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