrust competitors relationship trade problems they types identified certain they (or in) need order enter survive agreements consistently which were so un group the level operates. wherein the reasonable that could be deemed ille group may accomplish pur exclusionary se, gal per without inquiry elaborate into pose suppliers by inducing sell to purported justifications. Among the potential competitors, by inducing custom practices perni that have been deemed so or, ers buy them, cases, not to in some cious as to be per unreasonable se are cer by refusing competi to deal with would-be tain “group boycotts.”14 instance, tors themselves.16 each how argues Plaintiff that the NFL draft con- ever, boycott” “group hallmark of the “group boycott” stitutes a because the NFL the effort competitors to “barricade clubs concertedly refuse to deal with competition themselves from at their own player before he has been drafted after level.”17 It this purpose to exclude com team, he has been drafted another petition that Supreme has characterized the consequence per is in se Court’s invoking group boy decisions violation of 1. The District accept- § Court per cott se rule.18 reject ed this argument. We it. We hold The NFL NFL draft differs from the properly “group boycott” boycott characterized as a group significant least classic two re- —at not the type boycott traditionally First, spects. the NFL clubs which have S., 1, 13. Standard Oil of N. v. U. J. 221 U.S. 31 tailers induced manufacturers not to sell 502, (1911). competing S.Ct. 55 L.Ed. retailers); Broadway- 619 Inc. Klor’s v. Stores, Inc., 207, 705, Hale 359 U.S. 79 S.Ct. 3 g., Corp., 14. E. United States v. General Motors (1959) (invoking boycott per L.Ed.2d 741 se 127, 145-16, 1321, 384 U.S. 86 S.Ct. 16 L.Ed.2d rule where retailer induced manufacturers (1966); Klor’s, Broadway-Hale 415 Inc. v. retailer); competing distributors not to sell Stores, Inc., 207, 212-13, 705, 359 U.S. 79 S.Ct. FTC, Originators' Fashion v. 312 U.S. Guild (1959); Originators’ 3 L.Ed.2d 741 Fashion 457, 703, (1941) (invoking 61 S.Ct. 85 L.Ed. 949 FTC, 457, 703, Guild v. 312 U.S. 61 S.Ct. 85 boycott per se rule in where manufacturers (1941). L.Ed. 949 buy competing duced retailers not manufacturers). See Worthen Bank & Trust Sullivan, 232, 230, 15. L. A. Antitrust 244 Inc., BankAmericard, Co. v. National F.2d 485 (1977). 119, (8th 1973), denied, 124-25 Cir. cert. 415 918, 1417, (1974) U.S. 94 S.Ct. 39 L.Ed.2d 473 boycott type 16. Id. at 230. The third is boycott” label, (“group consequent find comparatively only rare: can be effective ing per illegality, properly (1) se restricted to necessary boycott- where it is for firms at the competi horizontal combinations to exclude ing level to deal with one another in order to tors; (2) vertical combinations exclude com carry business, true, example, on their as is (3) petitors; designed combinations to influ in the case brokers. See Silver v. New York practices boycott victims); ence trade E. A. 341, Exchange, 1246, Stock 373 U.S. 83 S.Ct. 10 Tours, v. (1963). Inc. Consolidated Air Tour McQuade L.Ed.2d 389 Comm., 178, (5th -Manual 467 F.2d 186-87 Cir. Sullivan, supra 17. denied, L. A. 1972), 1109, 912, note 15 at 245. cert. 409 U.S. 93 S.Ct. Note, (1973) (same); 34 L.Ed.2d 690 9 Conn.L. g., Corp., 18. E. United States v. General Motors 336, 335, Note, (1977); Rev. 340 55 Nebr.L.Rev. 127, 1321, 384 U.S. 86 S.Ct. 16 L.Ed.2d 415 (1976). 344 (1966) (invoking boycott per se rule where re-

H79 fails, field, no League for if the one football the draft are not implement “combined” team can survive. competitors sense. The economic joint as a venture19 basically operate clubs group from the classic The draft differs product— producing an entertainment secondly, the NFL clubs boycott, No NFL club games and telecasts. football competitors to exclude not combined product agree without produce this potential competitors from their level of can joint every seeking action ments Smith was never market.20 end, clubs, only League and their team. To this with the NFL “compete” locations, no him has resulted in playing refusal to deal with determines franchise providing terms, competition schedules, decrease in but also and broadcast public. The entertainment equal clubs receive shares ensures that indeed, designed not to insulate the eco revenues. These of telecast and ticket competition, improve but to NFL from “compete” on the joint nomic venturers enhancing product by entertainment sure, field, here well to be but playing equality.21 teams' if the entertainment cooperation essential high quality: differences, product is to attain a we conclude In view of these “competitively will are balanced” properly the teams player draft cannot the NFL high at a spectator boycott interest be maintained least group as a described —at short, team, boycott interested tradi pitch. type group No NFL per se business, tionally out of elicited invocation of driving another boycott” “group designation, counting-house or on the rule.22 whether NFL, 606, per exception See, g., Mackey se rule without have held 543 F.2d 619 e. v. conclusion, 801, dismissed, reaching 1976), inapplicable. (8th 434 U.S. 98 how Cir. cert. 28, (1977) “joint ever, they (noting 54 59 have vacillated between two diver S.Ct. L.Ed.2d NFL); gent paths. L. A. Sulli venture” characteristics of van, courts have adhered to the Some 15, Note, (same); supra boycotts group at 251-52 note that all traditional canon Super se, Sherman Act: Profes illegal per Bowl that the concerted concluded Laws, Sports 81 See, sional Team Anti-trust activity group boycott. not a at issue was 418, (1967); 419-21 Cf. Levin v. Sons, Harv.L.Rev. g., Joseph Seagram e. E. Inc. v. Hawai & 149, Ass’n, F.Supp. 385 152 National Basketball Ltd., Liquors, 76-79 ian Oke 416 F.2d & “joint (S.D.N.Y.1974) (noting charac venture” (9th denied, 1969), Cir. cert. NBA); v. San Francisco Seals Na teristics (1970). Other courts 24 L.Ed.2d S.Ct. Hockey League, tional activity at issue concerted have held that the “joint (C.D.Cal.1974) (noting venture” charac boycott, group two there were was a but that NHL). teristics of boycotts” types group boycotts “per se — boycotts” that the con “rule of reason —and Note, (1976). See Nebr.L.Rev. activity the second issue fell into certed Kalinowski, Ass’n, See, category. g., Anti v. Professional Golfers’ e. 11 Von Cf. Deesen denied, (9th Cir.), Regulation cert. 76.02 § 358 F.2d trust Laws and Trade 846, 72, (1966) (1978) cases). Although (citing 17 76 U.S. 87 S.Ct. L.Ed.2d these 76-11 against boycott per (refusing divergent paths se rule presumably to invoke in most will lead purpose entry destination, where tournament restrictions their coexistence to the same cases destroy competition but to foster it consistency encouraged clarity was “not of not has high competition”). by maintaining quality of analysis. light Supreme on this shed some Court Eighth boycott,” “group as the term problem Ins. v. St. Paul Fire & Marine Co. in noted, very “a broad can be used as Circuit 2923, 531, Barry, 57 L.Ed.2d U.S. 98 S.Ct. 438 activity,” divergent types label for of concerted case, (1978). In the Court held that 932 that v. National Bank- Worthen Bank & Trust Co. by companies group of insurance the refusal Americard, Inc., 119, (8th 485 125 F.2d Cir. any policyholders with certain to deal on terms denied, 918, 1417, 1973), 94 415 U.S. S.Ct. cert. 3(b) meaning “boycott” of § within the (1974), is and there in conse 39 L.Ed.2d 473 Act, McCarran-Ferguson 15 U.S.C. scope quence about “more confusion 1013(b) previous (1976). Noting its own § group boy operation per against rule se lack of uni- a marked any aspect decisions “reflectfed] in reference to cotts than term,” formity defining Sullivan, the Court decid- supra per in L. A. note se doctrine.” given “boycott” be the broad should ed meaning at When with concerted 15 229-30. confronted rejected law labor familiar from fit classic that do not refusals deal “embracing attempt it as boycott” pattern, to define “group almost defendants’ the courts 1180 believe, consistently The courts have properly

we restricted to concert law. refused attempts by competitors to ed exclude hori boycott per where, to invoke the se rule it competitors; applied, zontal should not be given peculiar an characteristics of in applied Supreme and has never been dustry, cooperation among par the need for Court, refusals that are not concerted ticipants type of necessitated some concert competitors designed to drive out but deal,24 or ed refusal where concerted goal.23 achieve some other purpose to activity manifested no exclude guided reaching competit are in We this conclusion fact worked no exclusion analogous decisions in joint-venture areas of antitrust ors.25 In view the charae- only target competi- peting those combinations which firms at one level to exclude other boycotters objects competitors. then, ought, tors as the ultimate would-be It not to 542, analyzed a concerted refusal to deal.” 438 U.S. at generic under a rule which deals (emphasis original). Although 98 S.Ct. at 2930 given at concerted efforts traders precise the Court did not delimit “the reach” of level to insulate themselves from other com- 18, term, n.18, at id. 545 98 S.Ct. at 2932 n. petition. “boycott” it held that a enough was at least broad Ass’n, Cf. Molinas v. National Basketball 190 practice to include the involved in that (S.D.N.Y.1961) (boycott perse 241 rule case, namely, agreement by an which one com- inapplicable suspension to NBA for pany competitors “induced its to refuse to deal placing league games). bets in any 544, id. terms with its customers.” Hatley 24. See v. American Horse Quarter 98 S.Ct. at 2931. Ass’n, 646, (5th 1977) 552 F.2d 652-53 Cir. “boy Given the Court’s broad definition (finding per boycott illegal group no se in asso Marine, cott” in St. Paul Fire & we assume horse, register plaintiffs ciation’s refusal purposes of this decision that the NFL draft regulation: accordance with try an indus “[i]n “boycott” although could be described as — necessarily requires above, some interde agree we noted unlike the pendence case, cooperation, per strictly agreement ment in that se rule is not among applied indiscriminately”); competitors. should not be pp.--- of 193 See U.S.App.D.C., pp. Worthen Bank & Co. Trust v. National Bank 1178-1179 of su 593 F.2d Americard, Inc., 126, 127, pra. 119, boycott, To describe the draft as a 485 F.2d 128 how ever, inquiry. (8th 1973), denied, 918, not our n.7 end The Court Cir. cert. 415 U.S. “ ‘boycotts 1417, (1974) (refusing St. Paul Fire & noted Marine that 94 473 S.Ct. 39 L.Ed.2d ” unitary phenomenon,’ 543, boycott per “product” are not a id. at 98 to invoke rule se where 2931, Areeda, quoting represented by S.Ct. P. “requires Antitrust bank credit card co Analysis (1974), operative 381 and stated relationships among issue . . mem . before it was question “whether the conduct impossible ber banks” it and would boycott, involves a own). whether it bank to issue on its such card per 542, se unreasonable.” U.S. at rejecting argu S.Ct. at 2930. defendants’ See, Tours, g., e. A. E. Inc. v. McQuade boycott ment that a should be defined as “limit Comm., Consolidated Air Tour Manual activity against ed to concerted . . . com 178, (5th denied, 1972), F.2d 187-88 cert. Cir. petitors boycotting group,” members 912, 409 U.S. S.Ct. 34 L.Ed.2d id. at pressed S.Ct. the Court ex (1973) (finding per boycott illegal group no se per no view as to se whether “a offense operator in airlines’ refusal to list tour where defined, Id. this area” should be so at 542 operator competitor tour was not of airlines n.14, Although & 98 S.Ct. at 2930 & n.14. and there was no intent to exclude him from boycott analysis by suggest Court has clarified market); Bridge Corp. of America v. American ing judicial investigations pursue should Bridge League, Contract 428 F.2d 1370- above, path open the second left described (9th 1970), denied, Cir. cert. question the boycotts us confronts here: whether (1971) per (finding S.Ct. 28 L.Ed.2d 220 no designed competitors to exclude illegal boycott group se ACBL’s refusal illegal per se. sanction local tournament where there was no Sullivan, supra purpose Joseph 23. A. competition); L. note 15 at id. 232. See to exclude E. Sons, at Seagram 231-32: & Inc. v. Hawaiian Oke & Li Ltd., quors, 71, Suppose (9th 1969), profes- group 416 F.2d 76-79 . . . that a Cir. denied, 752, 1062, any agreed cert. 24 sional football teams 396 U.S. 90 S.Ct. not to hire player (1970) (finding per illegal gambled games. 755 found to have L.Ed.2d group no se on boycott But, agreement This is a refusal where distillers’ deal. concerted purposes may whatever the thought terminate distributor manifested no anticom petitive effects be, NCAA, intent); arrangement it is a concerted Jones v. 392 very 295, boycott. (D.Mass.1975) typical (finding per different It from the 304 no se ille group boycott rule); gal eligibility does not constitute concerted action corn- in NCAA

1181 manifestly anti-competitive,”30 the Court football indus- teristics of Arnold, which & Co.31 concerted activi- overruled Schwinn try purpose illegal restraints here, support conclu- held certain vertical these decisions our had ty noted per not a that the NFL The Court sion that se. Continental pos per question illegal which is se. vertical group boycott restrictions “redeeming virtues” in their stimula sessed group boycott, or the draft is a Whether competition; tion of inter-brand not, type it is clearly think we “widely used in our free were restrictions rule is meant to per to which se restraint and that there existed economy”; market shortcut; judicial apply. se rule is a perA judicial scholarly authority “substantial represents judgment considered utility.”32 economic For supporting their courts, experience with after considerable reasons, held that re these the Court restraint, that type of the rule particular analyzed were to be straints issue analysis normal mode of reason—the —can rule, the rule per but under under se Supreme dispensed Court with. As reason. Railway explained in Northern Pacific Co. States,26 agree “there are certain v. United similar we reach same For reasons because of their practices ments or NFL player The we conclusion here. and lack of pernicious competition effect on think, satisfy quite clearly fails “de- conclusively pre redeeming virtue are manding Pacific standards” Northern and therefore sumed to be unreasonable Railway. Given that the draft’s restrictive inquiry illegal elaborate without limited, we would hesi- temporally effect is they caused the busi precise harm impact market tate describe A will not ness excuse for use.” court “pernicious.” players’ More services indulge presumption conclusive that the say cannot importantly, we always se lightly. per Invocation of a rule stifling competi- purpose except “no reasonable, pro-competitive risks sweeping “any redeeming without tion” or it is condemnation, general activity within sys- selection form of virtue.” Some only it can a court will run this risk when regulate thereby tem serve to strength unambiguous experie say, on the would other- competition what promote nce,27 challenged action is bidding market for the be a chaotic wise purpose of trade with no “naked ] restraint[ Redskins, players. The college services of except stifling competition.”28 moreover, evidence presented considerable designed pre- at trial the draft emphasized the “de Supreme Court serve, made some contribution and that it Pacific manding standards” of Northern equality among V., preserving, playing-field Inc. Term in T. Railway last Continental various attendant ben- the NFL-teams with Reiterating that Sylvania v. GTE Inc.29 draft, finally, the vertical like efits. “[p]er illegality appropriate rules of se T.V., challenged restraints Continental when relate to conduct Topco Serv., (1963), quoted v. Asso College v. in United States Athletic Inc. Placement Inc., 596, 1126, ciates, 608, 60,117 NCAA, (D.N.J.), 31 U.S. 92 S.Ct. 405 ¶ 1975-1 Trade Cas. (3d (1972). opinion, 515 aff’d 506 F.2d 1050 Cir. L.Ed.2d without 1974) (same). 2549, 36, 50, 53 L.Ed.2d 29. 433 U.S. 97 S.Ct. 514, 1, 5, 78 2 L.Ed.2d 26. U.S. S.Ct. 356 (1977), quoting 356 78 S.Ct. 514. 568 U.S. added). (1958) (emphasis 545 (emphasis 49-50, 97 S.Ct. at 2558 Id. States, 372 Motor v. United See White Co. added). 253, 263, U.S. S.Ct. L.Ed.2d Co., (1963); Kresge v. 544 F.2d Evans S. S. Co., Arnold, & 31. United Schwinn States v. (3d 1976). Cir. (1967). L.Ed.2d U.S. S.Ct. States, Motor White Co. v. United 57-58, 253, 263, 696, 702, 2562. 738 U.S. 97 S.Ct. 83 S.Ct. 9 32. 433 L.Ed.2d 1182

