DOES THE NBA STILL HAVE “MARKET POWER?

”
EXPLORING THE ANTITRUST IMPLICATIONS OF AN
INCREASINGLY GLOBAL MARKET FOR MEN’S
BASKETBALL PLAYER LABOR
Marc Edelman*

Most lawsuits challenging a sports league’s labor practices under Section

1 of the Sherman Act require the plaintiff to demonstrate “market power”
within some relevant geographic market.1
Courts historically have found sports leagues to exercise “market power”
within a national market for premier player labor.2 However, in the March
2002 case Fraser v. Major League Soccer, L.L.C.,3 the U.S. Court of
Appeals for the First Circuit upheld a jury finding that America’s twelve
Major League Soccer teams compete in an international market for

* Marc Edelman is a member of the faculty at Barry University’s Dwayne O. Andreas

School of Law in Orlando, Florida ([email protected]). Professor Edelman earned his
B.S. in economics from the Wharton School (University of Pennsylvania) and both his J.D.
and M.A. from the University of Michigan. The author wishes to thank the following students
for their research assistance: Brian Astrup, Corey Feldman, Ryan Haaz, Alex Jochym,
Michael O’Keefe, Andrew Ryan, Eric Sable, Andrew Seiken, and Joseph Zimmermann.
Professor Edelman retains full copyright to this article and has agreed to provide the Rutgers
Law Journal with an irrevocable license to publish, use, republish and redistribute this work.
1. See Marc Edelman & Brian Doyle, Antitrust and “Free Movement” Risks of
Expanding U.S. Professional Sports Leagues into Europe, 29 NW. J. INT’L L. & BUS. 403,
413–14 (2009) [hereinafter Edelman & Doyle, “Free Movement” Risks] (noting that under a
Rule of Reason scrutiny, a plaintiff must show that a defendant sports league has market
power and engages in practices yielding net anticompetitive effects and harm); Marc Edelman
& C. Keith Harrison, Analyzing the WNBA’s Mandatory Age/Education Policy from a Legal,
Culture, and Ethical Perspective: Women, Men, and the Professional Sports Landscape, 3
NW. J. L. & SOC. POL’Y 1, ¶ 39, at 13 (2008) [hereinafter Edelman & Harrison, WNBA’s
Policy] (same).
2. See Edelman & Harrison, WNBA’s Policy, supra note 1, ¶ 60, at 20 (2008).
3. 284 F.3d 47 (1st Cir. 2002).

549
550 RUTGERS LAW JOURNAL [Vol. 41:549

professional soccer labor, and thus these teams lack enough “market power”
to violate Section 1 of the Sherman Act.4
To date, Major League Soccer (“MLS”) is the only premier American
sports league that has been found to lack “market power” over its players’
services.5 However, as other American sports leagues begin to globalize,
they too may seek to invoke the “lack of market power” defense.6
The National Basketball Association (“NBA”) represents perhaps the
best test case for expanding the “lack of market power” defense.7 According
to information gathered from the website ESPN.com, NBA teams in 2008
lost between 10% and 16% of their workforce to foreign teams. (See Exhibit
I: Movement of NBA Free Agents, 2008–09).8 In addition, as of January
2011, 67 of the NBA’s 450 players (12.7% of the overall league population)
were both born and educated in foreign countries. (See Exhibits II, III, & IV:
2011 NBA Players from Overseas).9
This article examines whether, based on the recent globalization of the
men’s basketball player market, a court today could find NBA teams to
compete, in an antitrust sense, in an international market for men’s
professional basketball labor. Part I of this article discusses how antitrust law
applies to professional sports leagues, and explains why a sports league such
as the NBA might seek to argue, from an antitrust perspective, that its
players are part of an international labor market. Part II discusses the history

4. See id. at 63 (approving the district court’s jury instruction that the geographic
market was “the geographic area to which players can turn, as a practical matter, for alternate
opportunities for employment as professional soccer players.” (citations omitted) (internal
quotation marks omitted)).
5. See Brief for Defendants–Appellees Major League Soccer, L.L.C. at 18–19, Fraser
v. Major League Soccer, L.L.C., 284 F.3d 47 (1st Cir. 2002) (No. 01–1296), 2001 WL
36006544. Major League Soccer’s own counsel sought to differentiate MLS from other sports
leagues such as the National Basketball Association. Id.
6. See infra notes 67-70 and accompanying text.
7. See Annette John–Hall, Basketball in Italy: Not the Weak, Warn Ferry, Shaw,
SEATTLE TIMES, Nov. 12, 1989, at C2 (“Global expansion of professional basketball has been
forthcoming for years. Only soccer exceeds basketball as the world’s most popular sport.”).
8. See Player Movement 2008: Free Agents by Name, NBA (Oct. 3, 2008, 10:47 PM),
http://www.nba.com/transactions/movement2008_name.html (showing that during the 2008–
09 offseason, ten of the NBA’s ninety-eight free agents signed new contracts with foreign
teams (10.2% of total free agent pool)). When removing from this pool all of the NBA free
agents who ultimately re-signed with their former NBA team, the percentage of NBA free
agents who chose a foreign league over the NBA increases 10/61 or 16.4%. See also Henry
Abbott, Ex-Hornet Pargo Signs a One-Year, $3.5 Million Contract with Russian Club,
ESPN.COM, http://sports.espn.go.com/nba/news/story?id=3537498 (last visited Feb. 3, 2010).
9. See NBA Teams, ESPN.COM, http://espn.go.com/nba/teams (last visited Jan. 21,
2011); see also infra Exhibits II, III & IV.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 551

of professional basketball in both the U.S. and abroad. Part III describes the
differences between the NBA and foreign basketball leagues, and charts
player movement between U.S. and foreign leagues. Finally, Part IV
explores whether, based on information provided in Parts II and III of this
Article, a court could reasonably find there to be an international market for
premier men’s basketball labor.

I. APPLYING ANTITRUST LAW TO PROFESSIONAL SPORTS LEAGUES

A. Antitrust Basics

Section 1 of the Sherman Act, in pertinent part, states that “[e]very

contract, combination . . . or conspiracy, in the restraint of trade or commerce
. . . is declared to be illegal.”10 This section of antitrust law governs
agreements to fix prices, fix wages, allocate markets, and refuse to deal with
third parties.11
A court will determine whether a particular restraint violates Section 1 of
the Sherman Act by applying a three-step test.12 First, the court will
determine whether the restraint involves an agreement among two or more
parties that affects interstate commerce.13 Then, the court will determine

10. 26 Stat. 209 (1890) (codified as amended at 15 U.S.C. §§ 1–7 (2000)). Enacted in
1890, during the rise of big business, the Sherman Act was intended to serve both a political
and an economic purpose, and to prevent any one business from becoming more powerful
than the government overall. See Marc Edelman, Can Antitrust Law Save the Minnesota
Twins? Why Commissioner Selig's Contraction Plan Was Never a Sure Deal, 10 SPORTS LAW.
J. 45, 56–57 (2003) [hereinafter Edelman, Minnesota Twins].
11. See Edelman & Doyle, “Free Movement” Risks, supra note 1, at 412–13.
12. Marc Edelman, Are Commissioner Suspensions Really Any Different from Illegal
Group Boycotts? Analyzing Whether the NFL Personal Conduct Policy Illegally Restrains
Trade, 58 CATH. U. L. REV. 631, 640 (2009) [hereinafter Edelman, Commissioner
Suspensions].
13. Nat’l Hockey League Players Ass’n v. Plymouth Whalers Hockey Club, 419 F.3d
462, 469 (6th Cir. 2005) (citations omitted); McCreery Angus Farms v. Am. Angus Ass’n,
379 F. Supp. 1008, 1016–17 (S.D. Ill. 1974); Blalock v. Ladies Prof’l Golfers Ass’n, 359 F.
Supp. 1260, 1263 (N.D. Ga. 1973); Denver Rockets v. All-Pro Mgmt., Inc., 325 F. Supp.
1049, 1062 (C.D. Cal. 1971) (citing 15 U.S.C. § 1); Edelman, Commissioner Suspensions,
supra note 12, at 640.
552 RUTGERS LAW JOURNAL [Vol. 41:549

whether the restraint harms competition.14 Finally, the court will determine
whether any affirmative defense negates the finding of antitrust liability.15
In the context of a professional sport league, a court will determine
whether a particular restraint harms competition by applying the full Rule of
Reason test.16 This test requires that a plaintiff show three elements: market
power, net anticompetitive effects, and harm.17
Thereafter, a court will consider affirmative defenses.18 The affirmative
defense most likely to protect a sports league’s labor restraints from antitrust
liability is the non-statutory labor exemption, which precludes the finding of
antitrust liability against any restraint emerging through the proper workings
of collective bargaining.19 Where a players union does not agree to a
particular restraint, however, the non-statutory labor exemption generally
cannot apply.20

14. Edelman, Commissioner Suspensions, supra note 12, at 640; see also Edelman &
Harrison, WNBA’s Policy, supra note 1, ¶ 38–39, at 13.
15. See Edelman, Commissioner Suspensions, supra note 12 at 641; see also Edelman &
Harrison, WNBA’s Policy, supra note 1, ¶ 42, at 14 (citing PHILLIP AREEDA & LOUIS KAPLOW,
ANTITRUST ANALYSIS: PROBLEMS, TEXT, AND CASES 106–22 (5th ed. 1997)).
16. See Texaco Inc. v. Dagher, 547 U.S. 1, 7 (2006) (holding that unilateral decisions by
a legitimate joint venture are not per se unlawful and thus are more appropriately analyzed
under the Rule of Reason); see also Madison Square Garden v. Nat’l Hockey League, No. 07
CV 8455, 2008 WL 4547518, at *7 (S.D.N.Y. Oct. 10, 2008) (“[T]here is no suggestion that
the NHL is anything other than a legitimate joint venture.”); Brown v. Pro Football, Inc., No.
90–1071, 1992 WL 88039, at *8 (D.D.C. Mar. 10, 1992), rev’d on other grounds, 50 F.3d 104
(D.C. Cir. 1995) aff’d, 518 U.S. 231 (1996) (stating that it was undisputed by the parties that
the NFL is a joint venture); Smith v. Pro Football, Inc., 593 F.2d 1173, 1180–81 (D.C. Cir.
1978) (noting the joint-venture characteristics of the professional football industry).
17. See Edelman, Commissioner Suspensions, supra note 12, at 645; Edelman &
Harrison, WNBA’s Policy, supra note 1, ¶ 57, at 20. See generally Sullivan v. Nat’l Football
League, 34 F.3d 1091, 1111 (1st Cir. 1994) (noting that because Rule of Reason analysis
involves a detailed factual inquiry, and the subjective interpretation of these facts are made by
a jury, it may lead to “unforeseen currents and turbulence lying just below the surface of an
otherwise calm and peaceful ocean”).
18. Edelman, Commissioner Suspensions, supra note 12, at 641.
19. Edelman & Doyle, “Free Movement” Risks, supra note 1, at 415–16; see also
Edelman, Commissioner Suspensions, supra note 12, at 654–55 (noting that, more
specifically, there is a split in the circuits concerning how broadly the non-statutory labor
exemption applies). Courts in the Third, Sixth, Eighth and D.C. circuits hold that the
exemption applies only where an alleged restraint involves a mandatory subject of bargaining
that primarily affects the parties involved and is reached through bona fide, arm’s-length
bargaining; by contrast, the Second Circuit holds that the non-statutory labor exemption may
extend to any situation where the exemption's application would “ensure the successful
operation of the collective bargaining process.” Id. (citations omitted).
20. See McCourt v. Cal. Sports, Inc., 600 F.2d 1193, 1197–98 (6th Cir. 1979); Mackey
v. Nat’l Football League, 543 F.2d 606, 614 (8th Cir. 1976); Zimmerman v. Nat’l Football
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 553

B. Applying Antitrust Law to Agreements among Sports Teams

Applying the three-step test for antitrust liability, courts have found
various league-wide labor restraints, in the presence of market power and in
the absence of union approval, might violate Section 1 of the Sherman Act.21
Some of the restraints that courts have found illegal include salary caps, first-
year player drafts, and age/education requirements.22
Salary caps, which set the amount of money that teams may spend on
individual player salaries, have been found anticompetitive because they fix
players’ wages at a predetermined rate.23 In terms of their economic effect,
salary caps lead some players to receive contract offers for less than their fair
market value.24 Salary caps also lead some players to sign with teams that
otherwise would not have bid the most money for their services.
First-year player drafts, meanwhile, allocate negotiating rights to players
entering a sports league in “inverse order of the clubs’ standings” from the
previous season.25 Like salary caps, first-year player drafts have been found
anticompetitive because they assign only one team per league the right to bid

League, 632 F. Supp. 398, 403–04 (D.D.C. 1986); Phila. World Hockey Club, Inc. v. Phila.
Hockey Club, Inc., 351 F. Supp. 462, 498–99 (E.D. Pa. 1972). But see Clarett v. Nat’l
Football League, 369 F.3d 124, 142–43 (2d Cir. 2004) (finding the non-statutory labor
exemption to apply more broadly).
21. See infra notes 22-29 and accompanying text.
22. See Brown v. Pro Football, Inc., No. 90–1071, 1992 WL 88039, at *10 (D.D.C.
Mar. 10, 1992), rev’d on other grounds, 50 F.3d 10421 (D.C. Cir. 1995) aff’d, 518 U.S. 231
(1996); Smith v. Pro Football, Inc., 593 F.2d 1173, 1189 (D.C. Cir. 1978) (finding NFL draft
illegal); Denver Rockets v. All-Pro Mgmt., Inc., 325 F. Supp. 1049, 1066–67 (C.D. Cal. 1971)
(finding NBA age/education requirement illegal).
23. See Brown, 1992 WL 88039, at *5 (concluding that salary caps are subject to
antitrust law because they are “wage-fixing restraints which affect the labor market”); see also
United States v. Trenton Potteries Co., 273 U.S. 392, 401 (1927) (noting that uniform price
fixing is illegal, irrespective of the reasonableness of the prices actually set).
24. See Brown, 1992 WL 88039, at *9 (describing the effect of salary caps on player
labor markets).
25. Smith, 593 F.2d at 1175 (describing the NFL league draft); see also Edelman &
Doyle, “Free Movement” Risks, supra note 1, at 406–07 (footnotes omitted). As the authors
state:
Under both the NBA and NFL draft rules, the team with the poorest playing-field
record during the previous season has the first choice of a player seeking to enter the
league for the following season. The team with the next poorest record has the second
choice, and so on until the team with the best record has picked. After each team has
selected one player, the next round of drafting then begins in the same order as the
first. These rounds continue until an appropriate number of players is selected.
Id. (citations omitted).
554 RUTGERS LAW JOURNAL [Vol. 41:549

for each new player’s services.26 This kind of restraint represents the classic
illegal market allocation, as it “forces each seller of [his] services to deal
with one, and only one buyer, robbing the seller . . . of any real bargaining
power.”27
Finally, league-wide age/education requirements might violate Section 1
of the Sherman Act by preventing certain players from practicing their
profession within a given region.28 According to one court, age/education
requirements lead to three types of antitrust harm: players who would
otherwise enter a sports league become excluded; teams that would
otherwise sign these players become prohibited from doing so; and
consumers who may otherwise prefer to attend games featuring the excluded
players lose the ability to signal their preferences through their buying
behavior.29

