In doing research for a paper I am writing for my Sports and Society class I came across this article which discusses franchise movement court cases specifically the Raiders case. It also mentions the case of the San Francisco Seals v. National Hockey League, which might relate to the discussion on here earlier about a teams chances of fighting the league in court if the league blocks a proposed move. While there was a lot of mention of the more famous Davis case there was no mention of this case. Apparently the decision, which allowed the league to block the Seals move to Vancouver, still applies to the NHL (although I'm not sure if that is because it deals with the NHL explicitly or it just hasn't been challenged).
It's an academic article that was peer reviewed and appeared in the Fall 1997 addition of Antitrust Bulletin. I'm also assuming that the San Francisco Seals mentioned are the same team known on the ice as the California Seals. Here is what the article said about the case:
So two questions I have for those that might be more knowledgeable about this case.
1. Does anyone have anymore information on the case? This is the first I have ever heard about the case and am interested in hearing more about it.
2. How would this decision any effect any hypothetical case against the league challenging a block of a franchise relocation?
It's an academic article that was peer reviewed and appeared in the Fall 1997 addition of Antitrust Bulletin. I'm also assuming that the San Francisco Seals mentioned are the same team known on the ice as the California Seals. Here is what the article said about the case:
Here's the Link but You probably have to have access to Proquest to read the full article.Before the Raiders case, San Francisco Seals, Ltd. v. National Hockey League, et al.2 was the prevailing antitrust case involving relocation restrictions in professional sports. In this case, the National Hockey League (NHL) was ruled to be a "single entity" and hence not in violation of antitrust law since a firm cannot conspire with itself. The Seals decision continues to apply to the NHL, but was rejected in both the Raiders case and a case involving the San Diego Clippers and the National Basketball Association.
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II. The San Francisco Seals case and the single entity argument
The issue before the court in Seals was whether the NHL could lawfully prevent a member franchise from relocating its team from one city to another, in this case, from San Francisco to Vancouver. The Seals organization filed suit against the NHL claiming that the league's prohibition violated both sections 1 and 2 of the Sherman Act. The Seals asserted that the league's constitution violated section 1 by prohibiting clubs from relocating their operations. The section 2 claim rested on the argument that the relocation request was denied in an attempt to keep the San Francisco market in the NHL and thereby discourage the formation of a rival team or league in that location. The court ruled that the Seals did not have standing for a section 2 claim, since the team was not a member of the allegedly harmed group.5 We focus our attention on the section 1 claim.
In ruling on the section 1 claim, Judge Curtis established that the relevant market for the antitrust claim was the "production of professional hockey games before live audiences . . . in the United States and Canada."6 He further concluded that, within this market, member teams of the NHL did not compete in an economic sense. Because the Seals organization intended to maintain its membership in the league, it was in no way in competition with the league and its other members. Instead, Curtis found:
As a member team, [the Seals] will continue cooperating with the defendants in pursuit of [the league's] main purpose, i.e., producing sporting events of uniformly high quality appropriately scheduled as to both time and location so as to assure all members of the league the best financial return. In this respect, the plaintiff and defendants are acting together as one single business enterprise, competing against other similarly organized professional leagues.7
Curtis went on to argue that the very nature of the Sherman Act requires there be at least two independent business entities before one can find a conspiracy or collaboration in restraint of trade. Despite the fact that the individual member teams of the NHL are independently owned, finding that the league operated as a single entity precluded the possibility of conspiracy.
In dismissing the plaintiff's legal reliances, Curtis continued to emphasize that the member franchises were not economic competitors in the relevant market, although he acknowledged that they may "compete economically, to a greater or lesser degree, in some other market not relevant to our present inquiry."8 He gave no further indication as to what those margins of competition might be. Presumably, such margins might include competition for a common base of fans and live ticket receipts when two teams are located in the same geographic region. This is clearly the inference drawn in Raiders. Such competition would have been irrelevant in Seals since no other NHL team was located in Vancouver at the time.
So two questions I have for those that might be more knowledgeable about this case.
1. Does anyone have anymore information on the case? This is the first I have ever heard about the case and am interested in hearing more about it.
2. How would this decision any effect any hypothetical case against the league challenging a block of a franchise relocation?