“widely ity player professional used” in our restrictions and has economy33 support both sports governed should the rule of be judicial34 scholarly35 its economic usefulness. nearly point, reason. In the case most declined, Eighth recently Circuit say, course, This is not to ours, per apply reasons akin to se in any one of its incarnations approach to the NFL’s Rozelle rule.39 violate the antitrust laws. It is to say fully appreciate While we experi courts have had too little administra restraint, rubric, type per ence know tive convenience of a se ease too little of the “economic and business application alone cannot suffice to recom confidently stuff” from which law, elsewhere, mend it.40 In antitrust issues,36 illegal undertaking declare it without the we warning must heed Justice Cardozo’s analysis enjoined by the rule of reason. tags tyranny beware “the and tickets.”41 anticompetitive When effects are shown to Our conclusion that the legality of the particular player result from a governed NFL draft selection per should se parallels system “they adequately rule policed conclusion of most can un 37 38 42 courts legal- commentators that the der the rule of reason.” system, (per inapplicable professional 33. Some form of selection se rule base “draft,” profession major system) (dictum). Hatley is used in each of the ball reserve Cf. v. e., sports (i. sports Ass’n, 646, al that have amassed American Horse 552 F.2d Quarter greatest spectator following through (5th 1977) (per inapplicable nation 652-53 Cir. se rule broadcasts). racing wide television registration rule); Bridge The draft has to Corp. association employed professional been football since Bridge v. America American Contract professional 1365, 1935. A draft is League, used (9th 1970), basketball 428 F.2d 1369 Cir. (see, g., NBA, 867, F.Supp. denied, 940, e. 940, Robertson v. 389 cert. 401 U.S. 91 S.Ct. 28 874, (S.D.N.Y.1975)) (1971) 891-93 (per and in inapplicable L.Ed.2d 220 se rule hockey (see, g., Philadelphia Hockey e. World tournament); ACBL refusal to sanction local Hockey Club, Philadelphia F.Supp. v. Club College Serv., 351 Athletic Placement Inc. v. 462, (E.D.Pa.1972)). years many NCAA, 477-78 60,117 After (D.N.J.), 1975-1 Trade ¶ Cas. system,” pro of exclusive reliance on (3d its “farm opinion, aff'd without 506 F.2d 1050 Cir. adopted 1974) fessional baseball (per draft in 1965 be inapplicable se rule to NCAA system leading competi cause the farm eligibility rule). Note, supra tive imbalance. See note 19 at 422-23. 15, Sullivan, 231-32, supra 38. See L. A. note n.5; Note, Albany 154, 255 41 L.Rev. 159-60 (1977); NBA, 867, F.Supp. 34. See Robertson v. 389 892 (1977); Note, 336, 9 Conn.L.Rev. 342 (S.D.N.Y.1975), and cited cases in note 37 infra. Note, 335, Note, (1976); 55 Nebr.L.Rev. 344-47 632, Marq.L.Rev. Note, (1976); 59 638 The Le- Note, supra 419-22, 35. See note 19 at au- gality of the Rozelle Rule and Related Practices thorities cited in note 38 infra. League, in the National Football 4 Ford.Urb. 581, (1976); Note, Player L.J. 586-88 Control States, 36. White Motor Co. v. United 372 U.S. Sports, Mechanisms in Professional 34 U.Pitt.L. 253, 263, 696, (1963). 83 S.Ct. 9 L.Ed.2d 738 645, (1973). Rev. 651-53 Mackey NFL, 606, 37. See v. 543 F.2d 618-20 NFL, 606, (8th Mackey (8th 1976), dismissed, 801, v. 543 F.2d Cir. 618-20 cert. 434 U.S. 98 dismissed, 28, 1976), 801, (1977) (per Cir. cert. 434 S.Ct. 54 U.S. 98 L.Ed.2d 59 se rule 28, (1977). inapplicable rule); S.Ct. supra. 54 L.Ed.2d 59 note See 6 NFL Rozelle Deesen v. Ass’n, (9th Professional Golfers’ Cir.), 358 F.2d 165 denied, 846, 72, cert. 385 U.S. 87 S.Ct. 17 V., (1966) (rule Sylvania, applicable L.Ed.2d 76 See Continental T. Inc. GTE of reason v. Inc., 36, n.16, entry 2549, restrictions); Kapp PGA 433 U.S. 50 tournament 97 S.Ct. v. 53 NFL, 73, (1977); Hatley F.Supp. (N.D.Cal.1974) (per se 390 L.Ed.2d 81 568 v. American Quar- Ass’n, 646, inapplicable (5th rule rule), ter Horse 552 to NFL draft and F.2d 653 Rozelle Cir. 1977). part appeal part aff’d in dismissed in moot, (9th 1978); 586 F.2d 644 Cir. Philadel phia Cardozo, Hockey Philadelphia Holmes, World Club v. Hock Mr. Justice Harv.L. Club, ey 462, F.Supp. (E.D.Pa.1972) (1931). Rev. (per inapplicable se rule to NHL reserve clause); Kuhn, V., Inc., Sylvania Flood v. 275- 42. Continental T. Inc. v. GTE (S.D.N.Y.1970), grounds, 2549, 2563, aff’d on other 97 S.Ct. 53 L.Ed.2d (1972) (1977). U.S. 92 S.Ct. 32 L.Ed.2d 728

1183 outweigh the latter.44 A restraint is mer of B. Rule Reason if the “net effect” of unreasonable it has reason, of a restraint Under the rule competition.45 substantially impeding it to determine whether must evaluated anticompetitive purpose significantly is undertaking analysis the man After evaluation, making this or effect. reason, District by dated the of the rule required analyze generally court will be the NFL as it Court concluded that business, his peculiar “the facts severely anticompeti in 1968 existed had restraint, why and the tory of reasons serv impact players’ on market tive If, imposed.”43 analysis, on the re ices, beyond the level of it went legitimate business straint found to necessary reasonably to accom restraint pro purposes whose realization serves to purposes plish legitimate whatever business competition, “anticompetitive mote it. We have no basis might be asserted for challenged practice must be evils” findings disturbing the District Court’s carefully against “procompeti its balanced fact;46 legal analysis and while our dif- whether the for- tive virtues” to ascertain Society Engineers preponderance testimony the factual 43. National of Professional 692, States, 679, supports v. United 435 U.S. 98 S.Ct. record evidence conclusion that the 1355, 1365, (1978). key college player 55 L.Ed.2d 637 draft was the factor which produced competitive balance of the teams Handler, Changing Trends in Antitrust Doc- showing . . There was no to the con- Unprecedented Supreme trines: An Court 2,000 trary page op. in the record.” at Dis. 1977, 979, (1977). 983 77 Colum.L.Rev. Term — See Continental T. - -, at--, U.S.App.D.C., of 193 1198- V., Sylvania, Inc. v. GTE of 593 F.2d. 1199 Inc., 36, 49, 2549, 2557, 433 97 S.Ct. 53 U.S. First, theory we believe that NFL’s (1977), citing Chicago L.Ed.2d 568 Bd. of Trade balance, competitive empirically even were it States, 231, 238, United 246 U.S. 38 S.Ct. v. valid, legally the mark a rule of wide of 242, (under (1918) 62 rule of L.Ed. 683 inquiry, pp.---of see reason 193 U.S. reason, weighs all of the cir- “the factfinder App.D.C. F.2d, 1185-1189 of 593 infra. More- deciding cumstances of a case whether over, showing there was a which record practice prohibited restrictive posing as im- should findings contradicts of the dissent as our competi- an unreasonable restraint on colleague n.16, tion”). (in himself realizes: “The court conclud- Cf. id. at 50 at 2558 S.Ct. ed that the evidence whether draft was determining particular whether a commercial se, prohibited best practice per essential balance was ‘at should be “[t]he equivocal,’ probability anticompetitive consequences and that no correlation was demon- severity practice will result strated between the draft and survival of the League.” [the] consequences op. U.S.App.D.C., those of against must be balanced Dis. of 193 at- pro-competitive consequences”). at 1211 of 593 F.2d. finding by suggest fact trial We Sullivan, supra 45. L. A. note 15 at court, colleague, must be as recited our Society Engineers See National of Professional affirmed there is evidence the record States, v. United 98 S.Ct. it, appellate support cannot that an court Chicago quoting Bd. of Trade v. United fact, finding particularly a different make States, 244, (“The U.S. at S.Ct. at obviously itself when record evidence lends legality test restraint true whether to the conclusion reached the trial court. merely per- imposed regulates is such as Hadley Hospital, Daniels v. See Memorial competition haps thereby promotes or whether 84, 91, (1977). App.D.C. U.S. F.2d destroy may suppress it is such or even First, theory extent the defendant’s competition.”) device to relies on the draft as a allocate evenly, wealthy owners talent without colleague’s 46. The is devot- bulk of our dissent market, Judge free would be to corner analysis ed to a relating facts recitation and of detailed convincing testimony” Bryant football, found “abundant history professional money deci- that factors are often other than some before district court record players’ teams. 420 supplemental sive choice of 49 infra. some thereto. See note (unrelated See business findings at 746. J.A. at 945 colleague Our then makes his own (same); opportunities); id. at 1049-52 id. as to in 1968 and fact the benefits derived (racial general currently 1073-74 discrimination from the community (pref- atmosphere); findings competition, id. at 1080-84 and its effect on these AFL); 1091-92 differing for NFL id. at For erence over fact from those of the trial court. owner); (climate); [competitive (dispute id. example, argue id. at 1112 that this “[s]ome factors, (educational opportunities); id. at but has been caused balance] Court, Supreme agree with slightly judge, fers from of the from the we the that trial having intervening guidance benefited from Court’s conclusion that the NFL District 655). (disagreement coaching 1214-15 with and revenues. We at oral staff Id. at were told Further, management). argument by the evidence with re counsel for the NFL such that gard agents represent average to the movement free for and revenues now over half of League mer ungoverned by Football were World who team income. If realizes that at the one any did the draft not reveal present league time all in the receive teams will players to trend for the best become concen exactly more than one half equal their revenues in “offering money, glamour trated with teams television, nearly every and shares from 746, F.Supp. citing and Agents’ Post, Free success.” league in team the is able to sell out its stadium Move, Washington First Wave On the league games, appears the for all then 1976, July at D1. player competitive the financial sinews for a Second, it is doubtful whether was the draft equalized. balance have at 1978 been See J.A. maintaining competitive in effective whatever (testimony George Burman). of Dr. League. Although balance did exist in the from producing competitive The second factor bal- year year usually got the worst some- teams (or it) impact lack ance is the the coach what better and the best worse, teams somewhat Despite on success or failure of the the team. much, any, it is uncertain how of this “competitive the claims to balance” from what- explained by 939-40, is the draft. See J.A. at factors, ever it is clear that a small number of (testimony Burman); George Dr. play-offs year the teams have dominated the (testimony Caputo). id. at 1968-69 of Bruce year. after The record shows teams as nine by any going Without means into the minute occupying twenty-two out of the available by detail furnished with such relish col- our twenty-four places play-offs in the 1973- in the league, we think that two factors contrib- citing 1975 seasons. See 420 player ute at least as much as draft Times, N.Y. nine June at 56. These producing maintaining and bal- long teams of suc- include teams with records league ance in the revenues —television year year (1) cess after with the same coach: coaching changes. Cowboys Landry; (2) Washington Dallas with player originated The draft in 1935 and was Allen; (3) Redskins with Lombardi Minne- on, in full effect from then but none of Grant; Vikings (4) sota with Oakland Raiders development professional wonderful Madden; (5) Shula; Dolphins with Miami with game pointed appellant, (6) Pittsburgh with Steelers Noll. These teams colleague, encored our occurred until the consistently play-offs in have been and won professional mid-1950’s. The foot- advent titles, despite the fact that under the draft synergistic ball on television effect created getting picks year have been year. the worst after sport. between television and the Television appear It would that the of fine effects fans, exposure brought produced more more coaching swamp whatever effect the draft revenues, produced paid which in turn better performance. have on team players, franchises, profitable gener- more Analysis coaching changes, of the record of ally a better entertainment feature for televi- changes, or lack of illustrates at least two sion. This sort of effect work- ratchet started First, things. player ing draft does not in the mid-1950’s advent of televi- equalizing an have knocking effect years. the extent of sion and has over continued See teams, top top Proceedings, out the if the on the Conference Economics Second, good certainly Sports, Washington, D.C., May have guable coaches. it is ar- Professional happens change posi- J.A. what at 290. league possible say It tion of teams in advantage, is in is not a draft choice the 1935-1955 period player importance losing but that draft had some in teams fire the preserving losing competitive balance, pre- a kind of coaches. venting running away colleague only argues rich owners from Our one of twelve “[i]n (if league independently there were seasons from did in the 1964-1975 those teams only standings rich owners of the then nine bottom half of the NFL’s to win a fail teams). now, greater games following football pact But as the im- number of in the next clearly priority draft is different from selections in the draft. Statistical anal- arguably ysis

what it had been 1935-1955. shows that this could not have been the great equalizing regard product occurring feature now is not of chance without (Dis. league’s arrangement 45). dissenting op. but the the draft.” note Our place financially equal nearly colleague many the teams did not tell us how of the teams footing equal sharing standings of television revenues. bottom half of the — nearly selection, priority In 1968 each team in NFL received received the usual draft losing one third of its revenues from also fired television but coaches. Whatever radio, averaging analysis colleague talking $1.13 million. See J.A. at statistical about, our (In 1974, year figures obviously the most recent it is it takes worthless unless record, appear averaged changes such revenues account the head coaches percent coaching $2.28 million and total were 34.5 staffs well. described, purpose being its vent as it existed in 1968 constituted draft terms, anticompetitive, sup objective trade. unreasonable restraint telos, very pressing competition, challenged here that has been essence of the restraint. in its undeniably anticompetitive both likewise correct judge The trial and in effect. The defendants purpose significantly finding com the draft conceded that the “restricts anticompetitive in its effect. The draft among clubs the serv the NFL for petition and, inescapably in forces each seller of football college players” graduating of ices one, designed with and one deed, the “is to limit services deal that seller, monop in robbing any re as ‘purposive’ buyer, be a the competition” and “to market, any bargaining real market.47 sonistic of player-service on the straint” draft, The the assertedly was de as District Court power.48 The fact that the draft found, “leaves whatever for com playing-field the teams’ no room signed promote for of profit petition among inflate their the services equality rather than to the utterly strips them may purpose college players, the draft’s and margins prevent terms, described, subjective marketing over being in measure of control the predictable effect pre their talents.”49 The nefarious. this fact does not as But colleague changes position league 49. 420 at 746. Our has rein- effected The in changes easily encyclopedic knowledge is seen from head coaches his own of foot- forced happened the arrival repeated the record after what NFL’s Offi- ball with references The Bay, Lom- Lombardi in the arrival of Green Encyclopedia History of Foot- cial Professional Washington, the Allen at bardi and thereafter (1977), beginning with note 3. Whatever ball Dolphins, and the move of Shula to the Miami taking propriety the of a trial court Pittsburgh See of Noll Steelers. move judicial “encyclopedia” to establish notice of an 658-76; 950-52, (testimo- 1978-79 J.A. ny id. (and encyclopedia an facts whose occasional (testi- Burman); George id. of Dr. at 904—05 corrects, inaccuracy colleague our himself note (testi- Garvey); mony id. at of Edward 1116-18 23), see McCormick’s Handbook of the Law mony Starr). four of Bart In each of these (2d ed.), (1972) it Evidence we think §§ 329-31 long losing instances series teams with ground opinion improper and a bit unfair to seasons, they during had had the benefit urging principal trial reversal of the court’s draft, shortly very priority were (that factual the evidence conclusions upgraded into arrival title contenders after the equivocal whether the draft was essential ability. recognized high these coaches of balance, competitive preserve that and eminently think cor- We the trial court was impact) anticompetitive severely on draft had a when he rect “concluded the evidence year appearing a “facts” culled from a book whether the draft was essential to suggest the after the trial decision. We court’s equivocal,’ that no balance ‘at best and bases, validity, legal factual therefore correlation was demonstrated between similarly reliance on the dissent flawed league.” and survival in the 23) personal (note common observation Brief of NFL at 9. 69). (notes knowledge community college play- argue Defendants Indeed, frequent there are references bargaining possess significant amount of ers power, occurring argument after the oral in this events case, sign since can refuse 29), g., (p. Simpson’s e. O. J. 1978 record them, electing instead to sit drafted (note Terry Metcalfs 1978 Canadian contract play several or to for the Canadian out seasons (p. 69), New Yankees’ success York recent alternative, League. The first how- Football ever, 53). popular One man’s reminiscences of a both a considerable financial necessitates judicial sport should not be confused with a interruption potentially and a sacrifice harmful decision. player’s of a career. The second alternative Bryant’s Judge principal If factual conclusion better: established that the little the evidence aside, urges, colleague be set our is to opportunities in Canada for American clearly ground must be on it was hiring preference (owing to a are both limited erroneous, Hadley Memorial see Daniels v. players) significantly less re- for native 84, 91, U.S.App.D.C. Hospital, 566 F.2d salaries, warding (lower promotional op- fewer and, surely, clearly (1977), erroneous portunities, “glamor”). evidence less him, v. Ameri- on the record see Garcia before finding plainly supported District Court’s 1970) (5th Corp., Cir. can Marine (per 432 F.2d availability failed that the of these alternatives Surety curiam); Fidelity & Summit U. S. v. much, bargain- any, to furnish a ing power Wright Co., 1969); (6th C. F.2d Cir. salary the draft- discussions with Miller, and A. Practice and Procedure Federal ing club. upheld outweigh and be if the latter the evidence established the former. found, was as the District Court to lower terms, In strict economic the draft’s demon- salary college players. levels of best procompetitive strated effects are nil. There can be no doubt the effect of justification The defendants’ for draft as it “suppress existed 1968 was to draft reduces fine to an assertion that destroy competition” even in the mar competition entering in the market players’ ket for services. players’ services would not serve the best justification asserted for the draft is clubs, public, interests of the or the legitimate that it has the purpose business precisely themselves. This “competitive of promoting balance” type argument Supreme that the Court among teams, playing-field equality only recently unavailing. has declared to be producing better entertainment Society Engi National of Professional public, higher players, salaries for the States,51 neers v. United Court held that security increased financial for the clubs. professional society’s competitive on ban The has NFL endeavored to summarize this bidding 1 justification by violated of Sherman Act. saying § that the ulti- draft effect, rejected mately “procompetitive” yet holding so Court a defense this shorthand entails no small risk of con- competitive bidding that unbridled “procompetitive,” fusion. The draft is to deceptively lead low bids and inferior all, very in a different sense from consequent “with public safety work risk to anticompetitive. which it is The is health,”52 terming justification and anticompetitive in its on the effect market “nothing less than a frontal on assault services, players’ for virtually it because policy basic End Sherman Act.”53 eliminates competition among economic ing uncertainty proper decades of as to the buyers for services of sellers. The draft scope inquiry reason, of under the rule of is allegedly “procompetitive” in its on effect categorically rule, the Court stated that the field; the playing but the NFL teams are name, contrary open to its “does not competitors not economic the playing on argument inquiry any field antitrust to field, may while it heighten in favor challenged of a restraint that competition athletic improve and thus 54 reason,” fall within the realm of and that product entertainment offered to pub- inquiry instead must be “confined to a lic, does not competition increase in the consideration impact on [the restraint’s] economic sense encouraging others to competitive purpose conditions.”55 The enter the product market to offer the concluded, antitrust analysis, the Court “is at lower cost. Because the draft’s “anti- judgment to form a the competitive about competitive” “procompetitive” effects restraint; significance of the it not to comparable, are not it impossible “net policy favoring competi decide whether a them out” in the usual rule-of-reason bal- public interest, is in tion ancing. evils,” “anticompetitive draft’s words, in other interest of against industry. cannot be balanced the members an virtues,” its “procompetitive Subject statute, the draft exceptions defined by (1971), 693, 1355, (foot- § 2577 n.94 without the wholesale 435 52. U.S. at 98 S.Ct. at 1366 importation judicially omitted). of “facts” noticed for the note Davis, appeal. system first time on See A Judicial Notice Based on Fairness and Conve- 695, 53. Id. at 98 S.Ct. at 1367. nience, Perspectives (Bound 94 Law ed. 1964); Landy Deposit cf. v. Federal Insurance 688, 54. Id. at 98 S.Ct. at 1363. Corp., (3rd 1973). 486 F.2d 150-51 Cir. Chicago States, 50. Bd. of Trade added; v. United 246 (emphasis Id. at 98 S.Ct. at 1364 U.S. at 38 S.Ct. omitted). footnote U.S. S.Ct. 55 L.Ed.2d (U.S. April 1978), aff'g U.S.App.D.C. (1977). 555 F.2d 978 clubs, of the NFL we do not foreclose status has been made Con policy decision possibility type some gress.” system might be defended serv selection must, Confining inquiry, our as we regulate promote “to ing conditions, competitive on we impact draft’s players’ competition” in the market it in 1968 conclude that the draft as existed here, are services.60 But we faced 'the restraint of trade. was unreasonable Supreme Court was faced in Professional concededly anticompetitive was ato “total Engineers, with what amounts severely anticompetitive purpose. It competition,61 agree ban” on and we with It was not shown effect. District this level re Court offsetting procompetitive impact significant justified. judge cannot be The trial straint Balancing economic sense. concluded, exaggeration, pardonable anticompetitive against pro- draft’s evils system that the draft issue “abso virtues, plain. the outcome is imaginab lutely the most restrictive one defenses, premised The NFL’s the asser though justi le.”62 Even the draft was competition players’ tion that services primarily by disperse fied need industry would harm both the football players, applied all graduating best society, nothing there is unavailing; seniors, including average players who balance, procompetitive virtue because were, sense, fungible commodities. It support “the Reason Rule of does permitted college players negotiate assumption on the that com defense based one not con team. If a could petition itself unreasonable.” team, play tract with he could recognize, analogy We on with the Su all. preme reasoning in Goldfarb58 and Court’s intimating Without view as to the Engineers, Professional that legality following procedures, we “may significantly football differ from oth services, and, significantly less [that], note that there exist anti- accordingly er business system player competitive alternatives the draft competition”59 the nature of for challenged The may vary talent an absolute “free which has been here. trial joint-venture supported found judge market” norm. Given that evidence omitted). permitted bargaining (footnote competition, 56. Id. since it be- following player tween the club and 696, 57. Id 98 at 1368. S.Ct. player’s See note 47 selection draft. supra. parallel again Yet with the here Bar, 773, Virginia 58. Goldfarb v. State 421 U.S. argument Engi- and decision Professional n.17, 2004, 2013, 788-89 95 L.Ed.2d S.Ct. 44 Society argued telling. “that com- neers is The (1975): 572 bargaining petition, between the the form of operates upon fact that a restraint a The customer, engineer and allowed under profession distinguished as from a business engineer of has been canon ethics once is, course, determining of relevant whether initially It then contends selected. ... particular restraint violates the Sherman bidding prohibition regu- that its Act. be It would unrealistic to view timing competition, mak- lates thus practice professions interchangeable ing Chicago analagous this case Board of activities, with other business and automati- Trade . The found this cally . .” Court re- apply professions antitrust misplaced, Chicago liance Board of Trade concepts originated which in other areas. mistakenly pointing “petitioner’s out aspect, claim public The service features negotiation single may require seller and a profession, particu- treats between a that a buyer competition single equivalent practice, properly as the lar be viewed could potential two more sellers”. Id. at as a of the Sherman Act in another between violation context, differently. n.19, player be treated 98 1366. 693 S.Ct. at noncompetitive produced much draft a more 696, 435 59. U.S. at 98 S.Ct. 1367. respective negotiating posi- imbalance Chicago single posi- 60. Id. Bd. of Trade v. United players See than the team tions States, 238, 242, quoted in Engineers. U.S. at 38 S.Ct. 246 parties tions of the in Professional supra. note 45 F.Supp. 420 at 746. Red- 61. 435 1355. The U.S. at 98 S.Ct. skins did not eliminate contend the draft 1188 for the NFL to viability system eliminate the player a selection permit entirely employ revenue-sharing