C. Failed Attempts by Sports Leagues to Avoid Antitrust Liability

While collectively bargained labor restraints are generally insulated from

antitrust liability by the non-statutory labor exemption,30 antitrust law’s non-
statutory labor exemption does not apply to “unilaterally implemented labor
restraints” (those restraints that are implemented outside the scope of a
collective bargaining negotiation).31 Thus, in situations where a sports league

26. See Edelman & Doyle, “Free Movement” Risks, supra note 1, at 432 (citing Smith,
593 F.2d at 1185) (describing the anticompetitive nature of the NFL draft as it existed in
1968)).
27. See Smith, 593 F.2d at 1185; see also Trenton Potteries, 273 U.S. at 397 (“Sherman
Law . . . [is] based upon the assumption that the public interest is best protected from the evils
of monopoly and price control by the maintenance of competition.”).
28. See, e.g., Boris v. U.S. Football League, No. CV 83–4980, 1984 WL 894, at *1
(C.D. Cal. Feb. 28, 1984) (finding eligibility rule requiring five years to have lapsed since
player entered college to violate the Sherman Act); Linseman v. World Hockey Ass’n, 439 F.
Supp. 1315, 1325 (D. Conn. 1977) (determining that it was very likely that the World Hockey
Association’s twenty-year old rule would be held to be a “per se illegal” concerted boycott);
Denver Rockets v. All-Pro Mgmt., Inc., 325 F. Supp. 1049, 1061–62, 1064–66 (C.D. Cal.
1971). In this same vein, one may argue that league-wide personal conduct policies,
implemented outside of the scope of collective bargaining, also may be illegal, as the
economic effect there would be nearly identical. See Edelman, Commissioner Suspensions,
supra note 12, at 647–48.
29. Denver Rockets, 325 F. Supp. at 1060.
30. See Edelman & Doyle, “Free Movement” Risks, supra note 1, at 426–27, 434–35
(explaining that age/education requirements, drafts and reserve systems, when collectively
bargained, are often seen as exempt from antitrust liability).
31. See Zimmerman v. Nat’l Football League, 632 F. Supp. 398, 403–04 (D.D.C. 1986)
(explaining that the labor exemption will apply only when the agreement is “the product of
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 555

has unilaterally implemented a draft, salary cap or age/education

requirement, the league would need to rely on an alternate antitrust defense.32
Sports leagues historically have attempted to defend their unilaterally
implemented labor restraints by arguing one of the following defenses: (1)
the “not interstate commerce defense;” (2) the “pro-competitive effects
defense;” or (3) the “lack of two or more parties defense” (“single entity
defense”).33 However, recent courts have rejected applying each of these
three defenses in the context sports labor restraints.34

1. The “Not Interstate Commerce Defense”

The “not interstate commerce” defense emerges from early 1900s case
law, which had held that sports league activity is not “interstate commerce”
and thus not subject to scrutiny under Section 1 of the Sherman Act.35
Among this line of cases, the Supreme Court held in Federal Base Ball Club
of Baltimore v. National League of Professional Base Ball Clubs36 that the
act of “giving exhibitions of base ball” involved “purely state affairs” and
thus was exempt from Section 1 review.37
By the late 1930s, however, the Supreme Court had expanded its
definition of “interstate commerce” to include not only those activities with a
“direct” effect on interstate commerce, but also those with an “indirect
effect.”38 Today’s broadened definition of interstate commerce includes

bona fide, arm’s-length bargaining”); McCourt v. Cal. Sports, Inc., 600 F.2d 1193, 1198 (6th
Cir. 1979) (“[T]he policy favoring collective bargaining is furthered to the degree necessary to
override the antitrust laws only where the agreement sought to be exempted is the product of
bona fide arm’s-length bargaining.”); Mackey v. Nat’l Football League, 543 F.2d 606, 614
(8th Cir. 1976); Phila. World Hockey Club, Inc. v. Phila. Hockey Club, Inc., 351 F. Supp.
462, 499–500 (E.D. Pa. 1972). Note that the main exception to this general rule is where
collective bargaining has reached an impasse and the restraint imposed represents the last
good-faith offer, prior to impasse, by the league’s representatives through collective
bargaining. See Brown v. Pro Football Inc., 518 U.S. 231, 234 (1996) (finding that the labor
exemption applies to an agreement among football team owners to implement the terms of
their own last best bargaining offer after reaching impasse in negotiations with football
players).
32. See generally supra notes 15, 20 and accompanying text.
33. See discussion infra Part I.C.1–3.
34. See discussion infra Part I.C.1–3.
35. See Edelman, Minnesota Twins, supra note 10, at 48 (explaining the Supreme
Court’s early understanding that Major League Baseball did not involve interstate commerce).
36. 259 U.S. 200 (1922).
37. Id. at 208.
38. United States v. Lopez, 514 U.S. 549, 555 (1995) (citing NLRB v. Jones &
Laughlin Steel Corp., 301 U.S. 1, 36–38 (1937)).
556 RUTGERS LAW JOURNAL [Vol. 41:549

specifically those activities that “have such a close and substantial relation to
interstate commerce that their control is essential or appropriate to protect
that commerce from burdens and obstructions.”39
Applying today’s broader definition of “interstate commerce,” modern
courts consistently find sports league conduct to be within the definition of
“interstate commerce.”40 For instance, in the 1955 case United States v.
International Boxing Club of New York,41 the Supreme Court held that
championship boxing events affect interstate commerce because “over 25%
of the revenue from championship boxing is derived from interstate
operations through the sale of radio, television, and motion picture rights.”42
Similarly, in the 1957 case Radovich v. National Football League,43 the
Supreme Court held that the National Football League engages in interstate
commerce because a significant percentage of National Football League
revenue comes from radio and television transmissions across state lines.44
Meanwhile, in the 1971 case Haywood v. National Basketball Association,45
the Court implicitly presumed that NBA teams engage in interstate
commerce based on modern realities of the professional sports market.46
Thus, the “not interstate commerce defense” has largely fallen out of
sports antitrust discourse.47

39. Jones & Laughlin Steel Corp., 301 U.S. at 37.

40. See, e.g., Wickard v. Filburn, 317 U.S. 111, 122–24, 127–28 (1942) (finding
interstate commerce even where the relevant actor’s effect on such commerce is remote); see
also Edelman, Commissioner Suspensions, supra note 12, at 642 & n.65.
41. 348 U.S. 236 (1955).
42. Id. at 241.
43. 352 U.S. 445 (1957).
44. Id. at 453.
45. 401 U.S. 1204 (1971).
46. See Haywood v. Nat’l Basketball Ass’n, 401 U.S. 1204 (1971), reinstating Denver
Rockets v. All-Pro Mgmt., Inc., 325 F. Supp. 1049, 1055 (C.D. Cal. 1971) (“No professional
basketball team can be a member of the NBA League unless it is a member of NBA and no
member of NBA may engage in the business of professional basketball except in the NBA
League.”).
47. See Flood v. Kuhn, 407 U.S. 258, 282 (1972) (noting that while Major League
Baseball’s reserve clause has historically enjoyed an antitrust exemption under Federal Base
Ball, more recently the Court has even noted that the acts of staging professional baseball
games—like the acts of staging professional football and professional basketball games—
affect interstate commerce).
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 557

2. The “Pro-Competitive Effects Defense”

The “pro-competitive effects defense,” meanwhile, emerges from sports

leagues’ argument that their labor restraints improve market competition by
reducing costs and making their sport’s game scores closer together.48 Like
the “interstate commerce defense,” however, the pro-competitive effects
defense has been repeatedly rejected by the courts.49
With respect to sports leagues’ arguments that labor-side restraints are
pro-competitive because they save teams money,50 the Supreme Court held
as far back as the 1897 case United States v. Trans-Missouri Freight Ass’n51
that saving money is never a reasonable basis for concertedly restraining
trade.52 For example, in the 1940 case United States v. Socony–Vacuum Oil
Co.,53 the Court explained that if businesses were allowed to engage in
concerted restraints simply to save money “the Sherman Act would . . . be
emasculated.”54
Meanwhile, with respect to sports leagues’ arguments that their labor
restraints are pro-competitive because they make game scores closer
together,55 the Supreme Court has similarly rejected that view.56 Specifically,
in the 1978 case National Society of Professional Engineers v. United
States,57 the Court held that a proper Rule of Reason inquiry does not turn
“on a court’s intuitive judgment of whether a particular practice seems
sensible and equitable,” but rather on whether the restraint increases or

48. See, e.g., Brown v. Pro Football, Inc., No. 90–1071, 1992 WL 88039, at *9–10
(D.D.C. Mar. 10, 1992) (noting the NFL argued that salary caps were pro-competitive based
on positive impact on the on-the-field competition); Smith v. Pro Football, Inc., 593 F.2d
1173, 1186–87 (D.C. Cir. 1978) (making the same pro-competitive argument with respect to
first-year player drafts); Mackey v. Nat’l Football League, 543 F.2d 606, 621 (8th Cir. 1976)
(noting the NFL argued that its labor restraint would improve competitive balance, as well as
reduce player development costs).
49. See, e.g., Brown, 1992 WL 88039, at *10 (“The court finds that the NFL's alleged
pro-competitive purposes are either insufficient as a matter of law because they fail to justify
the necessity of the salary restraint or they are not relevant to the rule of reason analysis.”);
Smith, 593 F.2d at 1186–87; Mackey, 543 F.2d at 621–22.
50. See, e.g., Mackey, 543 F.2d at 621–22.
51. 166 U.S. 290 (1897).
52. Id. at 290, 315.
53. 310 U.S. 150 (1940).
54. Id. at 221.
55. See, e.g., Brown, 1992 WL 88039, at *9–10; Smith, 593 F.2d at 1186; Mackey, 543
F.2d at 621.
56. See infra notes 57–59 and accompanying text.
57. 435 U.S. 679 (1978).
558 RUTGERS LAW JOURNAL [Vol. 41:549

decreases competition in the same market as the alleged restraint.58 Thus, in

accordance with Professional Engineers, several lower courts have since
held that the issue of whether fans prefer sporting contests that are closer in
score is entirely irrelevant to a labor-side antitrust analysis.59

3. The “Single-Entity Defense”

Finally, the purported “single-entity defense” involves a sports league’s

argument that its conduct lies outside the scope of Section 1 of the Sherman
Act because an agreement among sports teams does not constitute a
“contract, combination . . . or conspiracy.”60 This is based on a broad reading
of the Supreme Court’s holding in Copperweld Corp. v. Independence Tube
Corp.—a case that narrowly held that a parent company and its wholly
owned subsidiary are incapable of conspiring under Section 1 of the Sherman
Act.61
Much like the two aforementioned defenses, however, the single entity
defense is almost certain to fail when applied to a traditional professional
sports league.62 While the Copperweld case has not been overturned, most
courts today recognize that its holding is narrowly tailored to the parent–
subsidiary relationship and does not apply to professional sports leagues,

58. PAUL C. WEILER & GARY R. ROBERTS, SPORTS & THE LAW: TEXT, CASES AND
PROBLEMS 42 (3d ed. 2004); see also Prof'l Eng’rs, 435 U.S. at 688 (“Contrary to its name,
the Rule [of Reason] does not open the field of antitrust inquiry to any argument in favor of a
challenged restraint that may fall within the realm of reason. Instead, it focuses directly on the
challenged restraint’s impact on competitive conditions.”). Note that the Court’s holding in
Professional Engineers overturned an older view, applied in some circuits, which prior to
1978 had considered broader public policy concerns in Rule of Reason analysis. See, e.g.,
Molinas v. Nat’l Basketball Ass’n, 190 F. Supp. 241, 243–44 (S.D.N.Y. 1961) (implying a
court could balance legitimate business reasons against anticompetitive effects); Chi. Bd. of
Trade v. United States, 246 U.S. 231, 241 (1918) (implying that shortening the work day or
limiting exacting work might have then been a pro-competitive benefit under the old Rule of
Reason).
59. See, e.g., Brown, 1992 WL 88039, at *10; Smith, 593 F.2d at 1186–87; Mackey, 543
F.2d at 621. But see Am. Needle Inc. v. Nat’l Football League, 130 S. Ct. 2201, 2217 (2010)
(noting that in the context of a product-side sports antitrust case, the Supreme Court has noted
“that the interest in maintaining a competitive balance among athletic teams is legitimate and
important.” (citations omitted) (internal quotation marks omitted)).
60. 26 Stat. 209 (1890) (codified as amended at 15 U.S.C. §§ 1–7 (2000)).
61. 467 U.S. 752, 771 (1984); see also Edelman, Commissioner Suspensions, supra note
12, at 642–44; Marc Edelman, Why the “Single Entity” Defense Can Never Apply to NFL
Clubs: A Primer on Property-Rights Theory in Professional Sports, 18 FORDHAM INTELL.
PROP. MEDIA & ENT. L.J. 891, 893 (2008) [hereinafter Edelman, Single Entity Defense].
62. See infra notes 63-66 and accompanying text.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 559

where individual team owners have divergent economic interests.63 For

instance, in the May 2010 case American Needle v. National Football
League,64 the Supreme Court held that the NFL’s league-wide trademark
licensing arrangement is subject to a full competitive review under Section 1
of the Sherman Act because each individual NFL team operates as a
“substantial, independently owned, and independently managed business,”65
and the NFL overall lacks “the unitary decisionmaking [sic] quality or the
single aggregation of economic power characteristic of independent
action.”66

D. The Lack of Market Power Defense: A Potential New Strategy

Given the weakness of each of the three above defenses,67 sports leagues
today are actively seeking new strategies to insulate their unilateral, labor-
side restraints from antitrust liability.68
Based on the increasing globalization of certain premier professional
sports leagues, as well as the First Circuit’s ruling in Fraser v. Major League
Soccer, LLC,69 there is a possibility that a sports league, such as the NBA,
will soon attempt to argue that it lacks “market power” within an
international labor market to violate Section 1 of the Sherman Act.70

63. See Edelman, Single Entity Defense, supra note 61, at 911–24 (noting competition
among team owners in a sports league for individual gate receipts, corporate proceeds,
broadcast revenues, licensing/merchandising fees, and Internet/new media revenues).
64. 130 S. Ct. 2201 (2010).
65. Id. at 2212.
66. Id.
67. See supra Part I.C.1–3.
68. See LISA PIKE MASTERALEXIS, CAROL A. BARR & MARY A. HUMS, PRINCIPLE AND
PRACTICE OF SPORTS MANAGEMENT 208 (Jones & Bartlett Publishers, LLC, 2009) (noting that
sports leagues attempt to structure themselves in a manner to “avoid antitrust liability”).
69. 284 F.3d 47 (1st Cir. 2002).
70. Historically, courts have defined “market power” as “the power to control prices or
exclude competition” within any relevant market, or, alternatively “the power to pay lower
than competitive wages … without having the sellers of those services [turn to another
employer].” E. THOMAS SULLIVAN & JEFFREY L. HARRISON, UNDERSTANDING ANTITRUST AND
ITS ECONOMIC IMPLICATIONS 27 (3d. ed. 1998) (quoting United States v. E.I. du Pont de
Nemours & Co., 351 U.S. 377, 391–92 (1956)); see also Edelman & Harrison, WNBA’s
Policy, supra note 1, ¶ 58, at 20; Fraser v. Major League Soccer, L.L.C., 284 F.3d 47, 62–63
(1st Cir. 2002) (noting these are the “standard instructions on market definition,” which track
the American Bar Association’s model jury instructions for civil antitrust cases); Ramallo
Bros. Printing, Inc. v. El Dia, Inc., 392 F. Supp. 2d 118, 132 (D.P.R. 2005) (noting that market
share analysis is appropriate absent “special circumstances”). See generally Toby G. Singer,
Proving the Relevant Antitrust Markets: Geographic Market, ALI–ABI 301, 307 (Dec. 12–13,
560 RUTGERS LAW JOURNAL [Vol. 41:549

Such an argument would require close scrutiny of the men’s professional

basketball marketplace.

