Chicago Professional Sports Limited Partnership V. National Basketball Association

Chicago Professional Sports Limited Partnership v. National Basketball Association 9th Circuit Court of Appeals 95 F.3d 593 (7th Cir. 1996) Search Terms: broadcast, antitrust, Rule of Reason, Sports Broadcasting Act, Sherman Act Facts The Bulls wanted to broadcast more of their games over WGN, a television superstation carried nationally on cable. Since 1991 the Bulls and WGN have been allowed by injunction to broadcast 25 to 30 games per year. The district court made a 30 game allowance permanent and held the NBA’s fee excessive. Chicago wants to broadcast 41 games per year over WGN; the NBA contends that antitrust laws allow it to fix a lower number (15 to 20) and collect the tax proposed. The NBA signed a contract that transferred all broadcast rights to NBC. NBC only shows 26 games during the regular season and the network contract allows the league and its teams to permit telecasts at other times. Each team has the right to broadcast all 82 of its regular season games unless NBC casts that game. Issue The issue on appeal is whether NBA teams should be treated as a single entity or a group of independent firms. Holding The Ninth Circuit held that district court properly condemned the NBA’s superstation rule under the rule of reason analysis because (a) the league did not argue that it should be treated as a single entity and (b) the anti-free-riding justification for the superstation rule failed because a fee collected on nationally telecast games would compensate other teams for the value of their contributions to the game being broadcasted. Although, according to Copperweld, the teams of the league have competing interests, the NBA may be treated as a single firm in that it produces a single product. The Ninth Circuit decided that when acting in the broadcast market the NBA is closer to a single firm than to a group of independent firms; therefore, the Bulls and WGN must respect the league’s limitations on the maximum number of superstation telecasts. Summarized By: Brian Raterman