that would “more than one team to draft equalize player, restricting draft while teams’ financial re each “competi players any preserving sources —a method of might number one team nicely harmony A tive with sign.”63 anticompetitive less balance” might draft league’s self-proclaimed “joint-venture” permit college player negotiate a with status.67 the team of his choice make accepta

drafted him failed to him an required design We are not in this case ble offer.64 The NFL could conduct also pass draft that would muster under the year second draft each who laws. suggest, antitrust We would how- agreement were unable to reach ever, Supreme that under the Court’s deci- team that selected them the first time.65 Engineers, sion in Professional no draft can obviously, perhaps, Most the District Court justified merely by showing that it is a supported found that the evidence feasi anticompetitive less relatively means of at- bility of draft that would run for fewer taining sundry benefits the football in- rounds, applying only to the Rather, most talented dustry society. player “average” enabling breth scrutiny can survive under rule rea- negotiate ren to “free posi- market”66 The son only if is demonstrated to have all, course, tive, least economically restrictive alternative of procompetitive benefits Note, supra Id. at 747. 19 See note at 425 workable alternative more restrictive (in sports order for draft to be a reasonable drafts used in other and thus should be restraint, opportunity “at required least a minimal sports”). in all deal with more than one team should be as- sured”). Note, F.Supp. 66. 420 See 55 746-47. Nebr. (1976) (arguing L.Rev. 353 NFL NFL, Kapp (N.D. v. 390 See would be “reasonable” if it lasted for five 1974) (suggesting Cal. that NFL draft is unrea NFL, 17). Mackey rounds instead of Cf. v. boycott permits sonable because it (8th dismissed, 1976), F.2d Cir. cert. drafting “even when the club refuses or fails (1977) S.Ct. L.Ed.2d within a reasonable time to reach a contract” (holding “unreasonable,” alia, Rozelle rule inter him), part appeal aff’d in dismissed in applied just players, because it to better part moot, (9th 1978). F.2d Cir. every player regardless but “to NFL of his adopted system NBA has a selection under Note, ability”); Legality status or The any negotiate which a is free to in the Na drafting Rozelle Rule and Related Practices team if the team fails within a stated 581, League, containing specified time tional Football 4 Ford.Urb.L.J. to tender a contract (1976) (arguing that Rozelle rule would minimum terms. v. 589-90 See Robertson National Ass’n, 682, (2d “average” apply Basketball F.2d & n.5 be if to 556 686 “reasonable” it did not 1977), aff’g players). Players’ Cir. 72 F.R.D. 69-70 & n.1 Association The NFL and its (S.D.N.Y.1976) settlement). (approving recently adopted The have less restrictive Players’ NFL and its adopted players by continuing Association have likewise which “extends to fewer NFL, a less restrictive draft under which for fewer rounds.” Alexander v. No. 4- selecting perpetual “the club not obtain a (D.Minn. July 1977), slip op. does 76-Civil 123 at right negotiation players” with the case). (approving Mackey settlement of See “players acceptable who are to unable come to supra. note 6 selecting contract terms with club them can suggests The that NFL a draft of fewer agents periods free after become limited helped plaintiff, rounds would not have who NFL, time.” Alexander v. No. 4-76-Civil 123 was a first-round draft in choice 1968. See (D.Minn. 1977), July slip op. (approv at 27 Brief of NFL at 50. Yet if the teams were Mackey ing case). See settlement note 6 compete average forced to for services supra. probable players’ it that those sala- rise, lifting ries would thus the “floor” which Note, (1976) 65. See 55 Nebr.L.Rev. compensation players, for the most talented (arguing that NFL draft would be “reasonable” subject draft, sessions, to abbreviated have to would if conducted two who begin. A “free sign market” for the becoming fail agents” services of after second session “free short, players, Note, pushed thereafter); supra most would have 19 at note salary players up. (arguing levels of all that baseball which allows an- “redrafted” Note, 67. See 9 Conn.L.Rev. 344-45 & n.55 sign if club the first club him fails to (1977). time, given proven within “has to be a itself or, no effects, first-round draft choice and defensive anticompetitive offset that history in NFL or veteran— back least, accomplish if it is demonstrated —rookie advantageous negotiated had ever such have a purposes and to business legitimate terms. that insubstant anticompetitive effect net draft as it existed Because the NFL computation damages ial.68 in antitrust The anticompetitive effects invariably a certain Alice-in-Won in 1968 had severe cases has quality Supreme it. As the vir derland proeompetitive and no demonstrated observed, “damage issues in these Court re tues, unreasonably it we that hold of the kind of rarely susceptible cases are in violation of strained trade § concrete, injury which is proof detailed Act. Sherman Detailed available in other contexts.”71 difficult here: proof injury is particularly Damages C. continuously existed because the draft has plaintiff found that The trial court (as there there has never existed since negotiated have a more remunera exists, price-fixing usually example, for the draft as it existed tive contract but for cases) players’ a “free market” services (before damages his estimated might guide prices as a that serve $92,200 difference be trebling) —the anti prevailed would have absent the compensation and plaintiff’s actual tween In view of such difficul violation.72 trust in a brought his “services would what ascertainment, per the fact-finder ties urges that market.”69 Plaintiff free just and esti mitted to make “a reasonable princi was He contends too low. estimate damage based on relevant mate of to include was error pally data,” “probable include $19,800 after paid he was subtrahend the positive as direct and inferential well allegedly are injury, thing since the Redskins “The proof.”73 his essential is that against pend ways this sum his data seeking offset available be used in rational damage De which warrant confidence compensation claim.70 ing workmen’s fact, is, figure reached reasonable was too urge fendants the estimate estimate, specula than imprecise rather Fischer, an They that Pat high. contend guess.” tive all-pro, twice eight-year veteran and plaintiff, untried comparable Making full deference allowance “rookie”; hypoth trial fact, and that the court’s we the trier of that must accorded “fully guaranteed” examining con three-year esis of a the record have concluded after over- damage his calculation must be speculative, since no Redskins’ tract Engi- Supreme thereof out of reimbursed the amounts Professional Court neers, however, compensation. suggested norms award that ethical damage arguments higher competition, for a designed regulate Plaintiffs other award, market- here, product safety, ing relating which need not be detailed can be to restraints frivolous, rejected by properly anticompetitive the justified were no “have n.22, District Court. 1355 435 U.S. at 696 98 S.Ct. effect.” 699, (emphasis added). 1355 id. at 98 S.Ct. See Research, Corp. Zenith Radio v. Hazeltine 71. (Blackmun, J., concurring). 1576, 123, 1562, Inc., 100, 23 395 U.S. 89 S.Ct. (1969). 129 L.Ed.2d F.Supp. 420 749. 69. NFL, No. 123 Alexander v. 4-76-Civil 72. See Player Paragraph 12 of the Standard Con- (approv- 70. (D.Minn. July 1977), slip op. at 29 18 pro- signed by and the Redskins case). tract Smith ing Mackey settlement of vides: 251, Inc., Pictures, Bigelow Play- 327 U.S. 73. v. Any payments RKO the made hereunder (1946), quoting 574, er, 66 S.Ct. period during 90 L.Ed. is entitled for a which he Story by Paterson Parchment Parchment v. compensation reason Co. benefits workmen’s 561-64, Co., total, Paper tempo- 51 S.Ct. total, U.S. temporary permanent of (1931). disability partial 75 L.Ed. 544 rary partial, permanent or payment of be an advance shall deemed (foot- Sullivan, supra compensation the note at 787 due L. A. benefits workmen’s omitted). Player, be note shall be entitled and the Club $19,800 years the disputed “bidding turned. Inclusion of the in of NFL-AFL war”— we compensation,” “actual think But clearly Smith’s was not erroneous.76 there was comparison clearly proper;75 was the simply support judge’s no evidence to the Fischer, produced Smith, it a hypo draft, with Pat while finding that absent the ($54,000) well in salary negotiate thetical annual ex have a been able to contract con paid of rookie taining guarantee years’ cess that defensive of three full history during in regardless back NFL salary, injury.77 of No such —even damages” obviously imposed by “actual 75. Plaintiffs were absence the restraints $19,800 by actually reduced ceived, that he re- owners. The evidence also showed players such that receipt his actual sum of this can- negotiate were able to contracts speculative ignored not be on the chance that guaranteed payment which for the term full Redskins claim be it as an allowed of the contract even if in- were yet offset to unrelated and as undetermined (“fully jured “injury pro- vested contract” liability. fact that Redskins have de- clause”). tection On the basis of evi- payment rived a from their of this benefit sum being negotiated dence of the contracts case, course, them, may prevent in this league times in the elsewhere estoppel theory, deriving some sort period, during Redskins the relevant and con- second benefit from it the workmen’s com- sidering protection that such was shown to suit; pensation question but no con- great plaintiffs be of concern to cern to here. us caliber, plain- the Court also concludes tiff would injury protection been such able include Fischer, plaintiff, 76. Pat like was defensive long-term in a contract had signed back who with Redskins illegal imposed it been not for the restraints Although player, Fischer awas it seasoned upon him. Smith, cannot said be an All-American Numerous, appear references in the record choice, demonstrably first-round was out contracts, to so-called “no-cut” which were very league. rough of Fischer’s A index of the frequently negotiated league. in the It is players’ comparability two was furnished undisputed, however, apparently that such refusal, the NFL Commissioner’s zelle Rule in a 1968 Ro guarantee salary payments, contracts did transaction, not to award Smith as injury, debilitating beyond event “compensation” to Fischer’s former team. See year injury in which the Brief F.Supp. supra. Putting occurred. See at 749 & note 6 Pro-Football, Additionally, murky question Inc. at one are to Smith’s “bonus” side how “bonuses” allocated, n.9, record contains year references several multi- see 420 one-year compensation ($28,000 player’s contracts from actual $22,000 warranty salary) plus physical and Fischer’s an “excellent Again appears condition” one-year compensation ($24,000 nualized provi- “bo was excised. that the $30,000 salary) plus apart salary payments, nus” anyway. are not too far sion does not assure judge obliged injury, The trial to find event of over the full course of the guideline hypothetical some to Smith’s period. Characterizing com contract two such pensation nearly ap contracts, under conditions more plaintiff salary stated proximating player up a free market. He came paid long player] would physically “as [the played position who a defensive similar Appellee fit.” See Brief of Smith plaintiffs agent” signed as a “free (contract Yearby); at 7a of Bill 9a id. at year. Bearing the same team the same (contract McAdams). of Carl Whether this is wrongdoer mind “the familiar rule that a is, language a sensible construction of such responsible uncertainty calculating say, interpret- needless to ed, however, us. So before damages proximately caused his own plainly contracts do wrongdoing,” Corp., v. Lehrman Gulf Oil Smith, support judge’s finding ab- denied, (5th Cir.), F.2d cert. nego- sent would have been able to (1972), 93 S.Ct. 34 L.Ed.2d 665 we years’ guaranteeing tiate contract three sal- say judge’s comparison cannot that the trial regardless ary, injury. was unreasonable. Although set we aside the trial court’s damage depends award insofar as it on a findings 77. The District Court’s on this score conjectural guarantee years’ salary, of three F.Supp. in contained 420 at 748: regardless injury, we not do intend other- unequivocally The evidence showed to wise circumscribe on remand trial top players being at that time were offered computing plaintiffs court’s discretion in teams, long-term by including contracts some damages. passing ap- We do in note with at times the Redskins. The Court concludes proval by Bryant approach Judge taken plaintiffs that a would talent cer- trial, n.9, ignor- at see 420 at 749 in tainly negotiate have been able to a three- arguable ing salary distinctions between year very contract on favorable terms in the

1191 bear, yet market would by operating Pat negotiated guarantee had been $300,- object compari- $260,000 Fischer, in 1968 and only the trial court’s income was son, ever been guarantee no such had as well as in 1969. economics 000 Sheer by Redskins’ first-round negotiated any pre- past thus have practice consistent choice, at by any defensive back assuming, vented Redskins history. evidence in NFL The rookie, time risks the financial case of untried multi-year guaranteed con- established pro- attending type of contract Smith risk, expose great financial tracts clubs poses. in consequence such guarantees and that reasons, these we conclude that For negotiated only by be veteran generally can guaran- judge’s hypothesis fully trial key in of “Hall of Fame” caliber teed, three-year contract can characteriz- was, moreover, positions. There considera- guess.” ed as a There “speculative Smith, rookies, like many evidence that ble hypothesis was no evidence on which this multi-year even was not interested founded, could be no evidence from which it contract, “up- guaranteed preferring more accordingly could be inferred. We remand money right negotiate front” recompu- this case the District Court for first-year new terms on the basis of his of damages. tation performance. part, Affirmed in part, reversed judge Nor do we think that district proceedings remanded for consistent ignore all this on the was free evidence opinion. theory that irrelevant to what would was happened “free market condi- have under MacKINNON, concurring Judge, Circuit ability to Draft or no Smith’s tions.” part dissenting part: terms negotiate such lucrative upon in a af- We are here called to rule capacity on the Redskins’ depended Redskins, upon validity under way them. The like the other backhanded ford clubs, Football presumably charging were for the antitrust laws of National NFL college player 1968 The rights approximately League’s and TV what draft.1 tickets issues,” purposes measuring ining “underlying reaf- bonus for player overall the Court Baseball, compensation. setting referring regard, In this firmed the in Federal result particular damages holding: (1) Congres- we aside a item of to four reasons for that support, respect to be no think without we intimate sional awareness of and inaction Baseball; develop- (2) view on the overall reasonableness of the to Federal baseball’s damage apart particular understanding award from the the- it was not ment on the subject laws; ory (3) existing on which it was made. federal antitrust with a reluctance to consequent Federal Baseball overrule principal Supreme on the 1. The Court decisions effect; (4) professed retroactive any sports application of laws start the antitrust by remedy supplied Con- desire that gress v. Na ed in 1922 with Federal Baseball Club U.S. rather court decision. 346 than 200, 465, League, 42 66 tional 259 U.S. S.Ct. 357, meaning 74 of Toolson S.Ct. 78. case, Holmes, (1922). L.Ed. 898 In that Justice in Unit- was discussed Justice Warren Chief Court, speaking for a ruled that the unanimous 228-30, Shubert, 222, 75 States v. 348 U.S. ed prof giving for business baseball exhibitions 277, (1955). v. S.Ct. 99 279 United States L.Ed. trade it “would be called or commerce 236, Club, Boxing 75 International 348 U.S. commonly accepted use of those words” 259, compan- (1955), 99 was a S.Ct. L.Ed. 290 league’s hence the acts “were not interfer was the same ion case Shubert and decided among the 259 ence with commerce States.” day. principles applied the devel- This case 209, years, 42 at 466. Over the U.S. S.Ct. Toolson, oped and did in Federal Baseball and subject was to intermittent antitrust baseball boxing, exemption 348 find an for antitrust attack, rejected challenges these but courts 243, U.S. 75 S.Ct. authority of Federal Flood v. the Kuhn, Baseball. 2099, League, Radovich v. National Football U.S. S.Ct. (1957), (1972). The Court asked to U.S. L.Ed.2d 456 L.Ed.2d S.Ct. damages pro Clayton ruling al- was a civil legedly Act case reconsider viding business for blacklisting plaintiff profit games not within suffered baseball scope signing with in Tool another the federal antitrust laws Yankees, league con- standard New son v. York violation (1953). of Federal exam- limited reach S.Ct. 98 L.Ed. 64 Without tract. Court 1192 draft, and