II. THE MEN’S PROFESSIONAL BASKETBALL INDUSTRY

To evaluate whether NBA teams actually lack “market power” within an

international market for premier men’s basketball labor, it is helpful to first
understand the history of the men’s professional basketball industry.

A. Men’s Professional Basketball in the U.S.

1. The Early Years

The sport of basketball began in a Springfield, Massachusetts YMCA

during the winter of 1891.71 The game was created by a young gym teacher,
James Naismith, who developed basketball as a way to keep rowdy teenagers
organized despite the YMCA’s limited gymnasium space.72 Although
Naismith created basketball more for crowd control than business purposes,
the game rapidly developed a following.73 During the 1890s, many of
Naismith’s students even helped him to spread the game to YMCAs
throughout the East Coast.74
Basketball, in its early years, became most popular in the Mid-Atlantic
States, with YMCA members from Trenton, New Jersey forming the first
professional basketball team in 1898.75 During the beginning of the twentieth
century, basketball players from other East Coast cities then formed rival
teams to the one from Trenton.76 The most famous of these rival teams was
New York’s “original” Celtics, which during its peak in the 1920s competed

2002) (noting that in determining the scope of a geographic market there is great “importance
[in] analyzing the available evidence in a manner that is economically sound and rigorous,
consistent with applicable economic theory and, in many cases, consistent with the [U.S.
Department of Justice and Federal Trade Commission Horizontal] Merger Guidelines”).
71. See ROBERT W. PETERSON, CAGES TO JUMPSHOTS: PRO BASKETBALL’S EARLY YEARS
15 (1990).
72. Id.
73. Id. at 21–22.
74. Id.
75. Id. at 44. Indeed, the term “professional” applied very loosely, as these teams
received only very small sums of money. Id. at 43. For example, players on the team from
Trenton, New Jersey earned just $2.50 per home game and $1.25 per road game. Id.
76. Id. at 55.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 561

in 150 to 200 games per season.77 In the 1922–23 season, the “original”
Celtics garnered widespread attention by winning an unprecedented 90% of
their games, finishing with the astounding record of 193–11–1.78
During the 1930s and 1940s, some barnstorming basketball teams,
including the “original” Celtics, joined into leagues.79 Many of these early
leagues failed.80 However, two leagues survived.81 One surviving league, the
National Basketball League, was founded in 1937 by large Midwestern
companies such as General Electric, Firestone and Goodyear.82 The other,
the Basketball Association of America, was founded in 1946 by owners of
leading East Coast hockey arenas.83 On August 3, 1949, these two leagues
then merged together to form the National Basketball Association.84

2. Formative Years

Upon merging into a single league, NBA team-owners hired Yale Law
School graduate and practicing attorney Maurice Podoloff to serve as the
league’s first commissioner. Shortly thereafter, the NBA made a number of
important rule changes to help transition the game of basketball into a
revenue-driven business.85 One of the more important rule changes allowed
teams just 24 seconds from the start of their possession to shoot the
basketball.86 Introducing this 24-second short clock helped the NBA to
significantly increase the speed of their game.87 This led to a drastic increase
in attendance and thus greater league profits.88

77. Id. at 70.

78. See Original Celtics, WIKIPEDIA, http://en.wikipedia.org/wiki/Original_Celtics (last
visited Feb. 5, 2010).
79. See PETERSON, supra note 71, at 70.
80. See id.
81. See id.
82. See id. at 139 (noting that the National Basketball League included teams such as
the Minneapolis Lakers and Fort Wayne Pistons, and competed in a forty-four game season).
83. See Basketball Association of America, HOOPEDIA, http://hoopedia.nba.com/
index.php?title=BAA (last visited Mar. 30, 2011); DENNIS PURDY, KISS ’EM GOODBYE: AN
ESPN TREASURY OF FAILED, FORGOTTEN & DEPARTED TEAMS 249 (ESPN Books 2010)
(noting that the Basketball Association of America was founded by “a consortium of big city
hockey arena owners who wanted to maximize the profits from their arenas by adding
basketball games to their hockey schedules.”).
84. PETERSON, supra note 71, at 167; see also Maurice Podoloff, HOOPEDIA,
http://hoopedia.nba.com/index.php?title=Maurice_Podoloff (last visited June 11, 2009).
85. Maurice Podoloff, supra note 84.
86. Id. (noting this rule change took place in 1954).
87. Id.
88. Id.
562 RUTGERS LAW JOURNAL [Vol. 41:549

As the NBA further refined its game rules, NBA teams faced continued
competition from a number of rival, start-up leagues. The most successful
rival league was the American Basketball Association (“ABA”), which was
founded in 1967.89 The ABA teams, seeking to replace the NBA as
America’s premier basketball league, often induced bidding wars to sign
premier basketball talent.90
By the middle 1970s, however, NBA teams began to win the marketing
battle against the ABA teams, and many ABA teams suffered financial
hardship. Ultimately, in 1976, the U.S. District Court for the Southern
District of New York approved a plan to allow the four most successful ABA
teams to join the NBA.91 The remaining ABA teams then disbanded, leaving
the NBA again as America’s only premier men’s basketball league.

89. See Michelle Trachtenberg, History of the Dunk, NBA HOOPS ONLINE,
http://www.nbahoopsonline.com/Articles/2004-05/slamdunk.html (last visited May 12, 2010).
At first, the ABA attempted to differentiate itself from the NBA by using a red, white, and
blue basketball, emphasizing the slam dunk and three-point shots and placing teams in
regional markets. See ABA Profile: Give it 3 Points, Not 3 Stars, STAR–LEDGER (Newark, NJ),
June 5, 1997, at 71; see also Todd Jones, Dunking: The Thrill is Gone, COLUMBUS DISPATCH
(Ohio), Feb. 6, 1998, at 6G; 1967–68 Regular Season Standings and Playoff Results,
REMEMBER THE ABA, http://www.remembertheaba.com/PlayoffPages/1968Playoffs.html (last
visited May 12, 2010) (noting that the original ABA franchises included the following teams:
Pittsburgh Pipers; Minnesota Muskies; Indiana Pacers; Kentucky Colonels; New Jersey
Americans; New Orleans Buccaneers; Dallas Chaparrals; Denver Rockets; Houston
Mavericks; Anaheim Amigos; and Oakland Oaks).
90. See TERRY PLUTO, LOOSE BALLS 50–51 (1990) (noting that the ABA’s Oakland
Oaks offered Rick Barry a contract offer that included a 15% ownership stake in the team); id.
at 138 (noting that the ABA’s Indiana Pacers leased a Corvette sports car for their second-
round draft pick Bob Netolicky); id. at 62–63 (noting that a basketball rookie accepted a
$24,000 salary and $12,000 bonus from the ABA’s Minnesota Muskies rather than a $14,000
salary $12,000 bonus from the NBA’s Kansas City Royals); id. at 198 (noting that University
of Maryland center Len Elmore, who after his playing days went on to become outside
counsel to the NBA, signed a six-year, $1.335 million deal with the ABA’s Indiana Pacers,
which included use of two cars and deferred payments of essentially $100,000 per year for
fourteen years).
91. See Am. Basketball Ass’n Players Ass’n v. Nat’l Basketball Ass’n, 72 F.R.D. 594,
596 (S.D.N.Y. 1976) (noting that these teams included the Denver Nuggets, Indiana Pacers,
New York Nets, and San Antonio Spurs). The NBA expansion teams agreed to pay and
guarantee payment of the ABA contracts of various ABA players on the rosters of ABA teams
at the end of the 1975–76 season that did not secure NBA employment for the 1977 season.
Id.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 563

3. NBA Dominance

Since 1976, the NBA has emerged as the dominant men’s basketball
league in the United States, with competition for premier men’s basketball
players’ services limited primarily to teams within the league.92
Under the leadership of NBA Commissioner David Stern, the NBA
teams over the past 30 years have used their dominance to implement,
through collective bargaining, a number of labor-side restraints that reduce
the level of intra-league bidding for individual player’s services.93 The first
of these collectively bargained labor restraints was the NBA salary cap,
which the NBA and National Basketball Players Association (“NBPA”)
negotiated initially in 1983.94 The original NBA salary cap limited team
payrolls to between 53% and 57% of the NBA’s gross revenues.95 Despite
some changes over the years to the cap’s formulaic aspects, the NBA salary
cap has since remained an important part of the NBA’s collective bargaining
agreement.96
In January 1999, the NBA teams then imposed, through collective
bargaining, a slotted salary system, which sets the salaries of the league’s
more junior players based on their number of years in the league and their
order of draft selection.97 The slotted salary system further reduced labor
market competition among NBA teams by removing the incentive for NBA
players to holdout in hopes of securing a trade to another NBA team that
would pay a higher salary.98

92. Cf. John–Hall, supra note 7, at C2 (“Through most of this decade, the NBA has
reported record revenues and increased popularity.”).
93. See Michael A. McCann, The Reckless Pursuit of Dominion: A Situational Analysis
of the NBA and Diminishing Player Autonomy, 8 U. PA. J. LAB. & EMP. L. 819, 822–23 (2006).
See generally Jack F. Williams, The Coming Revenue Revolution in Sports, 42 WILLAMETTE
L. REV. 669, 672–73 (2006) (pointing out that the sports business industry today generates
over approximately $213 billion in revenue, which makes it twice the size of the automobile
industry).
94. See McCann, supra note 93, at 823; Matthew Epps, Comment, Full Court Press:
How Collective Bargaining Weakened the NBA’s Competitive Edge in a Globalized Sport,
VILL. SPORTS & ENT. L.J. 343, 353–54 (2009) (“Since the mid-1980s, the owners have
successfully advocated the inclusion of a salary cap limiting the amount any team in the NBA
could spend on its collective salaries.”).
95. See McCann, supra note 93, at 822–23.
96. See id. at 823.
97. See Answers to Your Lockout Questions, TIMES–PICAYUNE (New Orleans, La), Jan.
7, 1999, at 2D.
98. See Bob Keisser, Gentry Hiring Isn’t a Winner, LONG BEACH PRESS–TELEGRAM,
Aug. 12, 2000, at B1, available at 2000 WLNR 1351490 (noting that the NBA’s slotted salary
564 RUTGERS LAW JOURNAL [Vol. 41:549

Then, in 2005, the NBA added an age/education requirement to keep

certain prospective players altogether out of the league.99 Like the NBA
salary cap and slotted salary arrangement, the NBA age/education
requirement was reached through collective bargaining with the NBPA.100
However, recently the NBPA has seemed to waiver in its support of this
age/education requirement, perhaps realizing that the age/education
requirement places the union at some risk of violating its duty of fair
representation.101

4. Backlash

While an antitrust challenge to any of the NBA’s league-wide labor

restraints would be difficult due to these restraints’ collectively bargained
nature, some NBA players beginning in the late 1980s started to explore
opportunities to leave the NBA in favor of foreign leagues.102
To date, no NBA superstar in his prime has left the NBA in favor of a
foreign opportunity. However, recently Miami Heat forward LeBron James
and Los Angeles Lakers guard Kobe Bryant each have admitted that, for
enough money, they would consider joining a foreign league where they
would not be financially limited by these collectively bargained restraints.103

system provides “cost containment” because teams will not compete on salaries for players
during their first four years in the league).
99. Epps, supra note 94, at 353–54 (discussing the NBA’s negotiating of an
age/education requirement into the 2005 collective bargaining agreement).
100. Id.
101. See Edelman, Commissioner Suspensions, supra note 12, at 657 (discussing
union’s duty of fair representation in professional sports context); see also Vaca v. Sipes, 386
U.S. 171, 190 (1967) (“A breach of the statutory duty of fair representation occurs only when
a union’s conduct toward a member of the collective bargaining unit is arbitrary,
discriminatory, or in bad faith.”); Peterson v. Kennedy, 771 F.2d 1244, 1253 (9th Cir. 1985)
(explaining the union duty of fair representation).
102 See John–Hall, supra note 7, at C2 (discussing basketball player Brian Shaw citing
the NBA salary cap and other labor market restraints inducing him to play in Italy).
103 See J.A. Adande, With NBA Salaries Capped, Superstars Like Kobe Eye European
Riches, ESPN.COM (Aug. 9, 2008), http://sports.espn.go.com/nba/columns/
story?columnist=adande_ja&page=eurodraw-080809 (last visited Feb. 7, 2010); see also
Chris Broussard, Source: LeBron Would Consider European Offer of $50M a Year or More,
ESPN.COM, Aug. 6, 2008, http://sports.espn.go.com/nba/news/story?id=3520860 (last visited
Feb. 7, 2010); Alan C. Milstein, Kobe, SPORTS LAW BLOG (Sept. 20, 2008, 2:15 PM),
http://sports-law.blogspot.com/2008/09/kob.html; Marc J. Spears, Kobe to Italy?, CELTICS
BLOG (Aug. 8, 2008, 12:37 AM) http://www.boston.com/sports/basketball/celtics/extras/
celtics_blog/2008/08/kobe_to_italy.html (indicating that Kobe Bryant mentioned that he could
easily adopt to playing basketball in Europe because he has friends and family there from
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 565

In addition, some lesser known NBA players have recently rebuffed offers
from NBA teams in favor of international opportunities.104

B. Men’s Professional Basketball in the Rest of the World

The increasing number of opportunities for American basketball players

overseas is not surprising, as basketball today is almost as popular abroad as
it is in the U.S.
The game of basketball first made its way to Europe in 1893, when
Christian missionaries from the YMCA brought the game to Paris, France.105
Then, in 1932, representatives from eight nations (but not the United States)
formed basketball’s first international governing body, the Fédération
Internationale de Basketball (“FIBA”).106
In 1957, FIBA founded the first premier international basketball league,
the Euroleague, which consisted of teams from European, Middle Eastern
and Soviet teams.107 Initially, Euroleague competition was dominated by
Soviet teams, with Latvia’s ASK Riga winning the league’s first four
Champions’ Cups, and teams from Moscow and Georgia winning the next

having lived overseas during his childhood); Marc J. Spears, Europe Can Reach for Stars,
BOS. GLOBE, Aug. 10, 2008, available at http://www.boston.com/sports/basketball/
articles/2008/08/10/europe_can_reach_for_stars (noting that a team in the Russian
Superleague has already contacted James, although no monetary terms have yet been
discussed); Ian Thomsen, Greek Team May Take $eriou$ Run at LeBron After 2010 Season,
SPORTS ILLUSTRATED.COM, Aug. 1, 2008, http://sportsillustrated.cnn.com/2008/writers/
ian_thomsen/08/01/LeBron.greece/index.html (last visited Feb. 8, 2010).
104. See discussion infra Part II.B.
105. History of Basketball in Europe, FIBA EUROPE, http://www.fibaeurope.com/
cid_BiFUQinLGrAPQAGX1btZg0.html (last visited May 12, 2010); see ELLIOT GORN &
WARREN GOLDSTEIN, A BRIEF HISTORY OF AMERICAN SPORTS 173 (Eric Foner, ed. 1993); see
also PETERSON, supra note 71, at 24 (noting that the game was organized by a group of
Christian missionaries from the YMCA).
106. FIBA History, FIBA.COM, http://www.fiba.com/pages/eng/fc/FIBA/fibaHist/
p/openNodeIDs/987/selNodeID/987/fibaHist.html (last visited May 20, 2010) (noting that the
founding nations of FIBA included Argentina, Czechoslovakia, Greece, Italy, Latvia,
Portugal, Romania, and Switzerland).
107. See The Euroleague History Archive, EUROLEAGUE BASKETBALL,
http://www.euroleague.net/item/16117 (last visited Feb. 15, 2010); see also FIBA EUROPE,
http://www.fibaeurope.com/cid_f43ulKJBGLcVnbH-
aqLVu2._.compID_,Uz02qBnJiADOq5VntEf53.html (noting that the full list of SuproLeague
teams included: Maccabi Tel Aviv, Panathinaikos Athens, Efes Pilsen Istanbul, CSKA
Moscow, KK Split, Scavolini Pesaro, ALBA Berlin, ASVEL Villeurbanne, Ulker Istanbul,
Partizan Belgrade, Iraklis Thessalonki, Elan Bearnais Pau–Orthez, Lietuvos Rytas Vilnius,
Telindus BC Oostende, KK Krka Novo Mesto, Slask Wrocklaw, Montepaschi Siena, Bayer
Leverkusen 04 TSV, Maccabi Ironi Ra’anana, and Plannja Basket Lulea).
566 RUTGERS LAW JOURNAL [Vol. 41:549

three.108 However, by the mid-1960s, teams from Western Europe had

largely surpassed the Soviet teams, beginning with the Spanish team Real
Madrid’s 1963–64 Champions’ Cup win over the Czechoslovakian team
Spartak of Brno.109 During the 1970s, Real Madrid went on to win six more
Cups, with Real Madrid’s closest rivals during this period becoming the
Italian team Ignis Varése and the Israeli team Maccabi Tel Aviv.110
Then, in the 1980s and 1990s, Croatian, Serbian and Greek basketball
teams joined the Spanish, Italians and Israelis as the Euroleague’s elite. One
Greek team that became especially strong during the 1990s was the Athens-
based Panathinaikos, which was purchased in 1987 by the Giannakopoulos
family—a Greek family that owned the pharmaceutical giant Vianex.111
Beginning in the late 1980s, Panathinaikos began to occasionally sign former
NBA superstars at the tail end of their career such as former Atlanta Hawks
forward Dominique Wilkins and former Los Angeles Lakers guard Byron
Scott.112 During this era, other Euroleague teams such as Rome’s Il
Messaggero also began to pursue American talent, including some players in
the prime of their careers.113
In the summer of 2000, European basketball took a temporary step
backward when a group of entrepreneurs from the region formed a rival
league known as the Union of European Basketball Leagues (“ULEB”).114
ULEB’s founders induced some of the top teams from Spain, Italy and
France to leave FIBA’s Euroleague and to join the new league.115 In doing

108. European Club Champions: 1958–2008, EUROLEAGUE BASKETBALL,

http://www.euroleague.net/news/i/11836/180/item (last visited Feb. 15, 2010).
109. Euroleague History Archive, EUROLEAGUE BASKETBALL,
http://www.euroleague.net/history/50-years/the-archive/i/16116/1609/the-sixties (last visited
Feb. 7, 2010).
110. See Euroleague Basketball, WIKIPEDIA, http://en.wikipedia.org/wiki/
Euroleague_Basketball (last visited Feb. 7, 2011).
111 See Allon Sinai, Saras leaves NBA for Panathinaikos, JERUSALEM POST, Sept. 26,
2007, at 12.
112. See Panathinaikos BC, WIKIPEDIA, http://en.wikipedia.org/wiki/
Panathinaikos_BC (last visited Feb. 7, 2010); see also Sinai, Saras leaves NBA for
Panathinaikos, supra note 111, at 12 (discussing how Panathinaikos has the cash flow to sign
premier American players).
113. See Terry Pluto, Shaw is Coming Back, but Ferry is Still in Limbo, AKRON
BEACON J., Mar. 1, 1990, at C1.
114. See Sporting Digest: Basketball, INDEPENDENT (United Kingdom), Jul. 17, 2000,
available at 2000 WLNR 5899185.
115. ULEB History, UNION OF EUROPEAN LEAGUES OF BASKETBALL,
http://www.uleb.net/history1.htm (last visited Aug. 14, 2010).
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 567

so, ULEB diluted the talent pool of both leagues.116 With weaker
competition, the desire of top European teams to import talent from overseas
declined.
However, by 2002–03, the FIBA and ULEB basketball leagues had
merged back together.117 The merged league, as it exists today, includes a
premier conference with four divisions of six teams each, as well as many
subordinate leagues on the national level that promote their most successful
teams into the Euroleague.118 Many of Europe’s top basketball teams today
compete in both their national league and in Euroleague play.
Since the 2002–03 merger, three different teams have each won two
Euroleague Champions’ Cups: Maccabi Tel Aviv (Israel); CSKA Moscow
(Russia); and Panathinaikos (Greece).119 A fourth team, FC Barcelona, has
won one Cup.120 With each of these teams seeking to become the league’s
new powerhouse, there also is emerging interest among these teams to recruit
premier American talent.121

III. MODERN PROFESSIONAL BASKETBALL AND THE MOVEMENT OF

PLAYERS BETWEEN LEAGUES

A. Comparing Modern Euroleague Basketball to the NBA

In today’s modern era, the NBA and Euroleague serve as the world’s two
premier professional basketball leagues.122 In some ways, these leagues are
quite similar. Both leagues consist of teams that compete in a regular season,
followed by playoffs and a league championship.123 In addition, both leagues

116. See Euroleague Basketball, supra note 110.

117. See Mark Hayes, Rival European Leagues to Merge, USA TODAY, Apr. 5, 2001,
at 2B, available at 2001 WLNR 3778220; see also Horse Racing to Resume after Foot-and-
Mouth Hiatus, SAN JOSE MERCURY NEWS, Apr. 5, 2001, at 2D (“Two European basketball
leagues will merge, forming a new group of 32 top clubs that will begin play this fall and be
known as the Euroleague. The agreement follows talks between the international basketball
federation (FIBA) and the Union of European Basketball Leagues (ULEB).”).
118. Euroleague 2009–10 Competition System, EUROLEAGUE BASKETBALL,
http://www.euroleague.net/competition/format (last visited June 29, 2009).
119. Euroleague Basketball, supra note 110.
120. Id.
121. See discussion infra Part III.B.
122. See Tom Jones, Biggest Outside America, ST. PETERSBURG TIMES, Jul. 19, 2009,
at 2C (noting that Euroleague basketball “is nearly as good as in the United States”); Greg
Boeck, No Longer a World Apart, USA TODAY, Apr. 20, 2006, at 3C.
123. See Mark Woods, Childress Discovers a World of Difference, ATLANTA J.–
CONST., May 2, 2009, at C2 (discussing Euroleague playoffs and championships).
568 RUTGERS LAW JOURNAL [Vol. 41:549

host their games in arenas that hold upwards of 10,000 fans, and both
broadcast their games on either local or national television networks.124
However, in other respects, the leagues are different. Most notably the
Euroleague operates under a pyramid structure that features a merit-based
promotion and relegation system.125 Under this structure, Euroleague teams
are promoted from regional leagues, as well as demoted from the
Euroleague, based on a combination of game results and business
performance.126 Also, under this pyramid structure, new players seeking to
join the Euroleague may sign with any team of their choosing without being
restrained by a mandatory first-year player draft, salary cap, or age/education
requirement.127
The length of the NBA and Euroleague seasons are also different.
European teams play approximately half as many games per season,
including the games they play within their local league.128 Euroleague teams
also typically have more off days in between games.129
With respect to overall player demographics, 87.3% of the NBA players
were either born or attended college in the United States;130 whereas a
majority of Euroleague players are originally from Europe.131 The NBA
additionally does not limit its number of foreign players; however some of
the feeder leagues into the Euroleague have quotas on the number of players

124. See Woods, supra note 123 (noting that “a capacity crowd of 15,000 fans
gathered to watch the semifinals of the Euroleague playoffs.”); c.f. Frankie Sachs, Israeli
‘Super Cup’ on the Line Tonight, JERUSALEM POST, May 6, 2004, available at 2004 WLNR
236972 (discussing crowds of approximately 10,000 at Israeli basketball game).
125. Edelman & Doyle, “Free Movement” Risks, supra note 1, at 408–10 (discussing
how the pyramid sports structure is the predominant European structure).
126. See ULEB League Rankings, WIKIPEDIA, http://en.wikipedia.org/
wiki/ULEB_League_Rankings (last visited May 12, 2010) (noting that business performance
is judged based upon in terms of television revenues/rating, attendance figures, and arena
capacities).
127. Edelman & Doyle, “Free Movement” Risks, supra note 1, at 409 (“European
sports leagues also do not require players to enter a first-year player draft. Instead, prospective
European professional athletes are allowed to sign their first contract with any team of their
choosing, at any salary they can obtain on the free market.”).
128. See Ian Whittell, Can Europe Afford the NBA’s Biggest Stars?, ESPN.COM (Aug.
27, 2008), http://sports.espn.go.com/nba/columns/story?page=nba-europe-080827; see also
John–Hall, supra note 7, at C2 (noting that Italian teams practice “twice a day for one game a
week”).
129. See John–Hall, supra note 7, at C2.
130. See supra note 9 and accompanying text.
131. Cf. supra note 128 and accompanying text.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 569

they allow from non-European Union countries. (See Exhibit V: International

Basketball League Quotas on Non-EU Countries).132
Finally, in terms of player salaries, NBA teams generally pay more per
season to their players than Euroleague teams, with NBA team salaries
ranging between $55.8 million (Oklahoma Thunder) and $91.4 million (Los
Angeles Lakers),133 as compared to Euroleague team salaries that range
between $3.12 million (Red Star Belgrade) and $50 million (CSKA
Moscow).134 It is worth noting, however, that on a per game basis some
Euroleague teams actually pay higher salaries to their players than do their
American counterparts.135

B. Movement of American-Born Professional Basketball Players to Teams

Outside of the United States

Despite important differences in structure between U.S. and international

basketball leagues, recent seasons have seen steady growth in the number of
American basketball players that have accepted employment in foreign
leagues, with more than sixty former NBA players now listed on foreign
team rosters.136

1. Early Opportunities for American Basketball Players to Compete

Abroad

When the Euroleague was first founded in 1957, the Euroleague featured
just a few American players, most of whom were unable to make NBA team

132. See Euroleague Domestic Competitions, EUROLEAGUE BASKETBALL,

http://www.euroleague.net/uleb/domestic-leagues/domestic-leagues-2007-2008/main (last
visited May 12, 2010) (reviewing European domestic leagues and providing links to
individual countries’ basketball websites, follow individual country hyperlinks for specific
scores).
133. See Oklahoma City Thunder Roster - 2010-11, ESPN.COM, http://espn.go.com/
nba/team/roster/_/name/okc/oklahoma-city-thunder (last visited Apr. 18, 2011) (listing the
Oklahoma City roster and salary information for the 2010-11 season); Dave McMenamin, Not
Adding Up: Rumors of Lakers' Trades Don't Make Sense on the Books,
ESPNLOSANGELES.COM (Feb. 16, 2010, 1:09 PM), http://sports.espn.go.com/los-angeles/nba/
columns/story?id=4917784.
134. Whittell, supra note 128.
135. Epps, supra note 94, at 363; see also Jon Saraceno, Playing Overseas Growing in
Status; But Don’t Expect to See NBA Stars, USA TODAY, Aug. 21, 2008, at 14C (noting the
lack of salary cap in the Euroleague).
136. See discussion infra Part III.B.2.
570 RUTGERS LAW JOURNAL [Vol. 41:549

rosters.137 Eight years later, in 1965, Princeton University All-American Bill

Bradley became the first premier American to play overseas when, while
completing a Rhodes Scholarship at Oxford University, he led Olimpia
Milano to the Europeans Cup.138 Bradley, however, only played in the
Euroleague for one season.139 After that, he returned to the United States to
pursue a basketball career with the NBA’s New York Knickerbockers.140
In the 1970s and 1980s, a few other former NBA All-Stars joined the
Euroleague, such as Bob McAdoo.141 However, these players entered the
league primarily at the end of their careers, after NBA teams were no longer
interested.142
Then, in the summer of 1989, the Roman team Il Messaggero took notice
that some young NBA players had become frustrated with how the NBA
salary cap, coupled with the first-year player draft, was restraining their pay
opportunities.143 Sensing this frustration, Il Messaggero’s owners began to
target young American players who were seemingly mired in contract
disputes with their NBA teams.144