litigation was not instituted as a class ac 1968 he was under the entitled allegedly tion to benefit who were antitrust laws to treble his loss.7 by the but player victimized draft rather as court, set majority (1) In this here an obtaining compensa indirect means of aside the district court’s conclusion that injury player tion for a to a football that per 1968 draft was a se violation of the comp the court has ruled is not otherwise laws; and, (2) claiming antitrust support deny I similarly would the claim ensible.2 the very from recent decision of the Su- in this indirect effort. preme Society Court in of National Profes- The district court held that the 1968 col States, 435 Engineers sional v. United U.S. lege player by football draft3 conducted 679, (1978), S.Ct. L.Ed.2d League4 National Football amounted to a affirm the conclusion that court’s second per Act, se violation Sherman that Reason; and, the draft violated the Rule of group boycott,5 constituted a and alterna (3) finding testimony sup- that the does not tively, a violation of the Rule of Reason port the conclusion that in a free market “significantly because it was more restric negotiate Smith would been able to necessary” accomplish tive than the valid contract, three-year set aside the trial “player of league distribution needs computation court’s damages and re- . . ..”6 On the basis such [NFL] recomputation by mand for the district conclusions, finding and without any court. particular “less restrictive alternative” majority’s I concur in the conclusions and guarantee legiti the survival of the reasoning support objectives mate thereof that were attained operation college player NFL draft type draft is not the district court progressed group finding: plain boycott traditionally to its third had elicited $276,000 tiff-Smith was entitled to invocation per in dam se rule ages, $92,000 he because had received less district court should not have found the compensation than he would have received a per draft to be se violation of anti but illegal imposed for the However, restraint trust laws.8 for reasons herein- baseball, sport Baseball and held that under the affirmed antitrust laws. This court subject judgment football was the federal antitrust of the district court order laws. 352 U.S. at opinion September S.Ct. 390. That without on 1975. exempt baseball was from the antitrust laws Flood, supra, reaffirmed U.S. 3. The terms the 1968 draft have been modi- but S.Ct. the Court also stated that subsequent fied accordance with collective professional sports operating “[o]ther inter- negotiations bargaining the National between football, basketball, and, boxing, pre- League Players state — Football Association sumably, hockey golf exempt.” not so League Management —are National Football Council. 282-83, 407 U.S. at 92 S.Ct. at 2112. Justice League Properties, National Football Inc. The Justice, Douglas, capacity in his as Circuit rein- Encyclopedia History NFL’s Official Profes- injunction pendente stated a district court’s lite (hereafter “Encyc.”). (1977) sional Football 83 favor basketball “[bjasketball stated that . . . does not League 4. The National Football is hereafter re- enjoy exemption from the antitrust laws.” “League.” ferred to “NFL” or the Haywood Association, v. National Basketball Pro-Football, defendant Inc. also referred 1204, 1205, 672, 673, 91 S.Ct. as the “Redskins” or the “team.” (1971). L.Ed.2d 206 giving It is clear that the business of Inc., Pro-Football, 5. Smith v. profit exempt exhibitions is not from the (D.D.C.1976). 744-45 reach the federal antitrust laws. No case involving validity of a Id., at 745-47. sport Supreme has reached the Court. Id., previously court, 2. This case at 747-49. before this Inc., Pro-Football, 74-1958, Smith v. on No. interlocutory appeal respects, college player orders the district In some granting summary division, judgment court to defend- resembles horizontal market which is plaintiff’s negligence illegal per ants regard power law common se without to market personal injury anticompetitive claim and his claim asserted or discernible effect. United e., option-year, forth, possi with the contract with one i. a disagree majori- I after set beginning ble sala ty’s holding four-year is a violation of contract. The the draft reasoning ry neighborhood with its have been in the Rule of Reason and would $17,500 approximately percent a 10 Supreme Engi- decision in with Court’s would Assuming year; option-year increase each requires neers that conclusion. option provis subject it existed have to the usual that the draft as in 1968 been arguendo however, laws, agent, his I ions.10 was a violation of the Smith antitrust immediately. money Since majority setting with the wanted more would concur higher computation generally willing pay clubs the trial court’s of dam- are aside However, there, than for I disa- salaries for short-term contracts ages. even would theory long-term the latter en gree majority’s with the to the contracts because greater injured, damages. tails risks if proper measure agent were able to obtain Smith and his I. BACKGROUND sign a one-year and elected to contract a higher salary ($22,000 year) for than the agreement My general are with views willing to pay were for a three-to- Redskins forth in the ma the factual statements set year four with raises.11 contract annual A (Maj. Op. at--- of jority opinion briefly, “no-cut was contract” discussed but U.S.App.D.C., at F.2d). 1174-1175 of 593 seriously since, not pursued was as Graham However, many there other material are stated, provision one-year a in a con such which, facts, my view, important to a tract for a first-round draft choice would understanding implica full of the antitrust ridiculous,” as a been “kind of proper the draft tions of and of meas recognized qualifications such was damages. alleged urement of Smith's kept practically being assured of on the Sign- A. Circumstances Smith’s for the full season.12 ing with the Redskins.— There also between discussion complete understanding fully-vested a more agent To have Smith’s and Graham of contract, nothing negotiations which culminated in materialized but his one- signing player’s respect; Smith contract with the and in connection with the Redskins, contract, year it should be noted Otto Gra there was no discussion of ham, injuries.13 agent, general compensation who was man head coach however, take out ager of the Redskins between 1965 and did advise Smith to 1968,9 protect insurability who policy conducted the ne his contract insurance gotiations injury, for the Redskins in case and Smith did obtain such Smith’s negotiations agent, bargaining pro the outset of the insurance.14 Contract were 1968,15 posed long-term closed possibility early April, of a contract actual percentage year. signed May each 1968.16 It raise Gra contract was $5,000 salary $22,000, original three-year provided ham’s offer was for Associates, Topco U.S. 9. J.A. States v. 1238. (1972); S.Ct. L.Ed.2d 515 United 79-80, Sealy, Inc., v. 1272-75. States 87 S.Ct. J.A. (1967). Putting L.Ed.2d aside the question Topeo J.A. 83-84. of whether the rule will survive rule, continuing per se erosion in the immediately apparent majority J.A. 1245. how distinguish Since I con these cases. 13. J.A. 96. clude that the draft is essential to the NFL’s ability produce product it offers to the j. thought company agent 14. Id. The e., sport,” public, “league see text at Mutual New York. 17-53, infra, easily 59-82 I can distin notes guish Topeo Seaiy, where associations 15. J.A. 89-90. necessary parties parties’ were of the ability produce products involved. 16. J.A. 837. team,” paid spectators large the and television audi- bonus if he “made professional $23,000 $50,000 econom- signing of ence. team has a substantial bonus Each — of success all the total. ic stake in the financial other teams. Football, B. The Business of and the doubt, Without the laws reflect antitrust the History Purpose of Draft system: assumption a basic of our economic (1) Analysis. The Need competition that is the most desirable and —Since se,” illegal is it “per the draft not must regulator activity. efficient of economic As Reason, analyzed under the Rule of the Engineers, stated in Engineers, category” by referred to “second legislative The Sherman Act reflects a at 435 U.S. S.Ct. judgment ultimately competition standard, “competitive the ef- Under this only will produce prices, lower but agreement fect” of the of the teams to goods also better and services. “The a college player maintain draft must long heart our policy of national economic analyzing pecu- facts by evaluated the has competi- been faith the value of business, history liar to the the v. tion.” Oil Co. Federal Trade Standard restraint, why it reasons Commission, 231, 248, 71 S.Ct. imposed. . . of purpose . [T]he 240, 249, assumption 239. The L.Ed. judgment analysis is to form a [this] competition is best method of significance competitive about the of allocating in a free resources market rec- restraint . ognizes bargain— that all elements of a service, quality, safety, durability— opinions analysis Id. After of cost, just and not the immediate are fa- majority trial court and and their of vorably opportunity affected the free of discussion the business of among to select operated alternative offers. Even football as the National assuming exceptions occasional to League, majority Football I find presumed consequences competition, court have trial overlooked and not statutory adequate policy precludes inquiry given many sig- consideration to into competition the question good nificant facts whether concerning history of the or bad. brought the reasons which into being continuance, compel its and the Applica U.S. S.Ct. peculiar profes- nature of the business policy competition profes tion sional football in the United States. sports, just application sional as with the

(2) policy unique, exceptional Nature the Business. —A crit- other in “peculiar ical problems fact to the pres- dustries, presents special business” as that the ently component recognized Engineers constituted Court do occasion economically members the NFL ally are sports arise. Professional teams are in with each other. respects some traditional economic units operated through separate corpora- NFL seeking public. sell a product But joint tions an economic competition venture which economic between teams is not thereby fielded teams and furnished enter- and cannot be sole determinant their tainment —and continue do today sports leagues’ so behavior.17 Professional are —to competitors prices players’ 17. NFL teams are economic on the ket services that other teams playing match, prob- field in the sense that each team is must lest risk serious morale competing against opponents all of its for the lems with own teams. These could be large go play- economic benefits that with the self-destructive since the success of a football eventually paid largely dependent upon off and to the winner of the team the morale Super competition players. playing Bowl. This Su- create a J.A. 1844-45. The per rivalry Bowl winner also an economic base in field between teams thus results in the most, all, practi- being indirectly compete required if not of the teams devote on a cally reasonably equal all their income to hire the best with the bene- basis economic get playoffs. paid teams, being effort into the See J.A. fits even if it takes doing, practically 617-18. In so NFL teams establish mar- all of their income. If an entities; situation, entering the business. In this economic uniquely organized league depends competition may success of the exist for a time but ultimate rather than the cooperation economic bankruptcy merger until leaves the members. competition firm; sense, economic meaningful in a field one League, v. National Football United States competition here is self-destructive. (E.D,Pa.1953); 323-24 11 6 Turner, Kaysen Policy: Antitrust C. & D. Note, Super Bowl Sherman (1959). Legal Analysis An Economic and Sports and the Antitrust Act: Professional time, NFL, present organ- At the as an (1967). Laws, The 81 Harv.L.Rev. (or firms), teams ized association of various public is more product being offered statutorily recognized monopoly has a over exhibition —it is a series of than an isolated production major “league sport” that culminate in the connected exhibitions Anyone who professional football. wishes contest grand annual finale between major professional game football watch a teams the best records in the two with game, played must watch an NFL under which have demonstrated League, players. NFL teams rules with NFL and organized, rigidly scheduled prowess History suggests that it is easier for the product being of League competition. The expand NFL to the number of teams than public “league sport,” and fered the league operate it to form and is for another product at the stadium the value of this successfully. Competition may exist for a depends networks gate and to the television time, experiences as the of the American of the teams in on the balance League Football and the World Football television view league. Spectators and demonstrate, long League but in the run lopsided games interested in ers are not competition many is destructive and such contests between weak teams. fail, they teams even as did within the NFL profes- many respects, In the business years. market formative its free by the NFL sional football as carried (3) History The and Effect of the Draft. monopoly.” The resembles a “natural adopted —The draft was in 1935 at a time League single entity as a structure recognized was as the nation- when baseball specifi- outside the antitrust laws was also sport. al In order to consider and evaluate by Congress. Act of cally authorized in 1966 properly effect of the the role and note 34 infra. As defined two au- See necessary to view the conditions that thorities, monopoly is a natural professional at that time. existed football resulting from economies of monopoly changes Books could be written on the scale, size of relationship between the professional football between 1935 and the market and the size of the most effi- 1968; only a few of the we have room for firm of efficient cient firm such that one details. significant most than the produce size can all or more only In there were nine teams price, a remunerative market can take at NFL; and expand capacity four Western Division continually and can League The less cost that of a new firm five in the Eastern Division.18 than squad today operate receive. A of 43 that won the tried to on a strict business basis Super post-season profits, suggested that Bowl would receive total and maximize it is compensation $1,290,000, approxi- play support team would revolt and local $30,000 mately going to each team member. dwindle. other teams also receive substantial com- “large economic benefits” referred foregoing figures appar- pensation. The were post-season play for above for are as follows: ently bargaining related to the collective con- post-season player gets game, of his each '/h League compensation tract around 1970. $31,- salary salary team. With a It is assumed that was sub- the 1968 situation $2,000 a this amount would be about otherwise, stantially comparable; the evidence addition, $8,500 game. paid J.A. 925. would have been irrelevant. champi- League playing for in a conference $15,000 by comprised onship game League was for The Eastern Division Giants, Brooklyn Dodgers, winning Super Pitts- Bowl. J.A. 926-27. The New York Redskins, Philadelphia. burgh, testimony the losers the Boston did not reflect the amount east, college players coming profes a few cities in the out of was confined to Chicago. further west than extended no compete sional could (around Squads play were much smaller salaries, pros security and future ers, 47), instead of free market business, pects that were offered services, players’ existed for and salaries professions, jobs colleges, coaching game were much itself lower.19 Even institu universities and other educational substantially was different. The rules were sign pro tions not to and so elected designed game to create Also, coaches contracts. the best chose to spectators by rather than attract what colleges remain with and universities. today in many contests results in what Many players recognized accurately be described basketball on football, best, a seasonal occu only grass. Players formerly had to be able to best, pation limited duration at play both on offense and defense and to be modest, pay only tempo that it offered play in condition necessary 60 minutes if rary injury, income with some risk than one way rather less than 30 playing days that once their were over minutes; limited; greatly substitution was (even today, average playing the life of a offensive, defensive, platooning kicking, about four and one-half special permitted; teams was not years),21 they belatedly would have to start winning game teams stressed the running Many in their players recog life’s work. formations, from various instead of forward delay starting perma nized that the their passing the “T formation” where 9 career, nent in interrupting or it for a few upon try are men called 11 on block professional seasons, impair per could running plays deception with little no reason, manent careers. For many that characterized the T formation when it college passed players up professional foot was revived in 30’s. There were fewer ball and directly went into Lu business. crippling injuries players because were jobs coaching college football, crative with younger play did not at the exces opportunity embarking for weights sive on well- prevalent today. paying Four teams lifetime career generally with considerable dominated League Bears, Chicago stability, presented competition New York substantial —the Giants, Packers, Bay the Green and the the outstanding players, job for and these (later Washington) Boston Redskins.20 The opportunities teaching profession also regular games, season consisted of 12 carried the opportunity for eventual tenure away games included home and with Brown, and retirement. As Paul a former division; teams in the same season University coach Ohio State and later followed championship game one be coach the Cleveland Browns and the Cin tween the winners of each division. testified, Bengals, cinnati graduating play ers at thought Ohio never

During play era State about sport, League professional ing great was in A competition many substantial busi- football.22 in general coaching ness positions for of those played “they who did so because college graduates. many good football”;23 For football liked to play and it is fair to comprised ing opponent (’25, ’26), Western Division was of mine of Notre Dame Bears, Chicago Detroit, Bay, Bay Green Packers, then line coach of the Green who Chicago Encyc., Cardinals. at 29. play were scheduled that afternoon to the Chi- cago Champi- Bears for Western Division 19. See J.A. 1336. onship. one, Bay players One as the Green breakfast, came for I noticed an unusual 20. J.A. 1310. players University number of former from the average of Minnesota. Most of them had been 21. J.A. 1343. Minnesota, players on fine outstanding all but were not “stars” J.A. public expect on the roster of one of top .playing having teams that was 23. On December for I break- Smith, Chicago play- championship. fast When the number of Red former former —simple, uncomplicated, complete. had “mercenary” element say winning poorest record today it has with the sport to extent affected the first; in inverse complica- the others followed drafted produced a host (and that has record; the team also went to order to their won-lost college players tions). Some prior record in the season profession; with the best prepare graduate school some, early years, In its the draft professional sports.. drafted last. into went rounds, later reduced to in covered but was was thus professional football host of other 17 rounds.28 competition with a substantial graduating occupations for vocations and first in 1936 and The draft was conducted among Even those who college players. annually the last years. has continued half-day to the many only devoted a played, players roughly If we assume that team, game give and thus did 17,- year, approximately drafted each been to demand in it would come effort by profes have been drafted significant teams. sional football What that, draft, large although was a about this number is first there “free Prior so, have been affected great many Even players’ market” for services. modest, in relatively there have been very were lim players’ salaries challenging of lawsuits many significant franchises number club made ited incomes by the go through validity the draft as conducted League would precarious. The - present Maj. Op., NFL. 193 U.S.App. before reached franchises D.C., at 1176 of 593 This testimony teams.24 The F.2d. case is stability, with 28 Bears, impression attack Chicago though even stated to one of first shows that the ing legality in the of the draft under the anti League Championship won they the fact, Halas, It is a material $18,000; George their coach and trust laws.29 also lost no has owner, significance, to case give of the season had considerable at the end $1,000 pointed to Antitrust Divi for each to Bronko been where the York system Yankees that the farm having halt, spot, they found a smooth producing competitive balance. and two of the youths, by con- common sent, opposite take pick college sides and the the out Since first player players, another, first one then until draft was sought held in the results enough are had. accomplished clearly have been achieved. argue Some this has by been caused The need for and the benefits derived factors, preponderance the but competitive equality apparent are testimony factual sup- record evidence lots, captains even on sand where two ports a college conclusion that the sides”; up flip “choose the of a deter- coin key draft was the produced factor which (“drafts”) first, mines who chooses and sub- competitive sequent teams, the alternating choices are exercised in balance of the which fashion. If one brought side was certain the in turn exciting games to lose about the game, people the number of who would be interesting championship races and in- any Canadiens, 30. The trial court states: “I’ve never had Montreal the result of is still questions my importance felt, in being may mind about the of principal have been the one of the balance.” J.A. 1759. See note 45 infra. Stanley reasons for their dominant record Cup competition. may example This of one 31. J.A. 1310. unequal just particu- how one lar, may competitive serve to weaken balance 32. J.A. 1397-98. league. in a preference 33. The draft for French-Canadian players, which at one time was allowed to the mendously popular the in due to increased sport, which public interest in the creased ultimately huge gate receipts and led to the important are the game. terest the Also are presently large television contracts revenues, large television which constitute for the enormous benefits producing part income. The of each team’s annual showing There no themselves. between television contracts NFL record. The ma- contrary page the 2000 League and the television networks argue pro- television that jority of millions dollars distributed hundreds of and the revenues but duces interest and current League; to all in the produced by the draft came balanced teams payments reports indicate that news first and caused the close contests which The substantially to be increased. lucrative televi- public eventually attracted an ex contract, by possible made television sion. emption by from the antitrust laws enacted 1935, the of teams has in- number Since negotiated by Congress,34 is for all teams today’s League 9 to of creased from League moneys These Commissioner. teams, players per team and the number equally each team in are distributed In- substantially. also increased been regard the size of the League without squads of the small around stead In 1968 the team’s local television market. early days sport, players in the ap revenues from television accounted for 47 and roster once swelled to modern team’s percent of the total revenue proximately players. to 43 This has was later reduced approximately the Redskins and this was number of active increased the total percentage average as all same over League slightly in the as whole 1,200. receipts year.35 Team revenue Gate have increased tre- NFL teams in that Allegations provided: Stat. Law 87-331 television 34. Public problems all laws, its revenues cured financial is ne- That antitrust in sec- defined by congressional finding 15, 1914, gated as late as tion of the Act of October 730), (38 Stat. or the Federal 1966 that amended Act, (38 Trade as amended Stat. Commission The was further advised absent committee joint 717), apply agreement merger, danger shall there was a that some by among persons engaging in or or conduct- favorably less in both situated franchises sports ing football, organized existing leagues or faced dissolution transfer baseball, basketball, hockey, or merger will to other . cities. . any league participating in which professional clubs improve player strength re- and financial baseball, basketball, football, or leagues. in both sources of weaker teams hockey contests sells or otherwise transfers Cong., S.Rep.No.1654, 2d on S. 89th any part rights league’s all or of such Sess., (1966). telecasting sponsored member clubs majority basketball, in footnote 46 football, baseball, J.A. 618. The games produced be, hockey, to- engaged balance in or assert as the case by equal sharing day such of television revenues conducted clubs. 732); September (75 impact Stat. 15 U.S.C. This of course coach. fact, ignores § are to which we the historical were also waived reason, antitrust limitations applying the the of that consider in rule by Congress permit merger the the of 1966 was the achievement purpose balance of Leagues. Pub. National and American Football draft, produced the of the and that this 8, 1966, L.No.89-900, Nov. 80 Stat. 1515. league, exciting games throughout led the that Specifically the Act of November original and television contracts provides: Moreover, the increased revenues therefrom. addition, shall not In such laws [anti-trust] equal sharing would not of television revenues joint apply agreement which the to a that unlimited financial resources overcome the professional of more member clubs two or willing are able and to make a few owners leagues, exempt in- which are from football winning produce a team. available to 501(c)(6) Inter- come under section of the tax coaches, majority seek to attack As of 1954 USCS nal Revenue Code [26 invariably losing fact that almost the improved teams operations 501(c)(6)], in ex- combine their § panded single tax, players from the their record with league exempt income so from firing by arguing succeeding of “los- agreement if increases rather than such may ing Natu- the cause. coaches” been professional football decreases the number of rally but others are better than some coaches provisions operating, of clubs and the so coaching not indicate the record does directly which relevant thereto. are contracts, to the increased Due benefits afforded gate receipts, from television professional competi- players, tremendously football other sources has increased college players football graduating tion for their since NFL teams and previously existed from lucrative ben players recipients are the of the direct coaching positions other busi- and numerous efits in of increased national interest professional opportunities ness and been old, College players, years NFL games. met, successfully altogether eliminat- coming college playing out of in 1976 and in practical increasing ed matter. $150,000 making $20,000 the NFL were popularity pro football and its attractive- year.36 their first graduating college players ness to assures sight is in in No end to the escalation those interested in the success of by the players benefits received on account game as television and radio broad- —such growth in the interest NFL foot networks, owners, casters and stadium Many ball. club owners have devoted owners, players already playing in the very por continue to devote a substantial college players NFL —that the best gross tion their players’ revenue to sala year year join after will continue ries, bonuses, aid, pensions, hospi medical professional quality ranks and assure the talization, and other For benefits. games. fact, and attractiveness of their players, some are their salaries astronomi great players go college many now cal. Today, average salary is purpose establishing playing the sole $48,000, including fringe additional ben record will in being result teams; $6,000, professional efits drafted one approximately worth for a six first-round draft choice in the month playing season.37 Salaries have league by many is viewed as the substantial kept pace they more than with inflation: equivalent of summa cum laude —and first- percent higher today than generally paid round choices are much were in 1966.38 The total salaries higher starting salaries. paid Redskins Club to its doubled $1,604,407 $3,350,080 in 1968 to in Football, claimed, is become it has now 1974.39 game, supplanting the national baseball. changes presently exceed in results as a factor States. 17 of Also the stadiums in producing improvement teams, built, occupied by record use were new or sub- losing Twenty-Three “Winning- teams. Of the stantially enlarged present capacity to their in history est coaches” in Pro-football 15 moved years. Encyc., pp. the last 10 454-463. The two, Allen, only to other teams and Shula and organization building new teams winning had records with the new team. This huge stadiums have combined with im- year excludes Washington who Lombardi one proved quality product and the advertis- wins, and had a record of 7 ing produce it receives from the media to its Thus, Encyc. p. losses and new ties. present growth popularity. part This is panacea. coaching coach is no Also in the NFL general sports’ interest the nation which today job is not a man one are enor- —staffs major sports league has seen 42 all mous —and the head movement of a coach grow counting. teams at the last not be critical element. can make Coaches J.A. 290. analysis their contribution but last game played by (trial J.A. not even a 1908. See J.A. 1585 court ac- try deny knowledges players already court should fact. it When benefit draft to does, position obviously League); However, untenable. J.A. 1598-99. also majority’s As statement that the draft paid obvious that the salaries to team members produce did not until the 50’s then televi- directly paid affect salaries to draftees. job, again near-sighted sion did the ais approach and evaluation that blinds itself pay 37. J.A. 1796. Their for six months of en- game that fact it is the on the field that roughly equivalent deavor was to that Con- being paid sold. The statistics indicate that year, gressmen for a and some far exceed that. professional games regularly attendance at has 11,044,018 steadily to increased En- 38. J.A. 1362. cyc., p. league as the number of has teams competitive increased from 9 to and their J.A. 422. spread throughout balance has the United authorizing merger team has the statute Fan interest in the nearest local city city become so intense that after has NFL AFL on the ex- was conditioned a franchise for a local team and has secured increase, pectation that the merger would profes entire substantially subsidized the decrease, rather than the number of fran- (a industry generally sional football fact not chises, explained supra. in note 34 A recognized) by erecting huge stadiums larger League, encouraged by further taxpayers’ hundreds of millions of dollars of market, expanding jobs TV means more for money pledges public or credit and with players, ultimately money more exemptions payment from the of real estate playing League. those in the The draft taxes on municipal account of their owner balance, competitive created the that creat- ship. There is also an subsidy additional interest", public ed the that led other cities raising through construction funds tax ex teams, organize that led to national ex- empt municipal bonds which because of the pansion league, enlarged exemption carry tax lower interest rates on gate receipts, total large led to the Twenty borrowed funds. cities have producing revenue television contracts. Ac- huge erected these new stadiums with “am tually average attendance at NFL ortized tax dollars” and of the 29 stadiums games 12,697 only spectators increased in use four privately were financed.40 per 43,617 game 56,347 from in 1959 to large These stadiums facilitate the crowds 1976 but the increase the number of necessary that are to enable the “local” expansion teams has increased the number compete gate receipts team to with the games Encyc., p. from 72 to 196. teams of other localities that are considered To the contention that it is the revenue rivals.41 The local fans in most areas where produces competitive television that the teams have reasonably established re quality it must be remembered that it was spectable winning acquire records strong competitive equality produced by the interest in their local team powerful and a draft that came money first and that alone attachment players per to certain whose produced has never competitive equality. formance they lags admire. interest Such lopsided games quick- We all know that are if the team becomes a “loser.” out, ly tuned and mismatched teams fail to my analysis, testimony From of rec- my draw. In view of the record and the overwhelmingly supports ord the conclusion dynamics football the draft growth of football between 1935 compet- also essential to a continuation of largely competitive 1968was due to the removed, itive balance. If the draft is balance that League during achieved substantially diminished, its full effect years those quality and to the creation of a present balance can continue for a while product, “league sport.” competi- This great strengths because of the balance, tive consequential tremen- up my opinion has built but in growth interest, dous in public which has testimony creditable and evidence here re- greatly inured to the benefit of the flects that in such event the few advan- themselves, large part is in a result of the taged acquire teams will the best college player growth draft. The in the superiority eventually and achieve sport attractiveness of the team has result- expansion competitive strength ed in the other teams will League; more lose Indeed, jobs players. teams mean more league strength. will lose balanced Oakland, Examples considering of recent stadiums are a new stadium to be financed City, (Shea Minneapolis-St. Kansas New York Stadium for local taxes in the Paul area. Jets), Astrodome), Diego, (the generally Encyc., pp. San Houston See J.A. 1801. 454—463. Buffalo, also, (J.A. 1707), Denver knowledge, common New Orleans and Seattle. deficiency gate receipts 41. A serious could Denver, general obligation $25 million being pay lead unable to salaries expand seating bond was issued to the stadium were with other 24,000 capacity by 75,000. J.A. 1707. To League games split because revenues public knowledge, Minnesota under a state law 60-40 in favor of the home team. that judicial cates almost all members the foot- tinkering in for But we seem to be owners, with the industry, players draft. ball coaches and alike, recognize importance of the the col- (4) The the Draft. —The Reasons lege substantial player draft. No creditable growth professional football between testimony opposed its merits. itself, is, compelling evi- and 1968 dence of the the need for existence of the majority opinion the significant It is product being provided by draft. The recognizes “might sort of draft some component parts “league the NFL —the serving regulate be ‘to defended as sport” high quality because the —is promote competition’ . in the mar . . teams, acting jointly, cooperate in several Maj. Op. at- ket services.” respects: scheduling contests, rigid set U.S.App.D.C., of 193 at 1187 of 593 F.2d. reaching playoffs, formulas for uniform Moreover, the district court stated that the rules, sanctions, disciplinary play- and other draft violated laws because the antitrust its devices, regulatory er such as the draft. imposed in a less restric restraints could be rules, example, For uniform without which this tive manner.44 All of is but another is a play restraint on how way opinion of expressing the game, product, it is doubtful draft in some not violate form would league sport, could even exist. necessary antitrust be laws and figures importantly The draft in insuring balance, preserve competitive and concomi vitality product. of the NFL’s A for tantly quality product per mer NFL Players counsel to the Associa haps strength the existence and of the tion, League Players the American Football League presently as it exists.45 This indi Association, League and the World Football rectly uniqueness recognizes of the eco Players Association, who at one time or sport nomic nature of Each the NFL. another all “represented foot peculiarities. Judge Sprecher own As ball players,” assisted in the preparation held, analogized any “baseball cannot of a (which statement was later delivered in sport other business or even speech by Play President AFL Finley, entertainment.” O. Charles Inc. v. ers January, 1969) Association in which he Kuhn, (7th 1978). F.2d 527 at Cir. read into the in this case: record Both the and the majority trial court option common clause suggest types alternative of a less restric- are no personal doubt restrictions on our legal, tive draft might but both freedom to trade our services. But these issue, fail to discuss the further which their acceptable restrictions are in the under- suggestions suggested involve—whether the standing enhance competi- preserve alternatives would the necessary tion, provide profits which alone can competitive balance. There is no evidence salaries, that pay high fringe benefits, support record to conclusion that their opportunities

and expanding job for all suggestions rule, general As a would. players. majority state that J.A. 1578. To best of the witness’ scrutiny under knowledge, this statement can survive po reflected the sition Representatives only the rule of if it is Board reason demonstrat- the AFL Players’ positive, economically procom- Association at the ed to have time it evidentiary made.43 The petitive record indi- offset benefits that its anticom- following priority J.A. 1568. selections the draft. Sta- analysis tistical shows that could not J.A. 1579. product occurring been the without of chance regard court, trial draft. The noted 44. 420 at 746-47. above, any question remarked: “I’ve never had 659-76, 45. See J.A. 1955-62. one of 12 my importance mind about the bal- seasons from did those 1964-1975 ance.” J.A. 1759. standings bottom half of the NFL’s fail to win a greater games in number of the next season least, players.48 Larger tion for some cities with effects, or, if it is petitive at income49 and larger stadiums realize more accomplish legitimate demonstrated larger to offer hence are somewhat able and to have a net anti- purposes business teams with smaller cities and salaries than competitive effect that is insubstantial. by wealthy - stadiums. So are teams owned Op. at Maj. U.S.App.D.C., of 193 winning on place premium who sportsmen application F.2d. The this 1188 of desires with willing support are their greater to this case is discussed standard financial resources. The almost unlimited below,46 juncture it but at detail ability substantially has reduced draft of less practicalities useful to consider the league. these owners to dominate restraints, here the reasons restrictive apparent. draft become more permit for the that would Given these factors “developing play few teams to corner the college pure A takes all of great many ers” that in a instances eventu coming that are into the market players developed players, ally surpass drafted in poorest with the teams with the records rounds, necessary it is earlier to have a having preference in the order of won draft that reaches the maximum number of and lost records. The draft as existed in potential players absolutely who are neces pure was a and it is submitted sary preserve competitive balance. extensive if that the draft should be that many When the draft does not reach that opportunity competitive for maximum players, stronger the few teams with the only is to be assured. If the draft balance advantages natural will able to corner rounds, the trial court here lasts two remaining prospects the best who become players are suggested, the rest of the left agents. testimony free indicated that preponder for the free market —and the “super wealthy” very a few owners with a players, pre ance of those or at least the deep pocketbook very could obtain sub players in that ponderance of the better advantage there were a substan stantial group, go special would to teams with at pool players.50 tial of free market by super- tractions and the teams owned very great testimony The factual is uncontradicted wealthy millionaires who desire winning Not even a the draft is essential to ly to own a team.47 and vital to the continuation of complete sharing of team revenues could balance posed by public presently interest and the revenues advantage overcome the unfair gate receipts and tel- wealthy being generated owners and collateral attractions of my opinion Large a few cities. cities—such as New evision contracts. record York, supports the conclusionthat some form Chicago, Angeles, Los and Wash also public only way regulate ington special advantages for of the draft is the —offer endorsements, person suggest- has ity, problems. and lucrative off-field involved No proved jobs in business. with better weather ed a better solution. It has to be Cities players, place I the number of are more attractive to some effective. would err, winning high figure, in a if at prospects teams with better draft rounds all, particular having many season furnish a certain attrac too rather than too few - winning page under U.S.App. 46. See text at Coach Vince Lombardi. Green of 193 D.C., Bay page team is an added attraction in that the F.2d infra. 1206 of 593 non-profit publicly operates as a owned and Cowboys return 47. J.A. 1801. The Dallas corporation. for de- All revenues are available team, spend money all J.A. velopment of the team. year scouting for about half a million dollars a players. players new J.A. 1856. About percent gate keeps 49. The home team “pool” year. considered the draft each for the percent. receipts, visiting team takes players If draft, were drafted a two-round greater with a home attendance Teams group be in the around 450 proportionally more revenues. left for the free market. 50. J.A. 1329. J.A.1878, Bay great was a at- Green that team was traction some when to the 5 to 8 superstars gener limited recognized It selection rounds. should be teams need a losing wider is a team ally develop annually. Football 1616, winning teams. J.A. 1626. than the by not game generally a team is made and dispute many play beyond It is serious that college drafting graduating one or two development go good prospects ers with for Notwithstanding the that “stars.”52 fact in the After all most draftees later rounds. passing quar get billing, the the “stars” just getting college are out of at around instance, terback, for cannot succeed unless years their age and not reached ability the rest the team are of sufficient development. physical maximum mental or jobs. stop to If his cannot do blockers advantage They should not be denied the rush, can the defensive or his receivers put serv having the draft a value on their free, get quarterback’s ability the will nev losing ices In and the need them. Thus, pure suggest er it is to show. illusion rounds, the early teams look for imme “blue-chip” that a few or so-called stars is, prospects, developed players diate that players by a equally were distributed impact who can have immediate on the an to two rounds that continuation confined rounds, players team. In the later with competitive equality could be assured. prospects likely of further maturation are “stars” soon become “black-and- So-called drafted,51 to be and havoc would be created chip players blue” if their teammates who garner if a few teams could most necessary to their success are overshad talent that evidenced or achieved its has not players piti owed on other teams. The potential. full showing “great” Simpson ful O. J. argument The that suc- draft could year 49ers, for this with the Francisco San cessfully to a very be limited few rounds is moving years after his successful premise based on the false that Bills, proof. the Buffalo is current Win “blue-chip” super-stars college players in ning strong players posit teams need at all contribute to success of the professional ions,53 good players and substitute for testimony supports team. No creditable inevitably injured. those who become necessary competi- conclusion that produced solely These are not from first tive balance could be assured if the and second round draft choices. college were those 56 graduating limited to reading My page that scouts of the entire evi- deemed best time, prospects at much it were dentiary transcript less if leads me to the conclu- early linemen chosen 51. Bart Starr Willie Davis draft- record were both improved ed in the seventeenth rounds. became Both to 9-5 in which record was All-Pros, duplicated gained six 1474. It Simpson Davis times. J.A. in 1973. over 1000 community knowledge 1972, 1974, 1975; yards also common in this he Hanburger, that Chris Redskins’ seven-time gained yards a record 2003 interest eighteenth all-Pro linebacker was an round skyrocketed. gained In he draft choice. yards. A new stadium was built 1973 and a 80,000 game crowd of sell-out watched first 1776, 1785, J.A. None of this it. success occurred until Buf- early falo used draft choices to select out- example good strong 53. A of the need for eventually standing Simpson linemen. was supporting provided cast for a star is sign three-year over contract two million drafting Simpson by Bills. O. J. the Buffalo (Encyc., 103). hard dollars It is to find a Simpson are well circumstances known. example theory disprove better that a Trophy won the Heisman and was drafted few “stars” a team a win- so-called can make the Bills in the first round in In 1969 and pointed examples ner. similar can be Other 1970, Simpson disappoint- something was of a by any sports follower. ment offen- because of weaknesses in the Bills’ (J.A. 1831-32). majority object Ency- sive line Then as statistics the use of the 103-05, personnel prove, Encyc. clopedia published roster in 1976 because this case Simpson’s performance However, success team’s was tried before that date. the facts began improve began when the Bills in 1972 trial, known, before well occurred were drafting capable blocking Simp- linemen (J.A. testimony were to in 1831- referred 1-13; son. the team’s record 32). improved to 4-9-1. addition With the Maj. Op. straint. Id. at---of preponderance of the evidence See sion that the U.S.App.D.C., the draft at 1179-1181 of the conclusion supports provide competi- the essential necessary to F.2d. argue in the NFL. To about

tive balance Engineers, After there can be no doubt the fine details of a draft requires us but the Rule Reason of, very is the complain do not and which focus on conditions. The Court revenue, comply in order to heart of their permit stated that the Rule does interpretation of a law hornbook inquiry prices the reasonableness of the into sports, apply never intended to does not al- by private agreement, set Also, there has been no show- pure folly. argument spe- because of the low the play- would benefit ing that less restraints particular industry, a cial characteristics of just spec- ers in the lower rounds —that monopolistic arrangements pro- will better ulative, assumption. Anyone untested competition. mote trade and commerce than knowledge pro-football only a TV fan’s 690, 435 98 1355. The Court U.S. at S.Ct. pro- up with less restrictive draft can come v. noted that under Standard Oil United always open in court cedures. It is season 1, 58, 65, 502, States, 221 31 S.Ct. 55 U.S. carry these suggestions for such but none of (1911), which first announced the L.Ed. 619 a tinkerer’s assurance anything other than test, inquiry Rule of Reason “the is con- equal necessary objective of an impact fined to a consideration on com- will be opportunity competitive balance 690, petitive 435 at 98 conditions.” U.S. years in the to come. The same achieved very This is S.Ct. at 1364. essence of changes from the lack of assurance that analysis. Rule of Reason pure years will continue in wide clear, equally Engineers, Yet it is after produce necessary competitive come to performed that Rule of Reason is not to be changes in the balance is also true of recent balancing by any rigid weighing resort to or draft. perceptive analysis formula. The of Justice Chicago Brandéis in Board of Trade v. II. THE RULE OF REASON States, 231, 242, 246 United U.S. 38 S.Ct. 62 of Reason starting point The Rule (1918), quoted part L.Ed. 683 analysis Supreme must be the Court’s 679, 691, 1355, Engineers, 435 U.S. 98 S.Ct. opinion Engineers, recent which held that 637, approval: 55 L.Ed.2d ethics society’s canon of agreement regula- or legality of an [T]he prohibited competitive bidding by its simple a tion cannot be determined so engineer 1 of the members violated Section test, competition. as whether it restrains Act under the Rule of Reason. Sherman trade, concerning every Every agreement The stated: Court bind, trade, regulation of restrains. To open Rule does [T]he [of Reason] restrain, very is of their essence. argument inquiry field of antitrust legality the re- true test of is whether challenged in favor of a restraint regu- merely is such as imposed straint reason. In- may fall within the realm of perhaps thereby promotes com- lates and stead, chal- directly it focuses on the it is such as petition or whether lenged impact restraint’s on competition. To suppress destroy or even conditions. the court must question determine 688, peculiar the facts Proper ordinarily 435 at 98 at 1363. consider U.S. S.Ct. state, ap- re- to which the restraint analysis, the Court went on to the business before and after quires looking peculiar plied; to the “facts its condition restraint, business, imposed; the nature history restraint was effect, proba- its actual or why imposed.” it was restraint and the reasons restraint, the evil 692, history The intendment of at 98 at 1365. ble. S.Ct. exist, adopting the reason for judgment about believed to analysis this is to form purpose or end particular remedy, competitive significance “the of the re- 1206 attained, procompetitive