137. See Glen Rogers, NBA Talent Search Goes Global, SAN ANTONIO EXPRESS–
NEWS, Feb. 10, 2002, at 19C; see also Marlon Manuel, Carr ‘Weights’ for his Chance Without
Worry, ATLANTA J.–CONST., Aug. 4, 1989, at F9. See generally Euroleague All Time Player
Nominees, EUROLEAGUE BASKETBALL, http://www.euroleague.net/history/50-years/player-
nominees (last visited May 12, 2010) (noting that some of the best American players who
competed in Europe during the 1960s and 1970s due to lack of opportunities for them in the
United States included the following: Miles Aiken; Wayne Brabender; Tal Brody; Mike
D’Antioni; Bruce Flowers; Clarence Kea; Clifford Luyk; Kevin Magee; Bob Morse; Audie
Norris; Aulcie Perry; Walter Szczerbiak Sr.; Corny Thompson; and Michael Young).
138. Barton Gellman & Dale Russakoff, A Private Journey Comes Full Circle:
Rebellion and Return—Part 3 of 6, WASH. POST, Dec. 14, 1999, http://www.billbradley.com/
assets/PDF/Washington%20Post%20Series%20-%203%20of%206.pdf.; see also Frank Isola,
For Knicks, An Italian Accent, N.Y. DAILY NEWS, Oct. 1, 2010, at 78.
139. Sekou Smith, Migratory Hawk: Josh Childress Leaves NBA for Greece,
ATLANTA J.–CONST., Jul. 24, 2008, at C1.
140. Id.
141. See Roy S. Johnson, McAdoo is Enjoying Success in Europe, N.Y. TIMES, Oct.
24, 1987, at 158 (describing Bob McAdoo’s success in the Euroleague); Smith, supra note
139, at C1 (noting that Dominique Wilkins was the 1996 Euroleague Most Valuable Player,
having averaged 20.1 points in 17 games).
142. See Bob Ford, Salary Cap Brings Bad with the Good, CHICAGO TRIBUNE, Nov.
27, 1988, at 9 (“Of the 36 who qualified for unrestricted free agency this year, 14 signed with
new teams, 7 signed with their previous teams and 15-mostly end-of-the bench, end-of-the-
line players-went to Europe.”).
143. See Terry Pluto, Shaw is Coming Back, but Ferry is Still in Limbo, AKRON
BEACON J., Mar. 1, 1990, at C1.
144. See id.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 571

As a result of these U.S. recruiting efforts, Il Messaggero in the summer

of 1989 signed two premier American players.145 First, on August 1, 1989, Il
Messaggero signed rookie forward Danny Ferry to a one-year contract worth
$2 million, or double the amount that the NBA’s Los Angeles Clippers had
offered to pay him.146 Then, eight days later, Il Messaggero signed second-
year American point guard Brian Shaw to a contract worth $2 million, or
four times the amount the Boston Celtics had offered to him.147
While both Ferry and Shaw decided to return to the United States after
the 1989–90 season, Il Messaggero did not give up on its pursuit of NBA-
caliber players.148 The following season, Il Messaggero signed twelve-year
NBA veteran Michael Cooper,149 as well as Croatia’s Dino Radja, who at the
time was considering leaving his home team, Jugoplastika Split, in favor of
the NBA’s Boston Celtics.150 Then, in early 1992, Il Messaggero added

145. See infra notes 146-147 and accompanying text.

146. See L.C. Johnson, Finding His Range in His Fifth Season With the Cavs, Danny
Ferry is Playing More, and Better, CLEV. PLAIN DEALER, Jan. 15, 1995, at 1D; see also Frank
Dell’Apa, Il Messaggero Offer Too Tantalizing, BOS. GLOBE, Aug. 11, 1989, at 69; Manuel,
supra note 137 (noting that Ferry “signed a five-year contract Tuesday with Messaggero
Rome of the Italian basketball league that will pay him in excess of $1 million this season.
Ferry can break the contract after each season to return to the NBA.”); David Moore, Stern
Sees Benefits of Foreign Invasion, DALL. MORNING NEWS, Sept. 24, 1989, at 14B.
147. Frank Dell’Apa, Shaw Going to Italy?, BOS. GLOBE, Aug. 10, 1989, at 41; Pluto,
supra note 144 (noting that during the late stages of Il Messaggero’s negotiations with Shaw,
Celtics General Manager Jan Volk was quoted it jest saying, “[t]ell Brian to brush up on his
Italian”); see also Frank Dell’Apa, Shaw was a Pioneer: He Helped Pave Way to Europe,
BOS. GLOBE, Dec. 21, 1999, at E6 (noting that, in an interview over ten years later, Shaw told
a reporter from the Boston Globe that “[a]t that time, guys normally went overseas at the end
of their NBA career or they were the last one released by the team[; however my] situation
was different. I had started a lot of games and I was an integral part of the [Celtics at the
time]”).
148. See Sam Goldaper, Basketball; Once Teammates in Rome, Now N.B.A. Foes,
N.Y. TIMES, Nov. 2, 1990, at B9 (noting before the start of the 1990–91 NBA season Ferry
signed a contract for $34 million over ten years); Jackie MacMullan & Frank Dell’Apa, Shaw
at a Loss Appeals Court Turns Down Guard’s Request, BOS. GLOBE, July 17, 1990, at 23
(Shaw must honor the five-year, $6.2 million contract he signed with the Celtics in [1990]).
149. Cooper signed a two-year contract with Il Messaggero Roma. The terms were not
disclosed, but Cooper is reportedly making more than his 1989–90 NBA salary of $600,000.
See Il Messaggero Signs Cooper for Two Years, L.A. TIMES, Aug. 19, 1990, at 14,; see also
Former Laker Star Cooper Riding Italian Roller-Coaster, CHI. TRIBUNE, Mar. 17, 1991, at 10.
150. See Richard D. Lyons, Sports Becoming Major U.S. Export to European Youth,
SEATTLE POST–INTELLIGENCER, June 17, 1991, at C6 (noting that Dino Radja had signed a
five-year, $15 million contract with Il Messaggero); Celtics Tell Radja to Go But Keep His
NBA Rights, WORCESTER TELEGRAM & GAZETTE, Aug. 3, 1990, at B1. Radja had signed a
one-year contract with the Celtics from the 1989–90 season, but a federal judge held that his
contract with Jugoplastika Split, his Yugoslavian team, held precedence. Id. Moreover, the
572 RUTGERS LAW JOURNAL [Vol. 41:549

American free-agent power forward Rick Mahorn, who had previously been
an important starter on the NBA’s Philadelphia 76ers.151
Unfortunately for Il Messaggero, however, its plan to take a more global
approach to Euroleague basketball came to an unexpected halt in early 1992
when Italy’s national economy crashed, leaving its team owners in both a
legal and financial crisis.152 Ultimately, on October 21, 1992, the Il
Messaggero ownership group sold their team to Italian businessman Angelo
Rovati, who was far less interested than his predecessors in the free spending
pursuit of American basketball players.153
After Il Messaggero’s financial collapse, Euroleague signings of NBA
players became once again limited to Americans at the end of their career.
However, after an almost ten year hiatus of interest in signing American mid-
career players, the 2002–03 Euroleague merger may have ushered a new era,
in which the signing of top American talent has again become a Euroleague
priority.154 Further, unlike in 1989–92, this time there are many different
Euroleague teams in the market for American labor.

judge freed Radja from any contract claim by the Celtics, and allowed Radja to sign with Il
Messaggero Roma. The following season, Il Messaggero finished an even better 18–12. See
id.
151. Mitch Albom, Land of Pasta Also Can be Land of Lotsa Dough: Mercedes and
Italy Fit Mahorn Well, CHI. TRIB., Mar. 15, 1992, at 13; Phil Jasner, ‘They Don’t Want to Win’
Mahorn: Some Sixers Not Winners, PHILA. DAILY NEWS, Jan. 3, 1992, at 90; Mahorn is Star in
Italian League, N.Y. TIMES, Apr. 23, 1992 at B17 (discussing the strong performance of Rick
Mahorn into the Italian League playoffs).
152. See Chemical Briefs, J. COMMERCE, Oct. 21, 1992, at 9A; Piero Valsecchi, Italian
Basketball Struggles Following Glory Days of 1980s, DAILY NEWS (L.A.), Nov. 8, 1992, at 7;
see also Frank Dell’Apa, Kiraly, Beach Volleyball are Enjoying Their Day in the Sun, BOS.
GLOBE, July 8, 1995, at 42; Italian Owner Pulls Out of America’s Cup, LONG BEACH PRESS–
TELEGRAM, Oct. 20, 1992, at D2.
153. See U.S. Will Meet Australia in ’93 Davis Cup Opener, SEATTLE TIMES, Oct. 20,
1992, at F5. Opener:
Italy’s Gruppo Ferruzzi Montedison is bowling out of basketball and America’s Cup
yacht racing, citing difficult economic times. The industrial giant said it will sell its Il
Messaggero team in the Italian basketball league to a group of industrialists headed
by Angelo Rovati. Its America’s Cup yacht, Il Moro di Venezia, reached the finals
before losing to America in May.
Id.
154. Heather E. Morrow, The Wide World of Sports is Getting Wider: A Look at
Drafting Foreign Players Into U.S. Professional Sports, 26 HOUS. J. INT’L L. 649, 689 (2004);
see also Robbi Pickeral & Larry Bratcher, Overseas Not Just a Backup Plan Anymore,
CHARLOTTE OBSERVER, June 14, 2009, at 12.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 573

2. Current NBA Player Movement into the Euroleague

Today, the Euroleague is no longer just a backup plan for NBA

hopefuls.155 There are more than sixty American players competing on either
Euroleague team rosters or rosters of teams that are eligible to be promoted
into the Euroleague.156 These players include seventeen in Italy’s Serie A
League,157 sixteen in Spain’s ACB League,158 eleven in Greece’s A1 Ethniki
League,159 eleven in Russia’s Super League,160 and four in Israel’s Ligat
HaAl League.161

155. Morrow, supra note 154, at 689; see also Pickeral & Bratcher, supra note 154.
156. Euroleague 2008–09 Awards, EUROLEAGUE BASKETBALL,
http://www.euroleague.net/competition/awards/awards-2008-09 (2007–08, 2005–06) (last
visited June 29, 2009) (noting that some of the elite American-born players who have recently
competed in the Euroleague).
157. Data accumulated from Italy’s Serie A League team rosters (noting that the 17
United States natives in the Serie A league with past NBA experience include the following:
Travis Best (9 years); Tamar Slay (3 years); Reece Gaines (3 years); Mike Hall (1 year);
Maurice Taylor (10 years); Harold Jamison (2 years); Allan Ray (1 year); Qyntel Woods (4
years); DJ Strawberry (1 year); Earl Boykins (10 years); Keith Langford (1 year); Brandon
Hunter (1 year); Kiwane Garris (3 years); Casey Shaw (2 years); Jermaine Jackson (4 years);
Joseph Forte (2 years)) . Italy’s Serie A league also has six non-American players with NBA
experience. See id. (noting the other players include Croatia native Dalibor Bagaric (3 years);
Nigeria native Ndudi Ebi (4 years); Senegal native Pape So (3 years), Slovenia native Uros
Slokar (1 year); Slovenia native Premoz Brezac (7 years); and Venezuela native Oscar Torres
(1 year)).
158. Data accumulated from Spain’s ACB League team rosters (noting that the 16
United States natives in the ACB league with past NBA experience include the following:
Pete Mickeal (2 years); Andre Barrett (2 years); Venson Hamilton (1 year); Omar Cook (3
years); Marcus Hayslip (3 years); Coby Karl (1 year); James Augustine (2 years); Melvin
Sanders (1 year); Shammond Williams (6 years); Curtis Borchardt (4 years); Quincy Lewis (4
years); Lou Roe (2 years); Vonteego Cummings (3 years); Taurean Green (2 years); Taquan
Green (1 year); Tyrus Edney (4 years)). Spain’s ACB league also has 22 non-American
players with NBA experience. See id. (noting the other players include the following: Croatia
native Stanko Barac (1 year); Argentina native Pepe Sanchez (3 years); Serbia native Igor
Rakocevic (1 year); Serbia native Kosta Perovic (1 year); Serbia native Predrag Savovic (1
year); Serbia native Mile Ilic (1 year); Spain native Fran Vazquez (1 year); Spain native Raul
Lopez (4 years); Spain native Carlos Jimenez (1 year); Spain native Albert Miralles (2 years);
Spain native Ruben Garces (2 year); Brazil native Tiago Spitter (1 year); Australia native
David Andersen (1 year); Czech Republic native Jiri Welsch (4 years); Turkey native Irsan
Ilyasova (2 years); Puerto Rico native Daniel Santiago (4 years); Puerto Rico native
Fuenlabrada Baloncesto (2 years); Belgium native Thomas Van den Spiegel (1 year); France’s
Jerome Moiso (5 years); Senegal’s Beneface N’Dong (1 year); Lithuania’s Seinutas Renaldas
(1 year); and Republic of Congo’s Serge Ibaka (1 year)).
159. Data accumulated from Greece’s A1 Ethniki League team rosters (noting that the
eleven United States natives in the A1 Ethniki league with past NBA experience include the
following: Steven Smith (1 year); Jamel Thomas (3 years); Josh Childress (4 years); Lynn
574 RUTGERS LAW JOURNAL [Vol. 41:549

Further, among the NBA’s ninety-eight free agents to sign new contracts
during the 2008–09 offseason, ten of them have signed with foreign teams
(10.2% of total free agent pool).162 When removing from this pool all of the
NBA free agents who ultimately re-signed with their former team, the
percentage of NBA free agents who chose a foreign league over the NBA
increases to just over 16%.163
In addition to this aggregate shift, empirical observation seems to point
toward increased competition between U.S. and Euroleague teams to sign
certain mid-level NBA players.164 For instance, during the 2008 off-season,
newspaper reports announced that NBA player Josh Childress rejected a
five-year, $33 million contract with the NBA’s Atlanta Hawks ($6.6
million/year) to sign a three-year, $20 million deal with the Greek team
Olympiacos, winners of the 2006–07 Euroleague championship ($6.67
million/year).165 Another American, Jannero Pargo, meanwhile accepted a