sought are all relevant benefits that offset to be or, good least, facts. not because a inten- effects, This is at the anticompetitive objectionable tion will save an otherwise accomplish legiti- demonstrated to reverse; regulation, but because purposes mate business to have a net knowledge may help of intent the court anticompetitive is insubstan- effect interpret conse- predict facts and to tial. quences. - Maj. U.S.App.D.C., at at Op. of 193 (emphasis 38 U.S. at S.Ct. at 244 1188 of 593 F.2d (emphasis original). At added). The entire thrust of the Sherman blush, language appears first to be a mandate, Act is to set out broad to be fair statement of a test that “focuses di- given shape judiciary. and content rectly challenged impact restraint’s 690, 98 Just See 435 S.Ct. 1355. U.S. conditions,” on competitive U.S. categorization particular mere combina- S.Ct. and which takes into per illegal tions as unin- se results in “an the salient necessary account factors to test law,” tended rigidity and undesirable Upon reasonableness of a restraint. T.V., Inc., Inc. Sylvania, Continental v. GTE however, scrutiny, closer the test stated n.16, U.S. S.Ct. majority appears easily as one which (1977), balancing ap- L.Ed.2d wooden rigid, application, lends itself to wooden in proach under the Rule of Reason without warning contravention of the Court’s in regard to the factors Chicago listed in Chicago legality Board of Trade that of Board of lead to Trade can the same kind of a by restraint “cannot be determined so “rigidity” by the condemned Court in Conti- test, simple compe- as it restrains whether nental T.V. tition.” 246 38 at U.S. at S.Ct. opinion The majority pur- states that enough It is not Rule of Reason under the pose of analysis Rule of Reason tois deter- simply to find that a is restraint anticom mine significantly whether a restraint “is petitive purpose Engi or effect.54 Under anticompetitive purpose Maj. or effect.” Trade, Chicago neers and Board of an ob Op. U.S.App.D.C., at-of 193 1183 at jective anticompetitive purpose will not in majority agree 593 F.2d. The that to make provided validate restraint the restraint is court analyze evaluation the must “the “ unreasonably not competitive restrictive of peculiar business, facts history conditions,” States, Standard v.Oil United restraint, it why reasons 1, 55, 221 31 55 U.S. S.Ct. L.Ed. 619 imposed,” by Then, required Engineers. (1911) Engineers, supra, quoted the majority following forth set rule: meaning at 98 S.Ct. 1355 the re If, on analysis, the restraint is found to long procompetitive straint has term bene have legitimate purposes business whose promotes legitimate pur fits or business promote realization serves to competition, poses, purposes which benefits or are sur the “anticompetitive evils” of the chal- mised from the context of “all rele [the] lenged practice carefully must be bal- Chicago vant facts” set forth in Board of anced against “procompetitive vir- Trade, 246 at U.S. 38 S.Ct. 242. Simi tues” to ascertain whether the former larly, an anticompetitive may effect not outweigh the latter. A restraint is un- restraint, provided invalidate it meets the reasonable has the if it “net effect” of test, explained Oil above. Standard substantially impeding competition. - Maj. Op. U.S.App.D.C., say This is can that courts consider opin- 1183 of F.2d. Later in the explicitly the factors to which Engineers ion, the majority elaborate on this rule: Engineers forbids them to look. But does scrutiny say draft can survive un- restraint must looked at in [A] der the rule of reason demon- past is context. This is consistent with Su- positive, strated economically preme to have development Court of the Rule of Compare Maj. Op. at----of U.S.App.D.C., F.2d. 1183 of 593 added). anticompetitive An restraint procom need not be A restraint Reason. peculiar to if, facts valid; light whether valid question is to be petitive business, history and reasons for “unreasonably restrictive is restraint restraint, mentioned factors and other Eighth Cir competitive conditions.” Trade, restraint Judge Chicago Board opinion Chief in a current cuit restrictive within unreasonably of a class not Gibson, a settlement upholding This demands meaning of Oil. Players Standard by the NFL antitrust suit action conditions competitive be on the focus the Rozelle which attacked Association conceptions,” 435 U.S. at the “economic had lost Rule, teams that compensating n.16, implicit therein. It recog S.Ct. option, played out players who finding of the existence not demand a balancing does leveling and nized that “[s]ome conditions, a,n though anti- adequate competitive to maintain necessary were rules” will be valid ab- restraint competitive competitive equality: redeeming quality found ana- sent some objectors’ brief and appears from the It significance of the lyzing complete, un- desire argument restraint, sufficient quality which is freedom of movement restricted the realm of the the restraint from remove club, offering their services to the club to “unreasonably restrictive.” position ignores the This highest bidder. any professional nature of appar- structured interpretation particularly This competition. Pre- league sport Engineers based discussion ent Court’s necessity rules must of Eng. and detailed Reynolds, cise 1 P.Wms. Mitchel v. rules played, sport how the govern (1711). involved the en- Rep. 347 Mitchel number, acquisition, game, the seller of a forceability of a covenant players. While some engagement purchaser compete with the bakery not to playing out movement after freedom of noted that the the business. The Court order, complete freedom contract is in tem- Mitchel was limited both covenant in in the best fran- would result movement geographically. U.S. porally and top players. acquiring most of up- chises The covenant was S.Ct. appear balancing rules leveling and reasonable, Some though it de- “even held keep the various teams on necessary to potential public of the benefit of prived basis, public without which en- long-run benefit of competition. The This, sport quickly fades. any interest business marketability of the hancing the past course, of most of the is the crux incentives to thereby providing itself —and in force. and those now restrictive rules enterprise outweighed develop such an — up sports are set Professional competition.” temporary limited loss paying customers and enjoyment of the line, involved a Mitchel Id. At the bottom or of the owners solely not for the benefit competition between prohibition on total pub- Without players. of the the benefit period limited purchaser for a the seller and sport would any professional support lic area, purpose and the specified of time in a to the owners unprofitable soon become the indus- prohibition was to benefit participants. and the commerce. trade and try promote and to necessary was in Mitchel League, prohibition 584 The National Football Reynolds v. characteristics 1978). “special (8th (emphasis because Cir. F.2d majority competitive equality dif- and while the Engineers, supra, U.S. at 55. See degree draft contributes with the that Act does not fers at 1367: “The Sherman S.Ct. disagreement competitive bidding; prohibits that require unrea- to this there is no it competition.” to com- case contribution This does make a substantial sonable restraints on Engineers petitive equality quality distinguishable mate- of the overall in one is from keeping imposed respect. Engineers product all an anticom- factor in that is a vital rial strong petitive league that and an because of the claim and viable restraint safety necessary organization risk to the of other teams to avoid a inducement for the public. leagues. to be unfounded. This claim was found and other preserve maximum Here the restraint is present industry.” Engineers The restraint for it is particular easy Mit- helped which, chel assure the survival of the busi- distinguish permissible restraints ness, ultimately attract would other effect, though carrying anticompetitive where businesses into the area the restraint restrictive, unreasonably are not im- from thereby promote operative compe- permissible designed which are restraints tition. only to parties enhance the business of the analysis, restraint. In the final Engineers Yet that also states courts can- tension is if the unavoidable antitrust laws “monopolistic consider whether ar- flexibility are to rangements promote necessary retain the will better trade and competition,” id., types commerce than deal with myriad par- or of businesses — good competition “whether is or bad.” ticularly unique one as Clearly, U.S. at at 1367. S.Ct. based sports a manner consistent with the —in Engineers Mitchel, on discussion of it is Congress manner in which intended the Act possible to anticompetitive have an re- to be enforced. violate straint does not the Rule of Thus, view, my to the extent evidence Approving Reason. the restraint in Mitchel presented is draft is essential to or that the not involve judgment does about whether materially vitality enhances the bad; competition good simply is it is NFL, and the play economic benefits of the that, judgment on all based the relevant ers, I do not believe that such is evidence Chicago facts set forth in Board of Trade automatically irrelevant under the Rule adopted Engineers, competition Reason. fact The mere the restraint the restraint eliminates not in the best League increases revenues or qual that the immediately interest of that business nor in ity improved game apart —viewed industry, the interest of that insofar as a other consideration —is not relev failing discourage business new busi- ant.56 But to extent the draft nesses whose entry into market would figures in vitality of the business in promote competition. analysis This focuses sense, Mitchel these considerations are relev competition, consistent with logic, ant.57 League may successful Rule of Reason. encourage leagues to devel sense, aIn the philosophy Mitchel reflects op occurred with the American Football —as “some better than no business is busi- League recently and more the World Foot ness, business, for with no there can never ball League (although that effort was ulti competition.” philosophy Yet this is in- mately fail). leagues Such created direct implication consistent with the majority the competition players’ in the market for serv in Engineers seems find that a court can League encourage ices. success also never look to the effect restraints on sports, similar in attraction or reason enhancing the parties business the to the interest, able fan substitutes for to devel Maj. Op. U.S.App. restraint. at-of op as soccer—which may compete D.C., view, at —such my 1180 of F.2d. In against football the the for attention of Engineers does not as far reach as this public possibly and for some In players. implication, is impossible because it to ig- instances, some sports might different nore the effect of a on a restraint business athletes; compete certainly for the same if one is to opinion form an about how a competition there is might ultimately restraint the attention of serve to attract thereby young training other businesses enhance com- athletes themselves in petition. sport, There is nevertheless a hope making tension day of one Engineers, Engineers, competitive suggestion In the facts bid- there was no ding might quality product, bidding competitive decrease the of the the ban on contributed public safety might impaired, vitality profession or that of the or that ban testing any way were not relevant was in to the reasonableness essential existence of profession. testimony of the at restraint. 98 S.Ct. 1355. Here such is not contra- dicted. J.A. cities, large play in a warm climate. play profes- available for in a themselves It well known that foot- league. sional play close home or where Some want to play- ball drafted some track basketball college reputations; or made their sports is competition ers. between Such climate with prefer invigorating some an healthy; gives public play- and some knowledgeable sportswriters and fans who choose dif- opportunity ers the between game. understand basics product, ferent forms of the same the weight any particular factor varies ac- “league sport.” preference, taste’ cording to individual Furthermore, to the extent rendering thus the notion of the “best” as a resembles a natural business players’ perspective team from some- monopoly, that status is relevant to the what variable. analysis. By focusing on condi- market, majority opinion Given this tions, to the conclusionthat might one come competitive impact assesses the of the draft monopoly, natural the business is a competition among the teams’ on the own- factors, given might all the other one decide players’ majority services. The ers for see that the restraint of the vital to competition as an absolute ban business, Where the is not unreasonable. between teams for the services of conditions are such that the forces of com- just college. Finding out of an absolute petition produce monopo- left alone would effect, anticompetitive majority con- ly, organized increasing some manner of procompetitive clude there can be no bene- developed number firms must be so that stating impossible fit. After that it is competition” “artificial can be created - balance, Maj. Op. U.S.App. naturally where there would be none. F.2d, 1186 of 593 the majority D.C. at by regulation Government intervention or proceed to balance and find what essential- might provide control competi- the artificial ly predicted amounts to a outcome to be tion, carefully policed agreements among plain anticompetitive outweigh effects might provide the members of the firm —-the benefits, procompetitive and the draft is competition.” Consistently “artificial - Maj. Op. invalid. U.S.App. proper analysis, Rule of Reason the draft of 193 “carefully policed agree- can be viewed as a D.C., 1187of 593 F.2d. among League

ment” the members of the In my opinion required this result is not necessary stability which is of the by Engineers or the Rule of Reason. Be- League ultimately its success as a func- case, dealing fore with the instant it is tional business. majority’s ap- useful to consider how the the issue majority frame as balanc- proach deal with a related context ing procompetitive effects and the result, view, the proper my where is even anticompetitive effects of the draft with clearly more cut. respect players’ to the market services. Regulation by discipli- conduct important It is the nature of to understand nary sanctions is one of several factors owners, pur- this market. The teams’ “league help product make the services, players’ chasers of are “adverse” sport.” Players according perform must to each other in the sense that each owner it; certain on the field and off of rules both desires to obtain the most talented available rules, product could not without such players. players The are to some extent implications discipli- exist. The antitrust of other, “adverse” to each as the de- nary professional sports sanctions were teams, play though sire to for the best what confronted in Molinas v. National Basket- may vary perceptions is “best” in the Association, (S.D.N.Y. F.Supp. ball 190 241 players, just people different as some like Plaintiff, 1961). player, a star was sus- say different foods or colors. It is fair to pended by league placing for bets on large percentage that a of the league games. The court stated that “a pay attracted toward the teams that most, records, winning against gambling have are located in rule invoked disciplinary 1210 Widespread cheating seriously jeop a rule be would about reasonable as could

seems imagined.” The court said that the rule product of marketability of the ardize reasonable, only was neces- not “but sense, [was] professional In a Mitchel basketball. sary league.” for the survival of the 190 prohibition disciplinary sanctions anticompetitive at 243. The effects to the such cases would disastrous disciplinary prohib- of the measure —which Engineers League. I do not believe that any using ited NBA team from the services Molinas, was intended to overrule or that plaintiff No could absolute. one —was required to allow congressional action plaintiff; competition no contract sports to such re professional effectuate encouraged. in any respect his services was run, say long I straints. would absolute, total, complete, The ban the restraint in Molinas facilitates sur purely anticompetitive. Were con- we to League. may ultimately vival It factors, however, sider these encourage competition; more other by majority done manner in this case form, grows, may Leagues, if the NBA or respect to the we would be sports leagues develop other and com required to disciplinary find that sanc- pete for the attraction of athletes and bas tions constituted a violation of the antitrust view, my ketball fans. In Molinas is indica laws. of the approach tive which should be used result, agree I would with such a in this case.58 I do Engineers requires not believe that it. approach coupled 58. A case in similar which a with the intent to it for anti- er use used Deeson v. Professional Associa purposes Golfers’ or with anti- inevitable tion, denied, (9th Cir.), F.2d 165 cert. 385 competitive effects that establishes the of- (1966). U.S. S.Ct. 17 L.Ed.2d monopolization. fense of United States v. case, plaintiff complained the PGA Griffith, 100, 107, 68 S.Ct. conspired and its members had combined and L.Ed. monopolize golf the business of tournament finding No nor evidence has called to been violation the Sherman Act. could Deeson our attention which indicates that PGA has satisfy requirements ap become used, use, position or intends its as the proved player, challenged tournament and he sponsor co-sponsor or of a substantial num- entry grounds. rules on several PGA preclude sponsorship ber tournaments to rules were restraints of trade: PGA members others, golfers of tournaments to to exclude keep combined to out the business those tournaments, sponsored from access to PGA who individuals could not meet their standards. suppress competition toor or eliminate high It was an absolute restraint those with golf. tournament scores, competition and there was no encour us, According to the PGA’s evidence before aged between of the had members PGA who category approved creation of tourna- requirements met the those who could not. competition promote ment tends improve quality Yet the restraint did facilitating participation proficient young- product golf of tournament and in fact made evidence, players. According er golf PGA the business of That viable. competition by sought encouraging join has also to stimulate the ultimate effect of others business; theoretically, giving recognition many might those official tourna- effects encourage golf sponsors co-spon- associations to estab ments which it neither nor explained ap lished. court in Deeson its sors. . . . we hold that the trial court proach way: in this finding concluding not err in did generally speaking, any power way It is true that associ- PGA did not use in a which is sponsor ation that undertakes to contest violative of section Act. the Sherman any power any applicant kind has exclude (emphasis added). Although F.2d at whatsoever, pow- reason unless such rules, draft, absolutely prohib- the PGA like the by operation per- er is curtailed of law. The level, competition one ited the rules were however, inquiry, tinent is whether an associ- competition by viewed as an ultimate benefit to power ation intends to use that in a manner ensuring vitality product, as was the suppress destroy competi- which tends to case Mitchel. tion. Hatley See also v. American Horse Quarter size, unaccompanied Mere in- unlawful Association, 1977) (5th 552 F.2d Cir. power tent or conduct in the exercise of the industry (“When requires the nature of the gained through size, does not constitute entrance, upon some limitations Section is violation of section 2 the Sherman Act. violated”). monopoly pow- . It is the existence of F.2d). U.S.App.D.C., at 1186 of 593 of 193 AND RULE OF REASON III. THE objective DRAFT59 in an PLAYER It is the draft THE COLLEGE true competition restrict the is intended to sense its decision grounded court The district players. the services of the among teams for rule, but then per se application of “nefarious”; is not Clearly, purpose ap . . . to state that “even went on the entire promote intended to would not the Rule of plication Reason] [of oper NFL, product to be of- liability quality for the of the defendants from save The court concluded vitality of the draft.”60 ation and to ensure public fered the the draft was the evidence on whether game’s existence at “at competitive balance was essential to only exists at one purpose level. But this equivocal,”61 and that no correlation best level, “player-ser- in one market —the the draft and between was demonstrated only market or market, is the vice” for this reaching such League survival operates. As dis- the draft level where fac ignored the uncontradicted conclusion above, anticompetitive purpose, cussed contrary preference testimony to the tual itself, enough disqualify cannot be “expert” opinion not to an economist’s laws, for then under the antitrust restraint The court did in factual evidence.62 based Chicago in Mitchel or Board the restraint detail, how these matters not consider Trade, objective clearly terms was which ever, “the current struc as it believed that period of its dura- anticompetitive for than more restrictive significantly ture is tion, passed never have muster. could not necessary,”63 and thus the draft case, important in this con- At least The court said the Rule of Reason. satisfy The be restrict is the effect of the draft. of rounds could sideration that the number ed, permit strips one team could be majority or more than concludes that the draft Although the player.64 ted to draft each bargaining power,” “any real ap majority slightly utilize a different salaries, if not suppresses lowers their the conclusion of the proach, they affirm services. destroys competition district court. - Maj. Op. U.S.App.D.C., of 193 majori- disagree. 1185 of 593 F.2d. I is anti- that the draft majority find only looked at and the trial court (Maj. Op. ty opinion at- purpose in its competitive failing to have opinion in the draft that even if the draft —resulted IV of this concludes 59. Part laws, competitive “any tes- balance. This is a violation of the antitrust effect” on the draft damages destroys theory plaintiffs timony the cases no case— Smith suffered “actually” compels that a dismissed. It should be noted should be the draft first, damages, finding if reached elimi- of no sign him. In this that drafts with the team validity of the draft correct, nates the need to test the testimony respect, draftee is case, finding purposes of no him, for damages effectively of this to the team that selects not hide bound viola- moots the antitrust expert ma- and the but the conclusion that Kapp involved. See v. National tion issue jority the draft does draw therefrom —that (9th League, at 649 Cir. Foodball 586 F.2d 644 “any balance —is have effect” on accompanying 1978). note 83 See also text past players not moved In the have incorrect. (finding infra of no antitrust violation effective- testimony frequently that the all that damages issue). ly moots the winning strength development (J.A. league drañ was based on the F.Supp. 60. 420 at 745. (Broncos); (Dallas)), (Bengals); indi- ” F.Supp. 61. 420 at 746. opinion unsup- “experts’ cates that testimony. ported by Part of this the factual F.Supp. “expert” for the 62. 420 at 746. One argument also overlooks the fact majority principally plaintiff, relies most movement of from team to team on, testified that the draft “doesn’t trading players frequently and draft involves ” [competitive . . balance] effect on Maj. Op. n.46. choices. Cf. the talent J.A. 910. He further testified gravitated “city it is most valuable where 63. 420 restric- .” To his mind the absence of among redistributing the teams talent tions on F.Supp. at 747. 64. 420 “according team” —the to their value to the be moved after for talent to freedom that exists negotiated players’ only from the side others. If had with draft Smith portion bargaining market, As for power, that. Redskins in a free the Redskins operation of the draft also restrains simultaneously negotiated could also have (even dealing players team other safety prospect next-best for free though exceptions, there are be discussed availability as well and the of the other low). particularly This is true when a team player might have to reduce the served for a position, drafts as the Redskins in did salary offers to Then if Smith. Smith drafting Smith their as first round choice in terms, come to Redskins could not 1968. The Redskins drafted Smith in the opt always Redskins could for one safety first round to fill a need at the “free prospects they other considered to be close position.” using In their first round ability, experi realizing, Smith in well player particular choice select a for that many ence has proven, times the ulti position, they practically put all of their mate development performance eggs in one for that year. basket select might second or third eventually choice Smith, ing passed they over did not eclipse that first favored choice.67 reach, all players nearly equal other abil college Drafting players is not an exact ity position. After the Redskins science. selection, had exercised their first draft Furthermore, gives the draft an advan these players would be chosen oth tage player in permitting him and his er picks, teams with later thus and would agent to approximate know the value that not be available later rounds. Even if places the team on his services. This can be player available, another was later it would determined from the round in which he is be a waste of a valuable draft choice for the selected in and what his and other Redskins to subsequent use choice to contracting pay players clubs are his position, draft for that posi same since the ability relative position his and draft tion needed one player and the team status. testimony As the in the trial court had other fill needs to as well. That is the disclosed, in a free market would be way player the 1968 draft went for the disadvantage at some negotiating a con they Redskins. After had drafted Smith they tract necessarily because would not first to fill that position, practical the team know advance what value the team ly to sign had if they him wanted fill placed on their services. A player drafted what considered was a vital va obviously first round he knows cancy. These gave circumstances Smith team, highly valued and he can use very bargaining leverage,65 substantial expression bargain this relative value to agent his negotiating frequent higher salary fact, for a accordingly.68 In ly Also, reminded the Redskins. a first particular round in which a player is round draft choice commands considerable drafted, coupled position when with the he publicity in locality, and the team is plays, practical giving effect of very under pressure considerable from its player’s year year services from a defi sign fans player thereby put monetary nite value. pick first-round ain uniform.66 Smith choice, beneficiary, as first round Having knowledge places this advance public pressure. such strength drafted position While bargaining free market a could his with the team negotiate teams, with several a team could for his salary services and wise this consid- also negotiate erably with several of near competitive disadvantage offsets ly equal ability play against Indeed, off being one limited to one team. 1171, 1622-23, 1631-33, 1848-56, 65. J.A. 1869- 67. J.A. 1496-97. 70. 1495-1500, 1363-65, 1887-89, 1926-28; J.A. 1124, 1364-65, 1410-11, 1586-87, J.A. 1711- see J.A. 1415.

1213 league practices might that alleviate what fact, coupled practical com when with the appear requirements be the strict pulsion sign team to drafting their practice” for a draft. is a “common It choice, a team drafts to particularly when team, and then by one player be drafted gives position, negotiating player a fill a team, by a to deal followed with another bargaining in very advantage considerable negotiat having trade between the club salary.69 for his rights playe ing wanting the club event, any actually In restraint brought At it argument, oral was out r.70 being player restricted results on was drafted that Jack of Notre Dame Snow can be bargaining with one team overes- Vikings by a wide the Minnesota receiver just majority opin- if one timated reads However, in the first round.71 ex Snow looks no than the written ion and further a pressed playing dislike for in the Minneso climate, ta with the Actually negotiate there are a number of refused word. States, 1, Though weight this factor should not New v. United 170 U.S. 69. York Indians overestimated, 531, (1898); Landy a can be is true that draftee 18 v. S.Ct. 42 L.Ed.2d 927 negotiate FDIC, 139, 1973), (3d with clubs in the Canadian Football 486 150-51 cert. F.2d Cir. League, negotiation leverage denied, 960, 1979, and use 94 S.Ct. 40 L.Ed.2d 416 U.S. bargaining Ladd, with It is known all NFL clubs. (1974); U.S.App.D.C. 312 237, Baenitz v. 124 Metcalf, Terry pre- 969, football followers that 238, (1966); F.2d 970 Mills v. 363 running Louis mier back with the St. Cardinals 808, Tramway Corp., Denver 812 155 F.2d season, recently signed in the 1977 with a (10th 1946); Legion 90 Cir. American Post No. team. of the Canadian Canadian The existence Co., First v. National Bank & 113 F.2d Trust weight. option is entitled to some See J.A. 868, (2d 1940); 872 Cir. Electric Se Nev.-Cal. 1368-69, 1409-15, 1713-14, 2007. 886, Imperial Dist., curities Irr. Co. v. 85 F.2d denied, 662, (9th 1936), cert. 905 Cir. 107, 1137, 70. J.A. In one breath the (1937); 871 57 S.Ct. 81 L.Ed. Palmer v. majority opinion asserts that cannot Co., F.Supp. (N.D.Ohio 1948); Sun Oil 78 53 any except play with those that draft Co., Bag Paper De Cew v. Union 301, & 59 and in the it asserts them next breath (D.N.J.1945); 313 Dunbar v. Humboldt players’ number of factors are “decisive Bay District, Cal.App.2d Municipal Water 254 (1) . suchas: choice of . unre- (1967); Cal.Rptr. 62 361 29 Am.Jur.2d opportunities, (2) business racial lated discrimi- 56; 31 29 at § § Evidence 16 C.J.S. Evidence nation, (3) general community atmosphere, (4) Co., Knapp-Monarch 296 F.2d 884-932. In re owner, league, dispute preference (5) with 230-232, (1961), 779 states: CCPA climate, (7) (6) opportunities, (8) educational may of facts Judicial notice also be taken staff, (9) disagreement coaching disagree- actually “though they notorious are neither -p. management. Maj. Op., ment with known, yet judicially nor to be bound — U.S.App.D.C., at 1183 593 F.2d. And to unques- capable would of such instant be personal prefer- player’s be this can added a desired, demonstration, that no tionable city proximity ence for a or area in to his falsity party imposing on would think of college played, he or to the where residence intelligent ad- tribunal in the face of an objection quality (win- possible and his ning Evidence, Wigmore versary.” [Citing thereof) prospect record or the team IX, (1940), Third Section Edition Vol. him. that drafted Each of these circumstances 2571(3)]. moving can be a factor a team majority’s complete It is a answer to the signed and can more after he has easily a contract complaint opin- of the few references initially signing be a factor in his events, Maj. Op. ion to 49 of recent at-n. team other one that drafted him. some than the F.2d, U.S.App.D.C., at 1185 n.49 of majority question Encyc., does not the valid- at 165. ity of the facts so referred to. Actual- majority complains of reference facts ly, merely duplicative of recent facts are such Encyclopedia Pro disclosed Football already trial The invalidi- facts ty record. knowledge and to matters of common that can prior assumptions of a court’s readily factual encyclopedi- verified be reference predictive consequences may future be as, publications and other of established books by pointing that the results authenticity. clearly permissi- demonstrated out This however is predicted; may were different than ble and for the first time on done after recognized by fact of these occurred appeal that some results as is the Federal Rules of prevent Evidence, 201(f) does court’s decision Rule states: “Judicial fact, pre- indulged any stage pro- use. since court notice ceedings.” taken at Parker, testing by assumptions See also v. U.S. dictive it invited Werk 132-33, (1919); subsequent 63 L.Ed. outcome. S.Ct. posed already Vikings, Angeles playing to veterans traded to the Los seasons, played Rams where he eleven League, have interest in the existence no to 1975.72Joe Namath was also selected on suggest It be error to other- draft. first round draft choice obtained in a wise because without a draft a less stable It Encyc., trade. is common League with fewer franchises lower knowledge that frequently trade players Incoming salaries would result. re- players satisfy personal pref to compelling ceive salaries and bonuses far in excess of players.73 erences of the in practical So they what command in a free could market reality the draft is as restrictive as it of league teams in a that did not have the may seem to those who are unfamiliar with competitive player which a balance it or who blind to how it themselves works produces. vitality of League, practice. admittedly dependent large which is player All teams recognize that morale is competition measure on the balanced important an play factor football.74 The produced draft, by the has attracted so proceeding er draft is not a cold austere great public public in interest that conducted ruthless automatons who localities, above, most as referred to has regardless make their of the de selections subsidized the teams erection players they sires of the select. To assure huge stadiums without full to contribution players agreeable will playing to for their cost the teams that use them. This expect them the players they teams contact fact paid has to enabled salaries to draftees selection,75 to draft in advance higher than what would be in a free try to avoid who do not want to market with the attendant destructive com- sign play to If play with them.76 of petition, unequal balance, forces in the draft result in a situation resulting shaky franchises. It cannot be player sign where the does not with the said that rookie have no interest in him, team that generally drafted trade is college player existence draft. worked out to some team where he will short, my opinion, evidentiary agree sign.77 The drafting team has record here supports the conclusion that the every do incentive to this in order sal draft also has a favorable effect on the vage something out of their exercise of a bargaining position players, which to valuable draft choice. Sometimes a team considerable extent nets out the adverse player drafts a with the intention of trad limiting players’ right effect it has in ing him veteran with some negotiate with other teams. And this bar- many ways team. The draft works in gaining equivalency vitiates the assertion to achieve team balance. Generally players players’ are depressed salaries 78; consider it an honor have been drafted account of the draft. it is those who are not drafted who are disappointed.79 competition suppressing As for for play-