Greer (1 year); Jannero Pargo (7 years); Mike Batiste (1 year); Anthony Grundy (1 year);
Britten Johnsen (2 years); Lonny Baxter (4 years); Aaron Miles (1 year); and William Avery
(3 years)). Greece’s A1 Ethniki league also has four non-American players with NBA
experience. See id. (noting the other players include Greek natives Andreas Glyniadakis (1
year), Antonin Fotsis (1 year), Vassilis Spanoulis (2 years), and Lithuanian native Sarunas
Jasikevicius (2 years)).
160. Data accumulated from Russia’s Super League team rosters (noting that the
eleven United States natives in the Super League with past NBA experience include the
following: Terrence Morris (3 years); Trajan Langdon (3 years); Marc Jackson (4 years);
Kelly McCarty (1 year); Travis Hansen (1 year); Rawle Marshall (2 years); J.R. Bremer (2
years); Desmon Farmer (2 years); Marque Perry (1 year); Lionel Charmers (1 year); and
Jumaine Jones (8 years)). Russia’s Super League also has 10 non-American players with NBA
experience. See id. (noting the other players include the following: Argentina’s Carlos Delfino
(4 years); Belize’s Milton Palacio (7 years); Croatia’s Zoran Planinic (3 years); Poland’s
Maciej Lampe (3 years); Russia’s Viktor Khryapa (4 years); Russia’s Sergey Monya (1 year);
Russia’s Yaroslav Korolev (2 years); Serbia’s Ratko Varda (2 years); Slovenia’s Bostjan
Nachbar (4 years); and Spain’s Jorge Garabajosa (2 years)).
161. Data accumulated from Israel’s Ligat HaAl League team rosters (noting that the
four United States natives in the Ligat HaAl League with past NBA experience include the
following: Carlos Arroyo (7 years); Roger Powell (1 year); Marcus Brown (4 years); and Dee
Brown (1 year)).
162. Player Movement 2008: Free Agents by Name, supra note 8 (noting these free
agent players electing to sign with overseas teams include Carlos Arroyo, Earl Barron, Primoz
Brezec, Josh Childress, Carlos Delfino, Gordon Giricek, Nenad Krstic, Bostjan Nachbar,
Juan–Carlos Navarro).
163. Player Movement 2008: Free Agents by Name, supra note 8.
164. See infra notes 165-66 and accompanying text.
165. Dave Fairbank, This isn’t NBA’s Global Plan, DAILY PRESS (Va.), Aug. 9 2008,
at D1; Ex-Hawk Childress Signs with Greek Club Team, ESPN.COM, July 23, 2008,
http://sports.espn.go.com/espn/print?id=3501488&type=story; see also Steve Springer,
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 575

one-year, $3.5 million contract with a top Russian team rather than offers
from the NBA’s New Orleans Hornets (his former team), San Antonio Spurs
and Atlanta Hawks.166
In the 2008 and 2009 off-seasons, Euroleague teams have also bid
against one another for American players that the NBA teams have deemed
ineligible.167 For instance, in the summer of 2008, several European teams
competed to sign Californian point guard Brandon Jennings, who had been
denied entry into the NBA based on both his age and lack of formal
education.168 Jennings ultimately signed a guaranteed one-year contract with
the Italian-based team Pallacanestro Virtus Roma—the same team that was
formerly known as Il Messaggero.169 Including endorsements, Jennings is
believed to have earned a 2008–09 salary that exceeded $1 million.170
In addition, in the summer of 2009, another Californian, Jeremy Tyler,
decided to forego his senior year of high school to turn professional at the
age of 17.171 Like Jennings, Tyler was deemed ineligible by the NBA
age/education requirement. 172 His agent Arn Tellem, however, purportedly
received numerous offers from European, Middle Eastern and Chinese teams
for Tyler’s services.173 Ultimately, Tyler signed a one-year, $140,000

Around the NBA: Childress Leaves Hawks for Greece, L.A. TIMES, July 24, 2008, at 7; Josh
Childress Stats, ESPN.COM, http://sports.espn.go.com/nba/players/profile?playerId=2373;
Whittell, supra note 128 (noting that 50% of the Olympiacos team is owned by shipping
billionaires Panagiotis and George Angelopoulos).
166. See Abbott, supra note 8; see also Jannero Pargo Stats, ESPN.COM,
http://sports.espn.go.com/nba/players/profile?playerId=1821 (last visited Feb. 3, 2010).
167. See infra notes 168-70 and accompanying text.
168 See John Smallwood, Brandon Jennings Won’t Set Euro Trend in NBA, PHILA.
DAILY NEWS, June 30, 2009, at 55; Ailene Voisin, Spanish Star Could Fill Two of Kings’
Needs, SACRAMENTO BEE, Apr. 22, 2009, at C1 available at 2009 WLNR 7546349.
169. Pete Thamel, A Recruit Flees to Italy, Possibly Setting a Trend, N.Y. TIMES, July
17, 2008, at D6; Jacob Leibenluft, The Great Basketball Exodus, SLATE,
http://www.slate.com/id/2195127 (last visited May 12, 2010).
170. Pete Thamel, A Top Prospect Picks Europe Over High School and College, N.Y.
TIMES, Apr. 23, 2009, at B14 [hereinafter Thamel, Top Prospect]; see also Campionato,
LEGABASKET, http://195.56.77.208/team/history.phtml?id=RMV (last visited May 12, 2010)
(noting the many team names of Roma).
171. See Kyle Hightower, Tyler’s Choice: Bold Move, ORLANDO SENTINEL, Apr. 28,
2009, at C4; see also Do You Believe?, HARTFORD COURANT, Jun. 21, 2009, at E2, available
at 2009 WLNR 11996406.
172. See Hightower, supra note 171, at C4.
173. Thamel, Top Prospect, supra note 170 (noting that Tyler is being advised by
Sonny Vaccaro, a former sneaker executive, who also helped Brandon Jennings reach his
agreement in Italy); see also Pickeral & Bratcher, supra note 154; Allon Sinai, Haifa Close to
Signing US High School Phenom, JERUSALEM POST, June 14, 2009, at 12; Bernie Wilson,
576 RUTGERS LAW JOURNAL [Vol. 41:549

contract with the Haifa Heat of Israel’s Ligat HaAl League, which is a feeder
league into the Euroleague.174 Tyler purportedly chose the Heat over more
lucrative European opportunities because he preferred to play for a coach
that was fluent in English.175

C. Movement of Foreign Born Professional Basketball Players to the United

States

Not only have more American basketball players recently begun to

compete in the Euroleague and other overseas professional leagues, but more
foreign players have also begun to compete in the NBA.176 Some of these
foreign players have accepted multi-year NBA contracts; meanwhile others
prefer deals that give them the flexibility to move freely between NBA and
Euroleague teams.177
Movement of foreign-born basketball players into the NBA has occurred
in three waves: (1) the arrival of political refugees from Cold War nations
(beginning in 1988); (2) the arrival of Western Europeans who grew up
watching the U.S. Olympic “Dream Team” (beginning in 1998); and (3) the
arrival of post-Dream Team babies from the rest of the world (beginning
with regularity in the early 2000s). 178

1. The First Wave: Political Refugees from Cold War Nations

The first wave of foreign players to enter the NBA came mainly from
Eastern European countries at the end of the Cold War.179 These players were

Going Pro Before High School Ends: Tyler Opts to Play Overseas to Hone His Hoop Skills,
N.J. RECORD, May 5, 2009, at S12, available at 2009 WLNR 11377421.
174. Allon Sinai, Tyler Lands in Israel with Lofty Aspirations, JERUSALEM POST, Sept.
4, 2009, at 12.
175. Id.
176. See discussion infra Part III.C.1-3.
177. See, e.g., Jonathan Abrams, N.B.A. Looks Overseas for Draft Prospects, and
Doesn’t See Much, N.Y. TIMES, June 21, 2009, at 11 (noting that Fran Vazquez, a player taken
by the Orlando Magic with the 11th overall selection in the 2005 NBA draft, ultimately chose
to stay in his home country of Spain and not accept the Magic’s contract offer).
178. See discussion infra Part III.C.1-3.
179. See Dan Daly, For U.S., a Union of Great Import, WASH. TIMES, Mar. 29, 2007,
at C1; Johnny Ludden, Globalization of the Spurs and the NBA, SAN ANTONIO EXPRESS–
NEWS, Oct. 1, 2006, at 4N (“The Spurs sign Yugoslavian forward Zarko Paspalj, the team's
first true international player. Four other players from behind the Iron Curtain—Sarunas
Marciulionis, Drazen Petrovic, Vlade Divac and Alexander Volkov—join Paspalj in the NBA
for the 1989–90 season.”); M. Solis, League of Nations, SAN ANTONIO CURRENT, Mar. 22,
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 577

mainly political refugees who had dominated their home country’s leagues
and wanted the chance to earn a larger income playing basketball in a
capitalist country.
Two of the early Eastern Europeans to join the NBA were a pair of
starters on the Soviet Union’s 1988 Olympic Gold Metal team: Alexander
Volkov and Sarunas Marciulionis.180 Volkov, who had been the 1987 Soviet
League’s Most Valuable Player, signed a one-year $650,000 contract to join
the Atlanta Hawks.181 Meanwhile, Marciulionis, who was the leading Soviet
scorer in the Olympics, accepted a three-year deal with the Golden State
Warriors for roughly $1.3 million.182
Another of these early Eastern Europeans to join NBA was Vlade Divac,
who had starred on Yugoslavia’s 1988 Olympic Silver Medal team.183 A
wide-framed center with a soft passing touch, Divac initially signed a three-
year, $2.7 million contract with the NBA’s Los Angeles Lakers.184 Although
he spoke little English at the time of his signing, Divac quickly learned the

2006, at 36. See generally Ailene Voisin, Coming To America . . .: Adjusting to NBA Can Be
Trying Experience For Europeans, SACRAMENTO BEE, Apr. 26, 1988, at C9. Prior to that year,
the only Eastern European player to log even a minute of NBA playing time was Georgi
Glouchkov, an average-sized forward from Bulgaria, who played briefly in 1985–86 for the
Phoenix Suns. Tim Povtak, Foreigners Influence NBA Both at Home and Abroad, ORLANDO
SENTINEL, Aug. 20, 1989, at C1.
180. See Mike Vaccaro, Nightmare Led to the ‘Dream’ – 20 Years Since the Soviets
Took Us Kids to School, N.Y. POST, Aug. 17, 2008, at 89; International Players in the NBA,
EVENING STANDARD (London), Oct. 8, 2007, at 5 (noting that the Americans finished with the
bronze metal); Ailene Voisin, He Drew the Iron Curtain on the NBA, SACRAMENTO BEE, Aug.
17, 2005, at C1; David Sabino, Trivial Matters, SPORTS ILLUSTRATED, Aug. 9, 2004, at 38;
Voisin, supra note 179; see also Mark Heisler, On Olympic Basketball; U.S. Team Gets the
Rock Star Treatment, L.A. TIMES, Aug. 4, 2008, at 1.
181. See Tim Tucker, Hawks Pioneered International Picks, ATLANTA J.–CONST., June
29, 2003, at 2G; see also Mark Bradley, Pro Basketball: Hawks Were Amongst the First to
Think Globally, ATLANTA J.–CONST., May 5, 2002, at 9D; Bob Ford, Spiraling Salaries Dizzy
to NBA, PHILA. INQUIRER, Aug. 11, 1989, at C8; Dave Mackell, Sports, Page Two Extra,
Sports Roundup, WASH. TIMES, Aug. 2, 1989, at D2.
182. See Unselfish Described Warriors, CONTRA COSTA TIMES (Cal.), Feb. 15, 2007, at
F4; see also Liz Robbins, Faces from Afar: European Pioneer: A Rough Road Paved the Way,
N.Y. TIMES, Jan. 9, 2005, at 2 (describing Marciulionis’s experiences as a new N.B.A. player);
Charles Elmore, Soviet Trade Trickles Down to Florida, PALM BEACH POST, Sept. 17, 1989, at
1D; Jan Hubbard, The Courtship of a Soviet Star, NEWSDAY (N.Y.), Aug. 13, 1989, at 32
(“Marciulionis signed a three-year Warriors contract for $1.3 million a year. No one knows
for sure how much each of the Soviet institutions got, but reports in the Bay Area indicate
Marciulionis will keep about 25 percent of that money, or $325,000.”).
183. Lakers Sign Yugoslavian Center Divac, HOUS. CHRON., Aug. 8, 1989, at 6.
184. See Joe Gergen, Wide World of Sports Gets Wider, NEWSDAY, Aug. 13, 1989, at
7; Ford, supra note 181.
578 RUTGERS LAW JOURNAL [Vol. 41:549

language and earned regular playing time.185 Eventually, Divac distinguished

himself as one of the NBA’s better all-around players.186
On the heels of the debut of players such as Volkov, Maciulionis and
Divac, nearly one hundred other Eastern Europeans have since entered the
NBA. There are currently twenty Eastern European players on NBA rosters,
representing 4.4% of the NBA’s overall population. These players were all
born in Montenegro, Turkey, the former Soviet Union, or former Yugoslavia.
(See Exhibit II: NBA Players Born in Eastern Europe).187

2. The Second Wave: Western Europeans

Thereafter, a second wave of foreign players began to enter the NBA

from Western Europe. Unlike the Eastern European players, many of the
Western Europeans were familiar with the NBA, as well as with commercial
basketball. For many of these players, watching the United States Dream
Team win the Gold Medal in the 1992 Olympics was the “zeitgeist moment”
that made them want to become NBA stars, rather than just basketball
stars.188
The Western European who deserves the most credit for convincing
NBA scouts to recruit in that region of the world is Dirk Nowitzki, a German
player who entered the NBA as the ninth overall selection of the 1998
draft.189 At the time Nowitzki was drafted, most American scouts did not
believe he would not be able to adjust to the NBA’s longer schedule and

185. Morrow, supra note 154 at 688–69.

186. Christopher Clarey, Divac Opened Door and World Followed, INT’L HERALD
TRIB., Oct. 22, 2005, at 20 (noting that by the time Divac retired from the NBA, sixteen years
later, he had become one of only three players in league history to record 13,000 points, 9,000
rebounds, 3,000 assists, and 1,500 blocks).
187. Id.
188. Morrow, supra note 154, at 690 (citing Diversifying: NBA Becoming an
International League, HOUS. CHRON., June 2, 2002, at 1); see also Paul Genender, Note, A
Transcontinental Alley-Oop: Antitrust Ramifications of Potential National Basketball
Association Expansion into Europe, 4 DUKE J. COMP. & INT’L L. 291, 294 (1994) (“[T]he
enthusiastic response to the 1992 United States Olympic basketball team, the ‘Dream Team,’
revealed the global popularity of the NBA and of basketball in general. In fact, according to
some observers, the NBA advocated forming the ‘Dream Team’ in order to lay the foundation
for international expansion.” (footnotes omitted)); Dan Garcia, Draft Has European Feel to It,
STAR–LEDGER (N.J.), June 26, 1996, at 69 (quoting Lithuanian born professional basketball
player Vitaly Potapenko as stating that “[a] lot of kids in Europe idolize Michael Jordan,
Shaquille O’Neal and Patrick Ewing.”).
189. Jack Thompson, Mavericks Court German Draft Pick, CHI. TRIB., June 29, 1998,
at 2.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 579

more physical style of play. However, Nowitzki proved these scouts wrong,
earning eight All-Star game appearances over eleven years, and winning the
2007 Most Valuable Player Award.190
Nowitzki remains the NBA’s only active player born and raised in
Germany; however, he has since been joined by 17 other Western Europeans
(4.0% of overall NBA workforce) (See Exhibit III: 2011 NBA Players Born
in Western Europe).191 Seven of these Western Europeans were either born
or raised in France.192 This includes San Antonio Spurs point-guard Tony
Parker, who is one of the most recognized players in the American game
today.193
Three Italian players also have made a recent impact in the NBA,
including Andreas Bargnani, who was the first overall pick of the 2006 NBA
draft, and Danilo Gallinari, who was selected sixth overall in the 2008 draft
by the New York Knicks, a team coached by former Italian League player
and coach Mike D’Antoni.194 Given how strongly Italian teams have
performed in Euroleague play, many basketball experts believe that there are
many others from that region who would excel in the NBA.195 However,
many top Italian teams have retained their best players by offering them
salaries that exceed those available from NBA teams, given the NBA slotted
salary system for rookies.196
Finally, four Spanish players have entered the NBA in recent seasons,
beginning with 7’0” center Pau Gasol, who the Memphis Grizzlies selected
with the third overall pick of the 2001 draft.197 In 2009, a fifth and highly-

190. International Players in the NBA, supra note 180; see also All Star Player
Profiles—Dirk Nowitzki, NBA.COM, http://www.nba.com/allstar2009/players/
dirk_nowitzki.html (last visited May 12, 2010).
191. See NBA Teams, supra note 9.
192. NBA Basketball Teams, ESPN.com, http://sports.espn.go.com/nba/teams (follow
“Roster” hyperlinks) (last visited May 12, 2010).
193. See Stephen A. Smith, Spurs Incomparable Already Risen: Parker and Ginobili
Have Elevated San Antonio to New Heights, PHILA. INQUIRER, June 12, 2007, at E1.
194. See NBA Basketball Teams, ESPN.com, http://sports.espn.go.com/nba/teams (last
visited May 12, 2010); see also Marc Berman, Meet the Italian Stallion—Milan Star on Knick
Radar, N.Y. POST, May 22, 2008, at 80; Alan Hahn, Wilson’s Opening Act, NEWSDAY, Oct.
28, 2010 at A62.
195. Dave D’Alessandro, Nets Size Up Italian Teenager, STAR–LEDGER (N.J.), June
13, 2008, at 52.
196. Id. (noting that New York Knicks’ first round draft pick Danilo Gallinari likely
could earn more money playing in Italy than the Knicks are allowed to pay him under the
current NBA collective bargaining agreement).
197. See Ronald Tillery, At Least Griz Have An Upside, MEMPHIS COM. APPEAL, Dec.
26, 2001, at D1.
580 RUTGERS LAW JOURNAL [Vol. 41:549

touted Spanish point guard, Ricky Rubio, was drafted into the NBA by the
Minnesota Timberwolves.198 However, Rubio has stated that he does not plan
to play in the NBA unless his rights are traded to a larger market team.199 As
one Washington Times reporter colorfully described Rubio’s demands, in
light of past NBA history, he is “dropping the Danny Ferry card.”200

3. The Third Wave: The Rest of the World

Finally, in the past decade a number of foreign players from outside of

Europe have begun to enter the NBA (See Exhibit IV: 2011 NBA Players
Raised Outside of the United States and Europe).201
One country that has seen a recent influx of players to the NBA is
Argentina, which surprised many by winning the gold medal in basketball in
the 2004 Olympics.202 In 1999, the NBA’s San Antonio Spurs became the
first team to select an Argentine when they drafted Manu Ginobili with the
fifty-seventh overall pick in the 1999 NBA draft.203 Since then, three other
Argentines have joined the NBA ranks. (See Exhibit IV: 2011 NBA Players
Raised Outside of the United States and Europe).204
Brazil similarly has sent four players to the NBA in recent years.205 The
two most famous of these players are Leandro Barbosa, who was selected by
the Phoenix Suns with the twenty-eighth overall pick in the 2003 NBA
draft,206 and Nenê Hilário, who was selected by the New York Knicks with
the seventh overall pick in the 2002 NBA Draft.207

198. See Pete Thamel, A Star at 19, Rubio is Spain’s Dream Teen, INT’L HERALD
TRIB., Aug. 30, 2010, available at 2010 WLNR 17212489.
199. Tom Knott, This Pick May Leave Minnesota Out in Cold, WASH. TIMES, June 29,
2009, at C1.
200. Id.
201. See infra Exhibit IV.
202. See NBA Today, CHARLOTTE OBSERVER, Nov. 5, 2010, available at 2010 WLNR
22115297 (discussing Argentina’s gold medal basketball team at the 2004 Olympics).
203. See Smith, supra note 193.
204. See NBA Teams, supra note 9.
205. See infra Exhibit IV.
206. Leandro Barbosa Bio, NBA.COM, http://www.nba.com/playerfile/
leandro_barbosa/bio.html (last visited May 12, 2010). During the 2006–07 season, Barbosa
was the recipient of the NBA Sixth Man of the Year Award, averaging 18.0 points, 2.7
rebounds, and 4.0 assists per game. Id.; see also Phoenix’s Barbosa Wins Sixth Man Award,
WASH. POST, Apr. 24, 2007, at E4, available at http://sports.espn.go.com/nba/
news/story?id=2846672.
207. Nenê Hilário Bio, NBA.COM, http://www.nba.com/playerfile/nene/bio.html (last
visited May 12, 2010).
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 581

Chinese players are also beginning to enjoy NBA opportunities, most

notably 7’6” center Yao Ming, who the NBA’s Houston Rockets selected
with the first overall pick of the 2002 draft.208 On the front end, getting Yao
into uniform presented some challenge for the Rockets, as it required a
separate agreement to secure Yao’s release from the government-run Chinese
Association.209 However, now that Yao has played several NBA seasons, the
challenge seems to have paid off.210 Indeed, another NBA team, the
Milwaukee Bucks, has more recently signed a Chinese player, Yi Jianlian,
with the sixth overall pick in the 2007 NBA draft.211

IV. COULD A COURT HOLD THE NBA TEAMS LACK “MARKET POWER” IN
AN INTERNATIONAL MARKET?

A. General Analysis

Given the recent increase in player movement between U.S. and foreign
basketball leagues, there is reasonable debate about whether NBA teams
could successfully defend an antitrust lawsuit based on an argument that they
lack market power within an international market for men’s basketball labor.
On one hand, the analysis in Part III of this article indicates that 10–16%
of the NBA’s players currently move freely between NBA and Euroleague
teams (a number significantly close to the 20% threshold for an international
market definition, as applied in some product-market cases).212 However, on
the other hand, this same analysis indicates that players who move freely

208. See Morrow, supra note 154, at 696–97; see also Dustin C. Lane, From Mao to
Yao: A New Game Plan for China in the Era of Basketball Globalization, 13 PAC. RIM L. &
POL’Y J. 127, 127 (2004); Ludden, supra note 179, at 4N (“China’s Yao Ming becomes the
first international player with no American college experience to be the No. 1 overall pick.”).
209. See Morrow, supra note 154, at 698; see also Lane, supra note 208, at 129 (noting
that at the time the Houston Rockets drafted Yao Ming there was “lingering uncertainty as to
Yao’s ultimate availability”).
210. See Yao Ming Career Stats, NBA, http://www.nba.com/playerfile/yao_ming/
career_stats.html (last visited May 12, 2010).
211. John Jackson, NBA Draft: 3 Up, 3 Down, CHI. SUN–TIMES, June 29, 2007, at 133;
Bucks Draft Yi Jianlian of China, CHINADAILY, June 29, 2007, www.chinadaily.com.cn/
sports/2007-06/29/content_905376.htm (last visited Feb. 7, 2010).
212. See, e.g., Ramallo Bros. Printing. v. El Dia, Inc., 392 F. Supp. 2d 118, 133
(D.P.R. 2005) (“We do not believe a finder of fact could rationally exclude from the relevant
market printers located outside Puerto Rico that currently sell significant quantities of
shoppers into Puerto Rico. Currently, approximately 20 percent of the shoppers inserted in El
Nuevo Día are printed outside Puerto Rico, suggesting that offshore printers already compete
substantially. . . .”).
582 RUTGERS LAW JOURNAL [Vol. 41:549

between the NBA and foreign leagues generally fall within one of the
following categories: (1) players who are marginal in their on-the-court
ability; (2) players who are not originally from the United States; and (3)
players already excluded by some labor restraint, such as the NBA
age/education requirement. Indeed, there is almost no actual movement of
elite American players between the NBA and foreign leagues.

B. Defining the Proper Geographic Market

Determining the relevant geographic market for professional basketball

labor ultimately comes down to unsettled legal issues about geographic
market definition.
There are currently at least two different tests that a court may use to
determine whether a premier professional basketball player competes in a
single, international market. The first test, which some courts have adopted
from the U.S. Department of Justice and Federal Trade Commission
Guidelines, defines a single geographic market based on whether a “small
but significant and nontransitory” change in price within a given region
would lead one to switch from one employer to another.213 The second test,
meanwhile, defines relevant geographic market based on where the
movement of workers is “practicable.”214
Both of these definitions produce some uncertainty in the context of
labor markets. The first definition requires a level of detailed econometric
analysis that is beyond the scope of this paper. Meanwhile, the second test
produces some uncertainty about how to define “practicable” substitutes in a
labor market setting.

213. U.S. DEP’T OF JUSTICE & FED. TRADE COMM., HORIZONTAL MERGER GUIDELINES
§§ 1.2–1.21 (1997), available at http://www.usdoj.gov/atr/public/guidelines/
horiz_book/12.html; see also F.T.C. v. Freeman Hosp., 69 F.3d 260, 268 (8th Cir. 1995);
California v. Mirant Corp., 266 F. Supp. 2d 1046, 1056 (N.D. Cal. 2003); Brief for
Defendants–Appellees Major League Soccer, L.L.C., supra note 5, at 34–38 (stating that the
District of Massachusetts in Fraser defined the relevant geographic area as the “area within
which MLS faces competition and to which players can turn, as a practical matter, for
alternative opportunities for employment as professional soccer players”).
214. Bathke v. Casey’s Gen. Stores, Inc., 64 F.3d 340, 346 (8th Cir. 1995); Freeman
Hosp., 69 F.3d at 268–69 (citing Morganstern v. Wilson, 29 F.3d 1291, 1296 (8th Cir. 1994);
see also Petition for a Writ of Certiorari (Exhibit E: Verdict on Special Questions to the Jury)
at 77a Fraser v. Major League Soccer, L.L.C., 284 F.3d 59 (1st Cir. 2002) (No. 02–140)
(explaining that in a sports antitrust case involving the professional soccer labor market, the
relevant geographic market is the one a player could turn to “as a practical matter” for
opportunities of employment).
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 583

Looking in more detail at the second test, the word “practicable,” in the
context of worker movement, could be defined in at least three different
ways: (1) that it is always practicable for a worker to relocate for a job (the
Tanaka view); (2) that worker preference about where to live may be
considered in determining whether relocation is practicable, but that
preference is never alone determinative (the Fraser view); and (3) that it is
never practicable to require a worker to relocate to overcome a restraint
imposed by employers (“the Worker’s Rights View”).215 Each of these three
definitions leads to somewhat different conclusion with respect to the
geographic scope of the men’s basketball player market.

1. The Tanaka View: Worker Relocation is Always Practicable

The view that worker relocation is always practicable has been adopted
by at least one court, the U.S. Court of Appeals for the Ninth Circuit, in the
case Tanaka v. University of Southern California.216 There, the court
disregarded a female collegiate soccer player’s preference to only accept
employment near her family’s home in Los Angeles in favor of the view that
the market for her services was national.217 In reaching this conclusion, the
court in Tanaka applied the same traditional case law about practicability in
markets for goods to markets for labor.218
Although the Ninth Circuit is traditionally perceived as a plaintiff-
friendly circuit,219 the Ninth Circuit’s standard in Tanaka might preclude a
men’s basketball player from bringing a Section 1 Sherman Act case against
the NBA teams because a court might find the NBA teams to lack market
power, given the opportunity for these players to sign with teams in foreign
leagues. Thus, although quotas severely limit American opportunities in both

215. See discussion infra Part IV. B.1–3.

216. 252 F.3d 1059, 1063–64 (9th Cir. 2001).
217. Id. at 1063 (“Of course, Tanaka’s personal preference to remain in the Los
Angeles area is irrelevant to the question of whether Los Angeles is an area of effective
competition for the services of women’s intercollegiate soccer players.”). In finding a national
(rather than local) labor market for intercollegiate soccer player services, the court focused
instead on the fact that Tanaka had been “heavily recruited by universities across the country.”
Id. at 1063.
218. Id. at 1064 (citations omitted).
219. See, e.g., DENNIS WESTLIND ET AL., RECENT DEVELOPMENTS IN WHISTLEBLOWER
CLAIMS: LEADING LAWYERS ON ANALYZING POTENTIAL CLAIMS, NAVIGATING RECENT
JUDICIAL DECISIONS, AND BUILDING AN EFFECTIVE DEFENSE 1, 4 (Aspatore 2010) (referencing
in general “the plaintiff-friendly Ninth Circuit”); Arianna Tunsky Brashich, Note, Offsetting
Justice: Protecting Federally Exempt Benefits from Garnishment and Bank Set-Offs, 29 B.C.
THIRD WORLD L.J. 323, 342 (2009) (referencing “the usually plaintiff-friendly Ninth Circuit”).
584 RUTGERS LAW JOURNAL [Vol. 41:549

Greek and Spanish leagues, as long as a number of opportunities in the same

general pay range exist in other countries such as Italy or Israel, a jury might
reasonably conclude under the Tanaka standard that there is an international
market for premier men’s basketball player labor.220

2. The Fraser View: Worker Preference is One of Many Factors

The second view—that worker preference should be treated as one of

many factors in determining the relevant geographic market for labor—has
been adopted by the First Circuit in Fraser.221 There, the jury ultimately
found that the men’s professional soccer market was international based on
the number of professional soccer players that have moved in and out of U.S.
leagues.222 However, even when applying the Fraser view, a fact finder still
might not reach the same conclusion with respect to the men’s basketball
player market, given some important differences in the underlying facts
regarding the men’s basketball market.
Indeed, in many ways the market for soccer labor is far more global than
that for basketball labor. For example, the facts in Fraser indicate that over
190 of Major League Soccer’s approximately 250 players had foreign
professional soccer experience (76% overall), and that between 119 and 185
of the league’s approximately 250 players had “opportunities to play
professional soccer in a league comparable to or better than MLS in salary
and quality of play.”223 By contrast, in professional basketball, the number of
players with NBA experience who are playing abroad is just 60 of the 495
total world players with NBA experience (12.4%).224 In addition, the court in
Fraser noted that roughly 35–40% of the MLS’s players had foreign
citizenship.225 By contrast, only 12.7% of NBA players were raised in a
foreign country.226
Moreover, while both American and foreign sports teams are likely to
remain competitors in the market for premier men’s professional soccer
labor, in the market for premier men’s basketball labor there is a reasonable

220. Tanaka, 252 F.3d at 1063–64.

221. See Petition for a Writ of Certiorari, supra note 214.
222. Fraser v. Major League Soccer, L.L.C., 284 F.3d 59, 63 (1st Cir. 2002).
223. Brief for Defendants–Appellees Major League Soccer, L.L.C., supra note 5, at
20–23.
224. See supra section III.B.
225. Brief for Defendants–Appellees Major League Soccer, L.L.C., supra note 5, at
20–23.
226. See supra note 9 and accompanying text; see also infra Exhibits II, III, and IV.
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 585

chance that the NBA teams will soon expand into Europe.227 As the NBA
expands overseas, this potentially could drive the foreign-based leagues
currently operating in those markets toward bankruptcy.