Simply services, because the draft is essential ers’ objec- is true that the vitality tively the business does not mean speaking, competition restricts such players entering League, op- that, beyond between teams. But the exist- Encyc., may Vikings League prohibit 72. See signing at 159. The have rules be- trading drafted college games played. Snow the intention of for a fore all his have been Angeles player. Los J.A. cf. 211-212. 1418, 1686-89; Encyc. (circum- 73. J.A. at 164 76. J.A. 1410. stances of trade Fran Tarkenton in 1967 Vikings Giants). from Minnesota to New York 77. 1418. J.A. n.70, supra. See 78. 1453. J.A. J.A. 1411. J.A. Id. 1410. This is not in violation of league majority might rules infer. television. In some instanc- to audience relationship a direct the draft has ence of es, compete NFL must even with other in the Mitchel vitality of the business the same athletes. sense, sports this draft out of the for the services of which takes “unreasonably helped re- the NFL restrictive” Since has realm of improv- competition. Now, all of the majority asserts almost straints. no immediate ing competitive college players sign balance has best services, teams, has players’ game on the market effect attractiveness compe- some) increased, not increase (according the draft does baseball encouraging others game, tition in sense supplanted as the national been — Maj. Op. enter the market. players’ salaries teams’ incomes U.S.App.D.C., F. at 1186 of 593 greatly astronomical amounts increased—to competitive balance Improving 2d. in some instances. immediate, direct effect in not have argument of the Redskins viewed, the So services, competi- but players’ market for ad- here differs from that and the NFL quality of the tive is related the balance the Engineers. in It is true that vanced vitality and the of business product argued lifting engineering profession that the production of the revenues bidding re- competitive would the ban And as expects for its services. market durability, safety of quality, the duce have league have increased so revenues this to be product. But was not found into the mar- entry salaries. While do with the nothing had true it leagues not professional sports ket is of of whether the ban Mitchel consideration that avenue is not abso- particularly easy, to the wholesome existence was essential league And a successful lutely blocked. long in run served industry, or entry. for In provide does an incentive provision encourage competition for fact, in inaugurated since draft products. That product comparable successfully 1935 there have been is the matter of is what involved here when number oth- league a added —and invoked; what was “competitive balance” is period ers And a tried. for considerable not Engineers is the same condemned in inter-league competition for time there thing. players’ very This is a substantial services. court, at, hints majority, like the trial sense, in procompetitive the Mitchel benefit of, legality assess the less but does not not account and it is taken into already in I have balancing to restrictive alternatives. majority approach. in its Yet I believe such alternatives entry impossi- why is assumed to be dicated extent ble, present of the purpose contention that supports this would fulfill evaluating football is alter the business of In less restrictive draft. carefully policed law, where monopoly” “natural it is as matter of difficult natives in them- agreements, restrictive somewhat kind of would be valid imagine what draft selves, they are essen- are tolerated because alterna of a less restrictive if the existence of the vitality tial to the and existence present automatically render the tive would Regardless of one’s business. which track less restrictive draft unreasonable. Some takes, that the analysis it does not follow imagined. When always be alternative can draft violates the Rule of Reason. Reason, is Rule of the test applying the re the least whether the defendant used enhancing possibility In addition to issue, Rather, alternative. strictive it be Leagues, must competition from above, the restriction explained is whether compete must recognized the NFL context “unreasonably restrictive” other careers for with businesses and re A reasonable particular case.80 to of the graduating college players best order merely be- illegal not become large striction does spectators games to its attract Inns, Inc., Inns, Holiday Industries, Inc. v. American Motor Furniture Bravman v. Bassett denied, 1975). Inc., (3d (3d Cir.), 1248-49 Cir. cert. 521 F.2d 552 F.2d (1977); L.Ed.2d U.S. S.Ct. chises, coming and soccer is cause less restrictive alternative exists. on strong. view, my In is no proof there this record Whether would continue television revenue present figure that a less restrictive draft can at its astronomical if soccer achieve as in necessary game became the national most present benefits question. preserving vitality business, open rest the world is an Cer as I tainly above, provide competi it substantial discussed that matter and thus just public tion because less interest shifted some restrictive alterna- though parallel. the seasons are not These might conjured tives up of no force. changing conditions indicate the need to All the less restrictive alternatives result changes avoid unwise draft which agents free and these can be acquired to might strength harm the overall assure continued dominance —not NFL. The is one impor most equality. As New York tant which methods weaker teams can just Yankees have one proved, agent free improve themselves.82 to strong added roster a free spending owner can deny assure team dominance and analysis Antitrust must retain the flexi- it to another team. bility to cope multiplicity types with the types of businesses and of restraints that any event, necessary is not it pervade system. par- our economic This is prescribe court what form the draft ticularly with boycotts, true should take. probably And will never type essence the of restraint is in- necessary to appears do so because it volved college with the draft. Various the exemption may already labor have been of kinds concerted action must be distin- used to validate draft with less restraint guished, ways. and treated in different than the one that existed in 1968 and there Inc., Broadway-Hale Stores, Klor’s Inc. v. is showing no that the present draft dam 79 S.Ct. 3 L.Ed.2d 741 ages players. the But proof there is no that (1959), group teaches that if a of store draft, present the or one that might be owners in urge combination manufacturers negotiated, hereafter will be as beneficial to stop selling goods wholesale com- the players, way the preserving the neces petition and if the group up backs re- sary competitive present balance. The mo quest by refusing to do business with the League’s mentum of the growth can contin manufacturer, the restraint —the effect and ue for a period, considerable and perhaps purpose of which is to the competition drive changes some time can survive illegal However, out of business —is per se. draft eventually prove will to be detri group if a of citizens in combination refuse long mental in the making run. But when patronize store, the the restraint —the changes, they tampering goose the purpose effect and is to drive the lay golden continues the egg; they business, store out of or cause it to sell should be lest problems careful create different kinds of books —would not be not, for the future. Like it or there will laws, deemed violative of the antitrust even always be some form of draft be though very it is similar to the conduct necessary cause it is the success of recognize condemned in Klor’s. Courts League. The aim is to have all as groups citizen can restrain trade non- nearly possible as equal roughly competi purposes, though economic even the intent strength tive drawing power, bringing economic sanc- restraint — problem create franchises. Instead object tions to bear the boycott— the imagining less restrictive alternatives illegal. is the same as other conduct deemed courts should to improve work the draft Hockey benefit the weaker losing draft, my view, teams. is fails somewhere in attraction,81 its television its lack of compet boycott between the condemned in Klor’s itive weakening balance is losing fran- boycott for a purpose. non-economic 1760; supra. J.A. see note 33 J.A. 1316. anticompetitive the effect of the draft. to obtain economic designed The draft is effect of brings in this case the of This us vitality the economic promoting benefit — salary. salary Smith’s draft on Smith’s competitive balance. League through of other Redskins. was in line with those Klor’s and the citizen unlike both the But the financial records J.A. 423-575. Since restraint, sought is not at the the benefit that the Redskins for 1968indicate e., boycott, i. object expense of practi- league paying teams were out other players who play those veteran cally players’ all income in salaries and it, enormously They profit the NFL. that, is operating costs it obvious other expect to and as and drafted rookies do getting or no Smith’s chance of draft by the size of their salaries and evidenced practically was higher salary non-existent. The economic benefit which bonuses. Thus, him the effect of draft on product, producing a viable obtained majority’s for- insubstantial and under league sport, inures to benefit of those would survive. I would mulation the draft another, are, objects at one time or who merely It in that conclusion. an- concur boycott, namely players. This is way saying that Smith no should not taken a consideration which he cause of action because obtained fa- type analysis lightly; it is endemic could even if there vorable contract he within the realm of Mitchel which is no were draft. Engineers. doctrine, as related short, Engineers In I do not believe that IV. DAMAGES as it existed in 1968 requires that violate Rule If the does not violative of Rule of be struck down as Reason, unnecessary ques reach Reason, I and would conclude of dam proper tion measurement Engi- not unreasonable under the draft was However, assuming ages. arguendo that neers’ standard. illegal, the draft as it existed in 1968 was I reasoning Finally, majority’s should would still conclude Smith that: be noted recovery against to any entitled defenda scrutiny view, can survive un- player draft my this is so clear that it is nts.83 [A] rule if . der the of reason necessary to remand the district . it demonstrated recomputation. the least . . is for court accomplish legitimate pur- business majority agree I with the that it was anticompetitive poses a net have proper computing for trial the the court effect that insubstantial. $19,- disputed the damage award to include Maj. Op. p. U.S.App.D.C., p. -of paid the Redskins after Smith majority 1188 of 593 that F.2d. The admit compensa- injury, his in Smith’s “actual the is not and that it does pernicious majority I the agree tion.” also with that accomplishment legit- the contribute to a for the district court com- it was error improvement purpose imate business finding on the pute damages the based that —the the, league product Smith, so all negotiating in a had been free he market, negotiate is to benefit. All that remains able to would been anticompetitive three-year salary guaran- find that the net effect with a contract view, major- regardless injury. my we find with the In it “insubstantial.” If teed clearly the court to ity procompetitive there no effect was erroneous for trial evaluating could have obtained purely question then it is a conclude that Smith straint,” 647-648, 4, 1978, August the court did not reach the 83. On the Ninth Circuit decided cross-appeal Kapp League, question NFL’s v. National Football 586 F.2d raised the holding by Kapp the whether district court’s One restraints attacked college player antitrust laws was was draft. At 646. Because various rules violated the verdict, By affirming Kapp’s challenge jury holding the court error. the court’s might possibility jury NFL trial court’s instructions had effect eliminated the suffer; verdict, cross-appeal accordingly, was affirming jury’s de- which found Kapp damaged by “illegal At re- clared and dismissed. 649-650. was not moot Fischer, history jority plaintiff, a contract. No rookie in assert: such had “Pat like a obtained such contract. The Redskins a signed was defensive back who originally a three-year had offered Smith Maj.Op. Actually, Redskins in 1968.” n.75. contract, fourth-year option, with a aat played positions men different as the $17,500 beginning salary lesser but with testimony Smith indicated.85 was a “free regular annual increases. Smith and his safety,” and Fischer was a “left corner- rejected agent had such offer in favor aof course, backs, back.” Of like defensive one-year contract, op- and one additional linemen are all “similar” defensive in some tion-year, $23,000 the higher salary respects, great there are also but dissimilar $5,000 performance inducement if he “made Cornerback, ities. aptly been stated squad.” $22,000 And a signing bonus game’s demanding position.”87 is “the most year $50,000. added —total The Left cornerback is a far more posi — difficult evidence shows that did not Smith want in today’s safety, tion than free defenses three-year salary, contract at a lesser it requires eligible pass to cover support finding does not that a greater receivers over area the field position, rookie, unproven Smith’s an would (from scrimmage the line of to the limit of be successful in obtaining a contract in a passer’s throwing ability), eligible which the compensation be guaran- generally required receivers are to cov for a three-year period. teed usually er are opponent’s fleetest and pass best receivers. Cornerbacks in also However, I am agree unable to variably passes have more thrown majority’s affirmance of the district court’s players they assigned are Saying cover. comparison produce with Pat Fischer to that Smith and played Fischer the same $54,000 annual salary of if the Smith back,” position, “defensive is almost as erro antitrust violation had not occurred. The saying neous as that all offensive backs district court compared his Smith with play position, same or that all Fischer, offensive teammate Pat and based Smith’s play position. linemen the same But salary on full that received Fischer in 1968. backs are quarterbacks same as my opinion, reasons, for a number of centers, wide ends are not equating the same as Smith with salary Fischer for pur- guards, poses etc. The wide clearly erroneous, differences between and I dissent safety majority’s may escape many from the and cornerback por- affirmance television viewers because TV rarely tion the trial court’s shows judgment. safety except just pass before a arrives in The trial court is in error when it states playing Actually positions his area. played that Fischer position the same running guard more like a and the back majority the is in error when find guard early in game. the basketball similarity sufficient to base his on salary addition, salary the facts paid respect position Fischer’s which Fischer, they term Smith and position.” a “similar Maj.Op., p. teams take into -, n.76 in salaries, of 193 consideration U.S.App.D.C. determining are so p. n.76 judge of 593 F.2d. The trial asserted different respects material that it could recognized “Fischer outstanding reasonably was as an not concluded that Smith was (plaintiff’s equivalent defensive back position)” and of Fischer. was se- Smith that he “looking compensation was at the as lected an All-American defense received top players in the league University Oregon, at the but the 1968 time, particularly that playing those his he was still a rookie with con- position or with the Redskins.”84 The ma- promise, siderable untested in F.Supp. Complete Football, 84. 420 at 747. 87. The Handbook of Pro Hollander, p. (Signet, 1976). J.A. 1069. Id. plain . as those of . as valuable own witness- plaintiff’s football. As one of tiff, and Cardinals es instead awarded testified: Redskins’ consisting of the compensation that he a record I think Pat Fischer had . . . . . . third second and Yazoo could stand behind [Jim Rather, .”89 . . . round draft prove in the something [choices] still had Smith] that the sense of Commis appears to me it NFL. testimony was that he con sioner Rozelle’s was a veteran corner- J.A. 1070. Fischer awarding two draft choices cluded that played eight He had back in NFL. equitable solution because was most Cardinals, had been with the Louis years St. was first round draft the Redskins’ Smith twice, had been selected as All-Pro great deal of fact carried choice such player” on Cardinals. “most valuable community.90 in the relations value public quali was a was proven Fischer play. position to fied at a more difficult Thus, variety for the above stated interceptions league pass His total view, reasons, clearly it was errone- my as befit an All- very impressive was court to base ous for the district Smith’s court asserted Pro trial at cornerback. assumption salary computation on that billing up to his advance played that Smith was Pat Fischer. comparable he argument safety, as a free but oral compara assuming Even was Smith intercept was admitted that Smith had Fischer, when takes into account ble one pass during 1968 season. single ed a fact selected a one- that Smith himself testimony reflects Smith one-year option with a year contract but, de good prospect athlete and a fine higher salary goes with a shorter promise that he demon spite the undoubted contract, contract, year instead of a three strated, leading when considers that one and that an untested rookie was averaged passes a Smith passers about 20 forward more, leagues games get it becomes clear that game,88 and ten unable Smith safety position really a free did not inter choice and playing made a conscious Smith roughly pass cept pass Smith, one out of damages. even under his suffered no es, play not indicate league actual does contract, $28,000 making his received outstanding performance in the most im signing squad playing in 196891 and a position portant duty required— that his $22,000, making compen his total bonus covering passes. forward $50,000 Fischer, for the first season. sation contract, two-year received who obtained testimony, By misinterpretation salary $30,000 per year signing and a flatly the trial court is also in error $48,000. salary is When Fischer’s bonus asserting that Rozelle . “Commissioner $54,000 annualized, he received for the 1968 determined that Fischer’s services were impasse clubs, sidering between the Encyc., two at 68. See my judgment equitable most solution 89. 420 at 749. going second and a third choice going from than St. Louis rather [Smith] transcript 90. The shows: Washington Louis. to St. [by you Mr. And felt Johnson]: Q negotiat- player’s J.A. 141. A value when he is Taylor plaintiff Charley were either or his ing he has been his and his value after contract right more to Pat worth than [exclusive] signed are not the draft choice a first-round Fisher’s services. Is that correct? [sic] signed, he all the he is reflects time, same. After [by A I did at Rozelle]: Mr. acquisition scouting his including led to considering costs all circumstances publicity already contemporaneous Charley Taylor value fact had es- having signed one of its Redskins and that tablished himself team that flows choice, was first draft Smith the Redskins’ choices. great public which a relations carried deal $23,000 salary paio Smith was in and was community. value in this performance $5000 bonus he a awarded J.A. 135. squad,” as “made Redskins set forth just A. I concluded on the basis of contract. J.A. 837. con- review I could make at that time that best, taking At account, season.92 Fischer that sum into received Smith re- $4,000 more than Smith —and this does substantially my In ceived more. view such into take account the fact that Smith facts reflect of damage an absence an untested rookie who not the equiva Smith. Fischer, of the proven lent nor does this agree I majority with the that the district take into account the fact that the Redskins determining damages court in con- should paid $19,800, Smith an additional sider evidence of “free market conditions.” what he would received in the next However, I find evidence is over- played season had out option. Smith his whelming that Smith would not have re- The obligation Redskins had no to make ceived more absent a draft than he actually Thus, payment to Smith. Smith actu did in receive with the draft effect. $69,800 ally playing received his first following table illustrates how the Redskins Notwithstanding disparity season. in compared average with the worth, of all NFL proven Smith’s Fischer’s Smith substantially received categories teams in same amount certain financial $19,800 as did ignored; Fischer if the 1968: (a) (b)

Redskins NFL All Teams

(Average)_ (GI) $3,964,085 $3,550,624

Gross Income Players Salaries 1,604,407 (40% GI)

& 1,369,422 Bonuses (39% GI) ( Operating 264,559 GI) Income 320,422 ( 7% of GI) 9% of 132,279 (c) Income 155,923 Before Taxes Provision for (c) Income Taxes 66.139 77.962 (c) Net Income 66.139 77.962 (a) J.A. 422.

(b) J.A. 617-18. (c) operating The Redskins’ statement did not include the amounts of these items. They estimated, accordingly average based on the of the other NFL teams. This seems since players’ reasonable exceed, Redskins salaries and their than, operating average income League is less of all teams. figures These Redskins, show that with the had Redskins and on average larger a gross average income than the teams, league just were the NFL they spent and that high about as go. could This was larger percentage of that sum on salaries even more true Redskin club which bonuses for average than the spent larger proportion gross of its reve- (40%, 39%).93 team the NFL opposed players’ nue on average salaries than comparative (id.) financial statements NFL team. Practically money all of the also demonstrate that if the NFL teams person expect reasonable operations were to base their on the amount players’ was devoted to salaries and bonuses revenues, of their actual players’ salaries average League the Redskins and Brig salary $26,000 92. 420 Owens was vet- 1965. He received a in 1968 eran who came to the Redskins in 1966 and did not think that Smith should have re- safety played strong from Dallas. he ceived more. J.A. 1056. was a He witness salary $21,000 plaintiff. defense and received a $2,000 Smith, Jerry bonus. J.A. 1063-65. end, pass-catching signed with the Redskins J.A. 617-18. bargaining,” not Thus, players was market would have not there a whether or team. advantage knowing, from the round would not players’ free market for services draft, they were what rela- as there selected appear significance, to be of much placed tive the team on their services. value money available not sufficient bargaining The absence of this factor would substantially players’ sala- pay more Smith, impair position of bargaining that were ries than the salaries and bonuses and his Thus a would work to detriment. had paid. Even if the Redskins de- being panacea free market would be the for remaining income before voted their entire players Smith and that trial court salaries, it would players’ taxes to envisioned. player. in a for each resulted small increase well might And have fared less with Smith Finally, it that Smith attacks seems ironic gross its pay a that as much of team did profited which he has system from so did the Redskins. players income to its above, As greatly. noted most Plus, the draft definite- given the fact that teams, indirectly players, being and ly competitive contributes to balance tremendously by the local com- subsidized teams, gate hence enhances their playing which furnish the facilities munities income, market, in a receipts and TV free games. for If the teams were re- with its attendant lack of bal- quired huge to finance and build the stadi- ance, money been there would have less they play pay ums in which local experi- players’ for available salaries thereon, money players’ for the taxes prior free mar- ence of NFL under greatly would be reduced. Most of salaries a ket criteria. If free conditions yet developed under the assessing dam- market is to be considered argued player damaged it is that a necessarily ages appraise the court must absence of a free market. Under the free suffered when a reduced income teams services, for there were players’ market circum- free market existed. Under such teams, salaries, few- greatly lowered fewer stances, perceive it is difficult to how Smith jobs stadi- players, er smaller fewer any damage by the contract his suffered ums, franchises, public shaky and far less agent signed. he negotiated (which extent it existed interest college foot- great preference showed Furthermore, there are additional reasons ball). might During period, player why testimony my view does not good team which lucky go with a conclusion that sal support trial court’s unlucky stay good might or he would necessarily “increase aries of stay go which would bad bad team . in a free market situation.”94 As That is what the evi- perhaps fold. above, might while a free market indicated shows. The NFL has been built its dence permit player play one team off inaugu- the draft was present status since negotiations, against salary another in of the draft was rated and the existence play against teams could also one off operations one the features of NFL one or several that were considered teams, new encouraged the creation of ability. competi near-equal to be of So, in suggested might. my it Mitehel players’ services tion between teams for the view, that he was proved has not Smith salaries could be might tend increase materially damaged the absence of the negotiating offset sever evils, small- free market with attendant selecting al the same time and players at stadiums, teams, smaller er less stable considered, team, everything what the de teams, crowds, profitable and a less fewer a free termined be the best deal. While television contract. market, a wider choice to a offers mobility also to a all are add- gives great deal more When of these considerations antitrust player negotiations. together, in its This would ed if there was an even violation, Also, agree I in “free- cannot Smith tend to decrease salaries. Thus, damaged thereby. ignore penses. It is a mistake to there were insufficient team draft, practical history reali- produce assets for a free market any operation objective ties its it has larger preponderance salaries. The through overly achieved and then re- evidence also indicates under a free interpretation apply a strictive law that by wealthy market few teams owned indi enterpris- was intended for normal business having special advantages viduals and other es to a sport unique operating charac- would benefit the exclusion of other teristics, Supreme I and do not find that the destroy teams—and thus require. Court’s decisions so strength balance is vital the overall League. revenues I also con Y. CONCLUSION clearly clude that it was erroneous for the district my salary computation In view the draft as it court existed compare they a violation of the Rule of Smith with Fischer because Reason illegal and therefore under the were both Sherman “defensive backs” when was, Act. played substantially positions Even the record reflects different damaged thereby, that Smith was not and of “free safety” and “cornerback.” I would sufficiently clear to make judgment therefore reverse the of the dis unnecessary. remand trict court and order case dismissed. To I respectfully end dissent.95 sum, conclude, unique I because of the nature of NFL football historical inauguration

reasons that led to the the 1968 NFL college player not unlawful under antitrust graduating players gener- laws. While ally required exceptions sign —with —to them, with the team that drafts the teams game the nature of the and the draft are al., Appellants, practically

also signing restricted to Keiko ASAI et drafted, players they have or else suffer the v. Also, loss very valuable draft choices. CASTILLO, Commissioner, Leonel J. Im- practice actual the draft allows con- migration & Naturalization Service. mobility. considerations, siderable Other above, discussed also indicate that the bar- al., Petitioners, Keiko ASAI et gaining positions graduating players, v. represented who are by agents great in a ATTORNEY GENERAL OF the UNITED many instances, hampered. are not For STATES, Respondent. reasons, these I believe that the draft within the Rule of Reason as outlined in 78-1781, Nos. 78-1843. Engineers. Appeals, United States Court of Even if the 1968 draft violated the anti- District Columbia Circuit. laws, trust I do not believe that Smith was damaged by any “anticompetitive evil.” Nov. Smith,

The record reflects that in 1968 Attorney’s On Motion for Costs and rookies, other would not have obtained Fees Feb. salary because, larger in a free market as it was, team completely revenues were almost

expended salaries, bonuses, for players’ benefits, operating for team ex- necessity league expansion

95. The in a or dis- was nowhere raised appeal. cussed at trial or on notes promissory Department Justice has ever for the balance sion the Nagurski Grange Red and validity player of a draft attacked the due on their salaries.25 any professional sport. adopted college player draft Bell,26 view, compelling In reasons of Bert after there are suggestion my 1935 at the why long the so with- (which finished the season as the continued Cincinnati challenge. Gunners), out In effect Louis the bottom serious St. sports. Competi- league draft is for had been forced Western Division natural league.27 among component tive teams is drop equality the then 10 team out of meaningful for adopted pure requirement was a an inherent The 1935 draft as squad Encyc., players Reds lost 27. at 28-29. The Cincinnati Minnesota on the small days got eight eight Bay straight games, the franchise carried those after Green (Hal Uram, Johnson, Every, Andy players Bill Bill to St. Louis. Van and some of the moved Kuusisto, Schultz, Buhler, games Larry played three dur- Charlie The St. Louis Gunners Svendson, Ency- George season, ing losing NFL Lou Midler —the two of the remainder being erroneously clopedia lists Midler as from franchise did not them. Id. The Reds-Gunners Northwestern, Encyc. 144), Id., all of I see whom at 29. return the 1935 season. initially since were freshmen had known high days, I and some their school said to from 28. J.A. 1345-46. Red, great many have a Minnesota “You “Yes, boys?” replied, like them.” I He we League, Kapp Football 29. v. National asked, you do about them?” then “What like (9th 1978), affirmed the F.2d the court Cir. minute, thought guess they replied, “I He jury on dam- trial court’s instructions just play like football.” lengthy ages. jury trial that found after a Kapp damaged prove been “could not he had J.A. 1796. by by general illegality rules used rules attacked NFL.” 648. One of the At 27; Encyc., J.A. 1345. college Kapp player draft. At 646. was the J.A. 1310. sports competition watching interested in or playing survival of a would be school, college, or league high conference seriously Spectators play- diminished. — all of its members.30 are slaughters ers not attached to athletic —and Close rivalries are the backbone of suc or to contests where the result is foreor- NFL sport. cessful When the established dained. objective give its was to each competitive lack balance What in a opportunity team the same fair com league do to spectator can attend petitive; sought a competitive to achieve during ance was demonstrated exist teams, among League’s balance all the ence the All-America Football Confer is, to “try equalize teams.”31 The ence and is out in record spelled here. intended result was create a situation In that League Cleveland Browns League game where each would become a out drawing coached Paul Brown started contest, spectator closer where interest 60,000 70,000 games. home people game themselves would increased, They every won championship year, where interesting individ ual interesting 20,- contests would create an their fell “attendance down to under race, League championship and where ulti said, “Oh, they 000” because the fans their mately the teams going to win anyway. What is the use of greater resulting benefit from the income going out This there?”32 absolute from the interest. increased fan answer to the league contention that can survive if equality A competing draft to achieve bal- Early explorers destroyed. always ance is teams is not new. There will be a American west employ- found the Indians league but constant losses ing a form of the draft in their game of many would cause areas to lose their fran shinny, played with curved sticks and a chises. Aborigines Minnesota, wooden ball. The major sports, All in recognition of the Society quotes (1911) Minnesota Historical balance, need for competitive have drafts. following description George P. Hockey33 drafts, and basketball have Belden, 37): (p. “The White Chief” baseball instituted a draft when it became young men go ... out on the [T]he long clear from domination the New prairie camp near the . . . [and]

Case Details

Case Name: James McCoy (Yazoo) Smith v. Pro Football, Inc., a Maryland Corporation, A/K/A Washington Redskins and the National Football League, (Two Cases)

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Feb 1, 1979

Citation: 593 F.2d 1173

Docket Number: 76-2135, 76-2136

Court Abbreviation: D.C. Cir.