3. The Workers’ Rights View: A Worker Should Never Have to Move

Across State Lines to Overcome a Market Restraint

Finally, a third possible, albeit novel, definition of “practicable” finds its

roots in more traditional antitrust case law. The argument asserts that it is
never “practicable” for a worker to move across national boundaries to find
work, and that no American citizen should ever have to do so to overcome a
concerted restraint of trade. This view has not yet been adopted directly by
any circuit. However, it appears to have support in some of the most famous
antitrust cases of the early twentieth century, which conclude that, as a
matter of public policy, labor-side antitrust laws must protect workers’ rights
to “secur[e] employment in [their] chosen avocation, trade and calling.”228
For instance, writing on behalf of the Sixth Circuit in United States v.
Addyston Pipe & Steel Co., Judge William Taft noted that restraints are
illegal where a man becomes disabled from earning a livelihood because it
creates the risk of that man becoming a public charge, and “deprive[s] the
community of the benefit of his labor.”229 Thus, to the extent that foreclosing
U.S. market opportunities would induce some men’s basketball players to
retire rather than work overseas, the Worker’s Rights view would seem to
frown upon defining the men’s basketball market as international.

V. CONCLUSION

Whether a finder-of-fact would deem the NBA to lack “market power”

within an international labor market is a matter of great importance to NBA
team-owners, as it affects whether the NBA team-owners, under antitrust
law, may unilaterally implement league-wide labor restraints.

227. Edelman & Doyle, “Free Movement” Risks, supra note 1, at 404.
228. Mattison v. L. S. & M.S. Ry. Co., 3 Ohio Dec. 526, 527, 1895 WL 600, *1 (Ohio
Com. Pl. 1895) (internal quotation marks omitted); see also Petitioner’s Opening Brief at 33
Radovich v. Nat'l Football League, 352 U.S. 445 (1957) (No. 94) (citing various cases “[f]or
additional common law treatment of boycotting and blacklisting as restraints of trade”);
Gardella v. Chandler, 172 F.2d 402, 408 (2d Cir. 1949) (Hand, J., concurring); Edelman,
Commissioner Suspensions, supra note 12, at 639–40.
229. 85 F. 271, 279 (6th Cir. 1898), aff’d, 175 U.S. 211 (1899).
586 RUTGERS LAW JOURNAL [Vol. 41:549

Based on the foregoing, however, it remains unsettled whether NBA

teams compete in an international market for player labor. From a legal
perspective, this uncertainty is due to disagreement about the proper
definition of the word “practicable” in a labor market context, and thus
uncertainty as to whether it is “practicable” for a professional basketball
player to accept employment opportunities overseas.
In addition, from a factual perspective, there is uncertainty about whether
there are sufficient men’s basketball players for whom it is “practicable” to
compete overseas. While it is certain that the market for men’s basketball
player labor has more international characteristics than the market for men’s
football labor, the international characteristics of the men’s basketball labor
market still may pale in comparison to that of men’s soccer.
Perhaps, the best presumption that can be reached at this time is that it
would be wise for any men’s professional basketball player that seeks to
bring a labor-side antitrust suit against the NBA to avoid doing so in the
Ninth Circuit, where the holding of Tanaka seems to support a broad
definition of the word “practicable” and thus a strong likelihood that the
NBA players would be found to operate within an international labor market.
In addition, any plaintiff attempting to bring a labor-side antitrust suit against
the NBA teams in the First Circuit should be prepared to differentiate the
men’s professional basketball marketplace from the market for professional
soccer player labor.

Exhibit I: Movement of NBA Free Agents, 2008–09

(Players Moving Overseas are Highlighted)

NBA Player Old Team New Team

Tony Allen Boston Celtics Boston Celtics
Malik Allen Dallas Mavericks Milwaukee Bucks
Louis Amundson Philadelphia 76ers Phoenix Suns
Chris Anderson New Orleans Hornets Denver Nuggets
Gilbert Arenas Washington Wizards Washington Wizards
Carlos Arroyo Orlando Magic Maccabi Tel Aviv
Kelenna Azubuike Golden State Warriors Golden State Warriors
Jose Barea Dallas Mavericks Dallas Mavericks
Matt Barnes Golden State Warriors Phoenix Suns
Earl Barron Miami Heat Italian Team
Brent Barry San Antonio Spurs Houston Rockets
Andris Biedrins Golden State Warriors Golden State Warriors
Ryan Bowen New Orleans Hornets New Orleans Hornets
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 587

Elton Brand Los Angeles Clippers Philadelphia 76ers

Primoz Brezec Toronto Raptors Italian Team
Devin Brown Cleveland Cavaliers New Orleans Hornets
Kwame Brown Memphis Grizzlies Detroit Pistons
Shannon Brown Chicago Bulls Charlotte Bobcats
Jose Calderon Toronto Raptors Toronto Raptors
Sam Cassell Boston Celtics Boston Celtics
Josh Childress Atlanta Hawks Greek Team
Baron Davis Golden State Warriors Los Angeles Clippers
Paul Davis Los Angeles Clippers Los Angeles Clippers
Ricky Davis Miami Heat Los Angeles Clippers
Carlos Delfino Toronto Raptors Russian Team
Luol Deng Chicago Bulls Chicago Bulls
Yakhouba Diawara Denver Nuggets Miami Heat
Dan Dickau Los Angeles Clippers Golden State Warriors
DeSagana Diop New Jersey Nets Dallas Mavericks
Juan Dixon Detroit Pistons Washington Wizards
Kenyon Dooling Orland Magic New Jersey Nets
Chris Duhon Chicago Bulls New York Knicks
Monta Ellis Golden State Warriors Golden State Warriors
Francisco Elson Oklahoma City Thunder Milwaukee Bucks
Maurice Evans Orlando Magic Atlanta Hawks
Nick Fazekas Los Angles Clippers Denver Nuggets
Michael Finley San Antonio Spurs San Antonio Spurs
Devean George Dallas Mavericks Dallas Mavericks
Daniel Gibson Cleveland Cavaliers Cleveland Cavaliers
Gordon Giricek Phoenix Suns Turkish Team
Ben Gordon Chicago Bulls Chicago Bulls
Ryan Gomes Minnesota Timberwolves Minnesota Timberwolves
Jarvis Hayes Detroit Pistons New Jersey Nets
Walter Hermann Detroit Pistons Detroit Pistons
Ryan Hollins Charlotte Bobcats Charlotte Bobcats
Eddie House Boston Celtics Boston Celtics
Juwan Howard Dallas Mavericks Denver Nuggets
Andre Iguodala Philadelphia 76ers Philadelphia 76ers
Royal Ivey Milwaukee Bucks Philadelphia 76ers
Anthony Johnson Sacramento Kings Orlando Magic
Dermarr Johhnson San Antonio Spurs Washington Wizards
Linton Johnson Phoenix Suns Washington Wizards
Dwayne Jones Cleveland Cavaliers Orlando Magic
James Jones Portland Trailblazers Miami Heat
Nenad Kristic New Jersey Nets Russian Team
Carl Landry Houston Rockets Houston Rockets
588 RUTGERS LAW JOURNAL [Vol. 41:549

Shaun Livingston Los Angeles Clippers Miami Heat

Tyronn Lue Dallas Mavericks Milwaukee Bucks
Corey Maggette Los Angeles Clippers Golden State Warriors
Jamaal Magloire Dallas Mavericks Miami Heat
Sean Marks Phoenix Suns New Orleans Hornets
Roger Mason Washington Wizards San Antonio Spurs
D.J. Mbenga Los Angeles Lakers Los Angeles Lakers
C.J. Miles Utah Jazz Utah Jazz
Randolph Morris New York Knicks Atlanta Hawks
Ronald Murray Indiana Pacers Atlanta Hawks
Bostjan Nachbar New Jersey Nets Russian Team
Eduardo Najara Denver Nuggets New Jersey Nets
Juan-Carlos Navarro Memphis Grizzlies Spanish Team
Patrick O’Bryant Golden State Warriors Boston Celtics
Emeka Okafor Charlotte Bobcats Charlotte Bobcats
Jannero Pargo New Orleans Hornets Russian Team
Smush Parker Los Angeles Clippers Denver Rockets
Mickael Pietrus Golden State Warriors Orlando Magic
James Posey Boston Celtics New Orleans Hornets
Chris Quinn Miami Heat Miami Heat
Shavlik Randolph Philadelphia 76ers Portland Trailblazers
Theo Ratliff Detroit Pistons Philadelphia 76ers
Quinton Ross Los Angeles Clippers Memphis Grizzlies
Kareem Rush Indiana Pacers Philadelphia 76ers
Brian Skinner Phoenix Suns Los Angeles Clippers
Craig Smith Minnesota Timberwolves Minnesota Timberwolves
Josh Smith Atlanta Hawks Atlanta Hawks
J.R. Smith Denver Nuggets Denver Nuggets
Awvee Storey Milwaukee Bucks New Jersey Nets
Salim Stoudamire Atlanta Hawks San Antonio Spurs
Robert Smith Oklahoma City Thunder Oklahoma City Thunder
Donnell Taylor Washington Wizards Washington Wizards
Sebastian Telfair Minnesota Timberwolves Minnesota Timberwolves
Kurt Thomas San Antonio Spurs San Antonio Spurs
Ronny Turiaf Los Angeles Lakers Golden State Warriors
Beno Udrich Sacramento Kings Sacramento Kings
Delonte West Cleveland Cavaliers Cleveland Cavaliers
Jason Williams Miami Heat Los Angeles Clippers
Louis Williams Philadelphia 76ers Philadelphia 76ers
Antoine Wright Dallas Mavericks Dallas Mavericks
Dorell Wright Miami Heat Miami Heat
Lorenzen Wright Sacramento Kings Cleveland Cavaliers
2010] DOES THE NBA STILL HAVE “MARKET POWER?” 589

Exhibit II: Current NBA Players Raised in Eastern Europe (No U.S.
Birthplace or College Experience) 230

Player Team Country of Origin

Omer Asik Chicago Bulls Turkey
Andris Biedrins Golden State Warriors U.S.S.R.
Goran Dragic Phoenix Suns Yugoslavia
Semih Erden Boston Celtics Turkey
Kyrylo Fesenko Utah Jazz U.S.S.R.
Marcin Gortat Phoenix Suns Poland
Zydrunas Ilgauskas Miami Heat U.S.S.R.
Ersan Ilyasova Milwaukee Bucks Turkey
Andrei Kirilenko Utah Jazz U.S.S.R.
Nenad Krstic Oklahoma Thunder Yugoslavia
Darko Milicic Minnesota Timberwolves Yugoslavia
Timofey Mozgov New York Knicks U.S.S.R.
Mehmet Okur Utah Jazz Turkey
Zaza Pachulia Atlanta Hawks U.S.S.R.
Sasha Pavlovic Dallas Mavericks Yugoslavia
Nikola Pekovic Minnesota Timberwolves Montenegro
Vladimir Radmanovic Golden State Warriors Yugoslavia
Peja Stojakovic Toronto Raptors Yugoslavia
Hedo Turkoglu Orlando Magic Turkey
Beno Udrih Sacramento Kings Yugoslavia
Sasha Vujacic New Jersey Nets Yugoslavia

Exhibit III: Current NBA Players Raised in Western Europe (No U.S.
Birthplace or College Experience) 231

Player Team Country of Origin

Alexis Ajinca Dallas Mavericks France
Andrea Bargnani Toronto Raptors Italy
Nicolas Batum Portland Trailblazers France
Marco Belinelli New Orleans Hornets Italy
Rodrigue Beaubois Dallas Mavericks France
Jose Calderon Toronto Raptors Spain
Boris Diaw Charlotte Bobcats France
Rudy Fernandez Portland Trailblazers Spain

230. See NBA Teams, supra note 9.

231. See NBA Teams, supra note 9.
590 RUTGERS LAW JOURNAL [Vol. 41:549

Danilo Gallinari New York Knicks Italy

Marc Gasol Memphis Grizzlies Spain
Pau Gasol Los Angeles Lakers Spain
Hamed Haddadi Memphis Grizzlies Spain
Jonas Jerebko Detroit Pistons Sweden
Ian Mahinmi Dallas Mavericks France
Dirk Nowitzki Dallas Mavericks Germany
Tony Parker San Antonio Spurs Belgium & France
Johan Petro New Jersey Nets France
Mickael Pietrus Phoenix Suns France
Thabo Sefolosha Oklahoma Thunder Switzerland

Exhibit IV: Current NBA Players Raised Outside of North America and
Europe (No U.S. Birthplace or College Experience) 232

Player Team Nation of Origin

David Andersen New Orleans Hornets Australia
Leandro Barbosa Toronto Raptors Brazil
Omri Casspi Sacramento Kings Israel
Carlos Delfino Milwaukee Bucks Argentina
DeSagana Diop Charlotte Bobcats Senegal
Christian Eyenga Cleveland Cavaliers Congo
Manu Ginobili San Antonio Spurs Argentina
Nene Hilario Denver Nuggets Brazil
Serge Ibaka Oklahoma Thunder Zaire
Yi Jianlian Washington Wizards China
D.J. Mbenga New Orleans Hornets Zaire
Yao Ming Houston Rockets China
Andres Nocioni Philadelphia 76ers Argentina
Luis Scola Houston Rockets Argentina
Kevin Seraphin Washington Wizards French Guiana
Tiago Splitter San Antonio Spurs Brazil
Anderson Varejao Cleveland Cavaliers Brazil

232. See NBA Teams, supra note 9.

2010] DOES THE NBA STILL HAVE “MARKET POWER?” 591

Exhibit V: International Men’s Basketball League Quotas on non-EU

Players 233

Country of Foreign League Name Maximum Number

Basketball League of Non-EU Players
Allowed per Team
Austria Admiral Basketball 8 of 16 contracts
Bundesliga (ÖBL) must be Austrian
Belgium Ligue Ethias (BLB) 15 (no limit)
France Ligue Nationale de 6
Basket (LNB)
Germany Basketball-Bundesliga 18 (no limit)
(BBL)
Greece A1 Ethniki (HEBA) 2
Italy Lega Basket Serie A 4
(LEGA)
Lithuania Lietuvos Krepšinio Lyga 5
(LKL)
The Netherlands Federatie Eredivisie No limit
Basketball (FEB)
Russia Super League 3
Spain Liga ACB 2
Switzerland Ligue Nationale de 3
Basket (LNBA)
United Kingdom British Basketball League 3
(BBL)

233. See European Domestic Competitions, EUROLEAGUE BASKETBALL,

http://www.euroleague.net/uleb/domestic-leagues/domestic-leagues-2007-2008/main (last
visited May 12, 2010).