Pro Sports League Antitrust ‘Beliefs’: Applied Theory and the Rule of Reason

Abstract

In antitrust rule of reason cases, courts weigh anticompetitive harm against consumer welfare offsets. In sports cases, the courts appear to accept claims that fans prefer more competitive balance to less, so that a potential welfare offset is any added enhanced competitive balance attributable to the anticompetitive activity. In addition, courts often decide that less intrusive alternatives may be available to accomplish the same competitive balance gain. From the applied theory perspective, this is troublesome. Theoretically, whether fans prefer more balance is a hypothesis about preferences that needs to be examined in detail for any particular case. Applied theory also is of aid in assessing whether a particular device under scrutiny, including so‐called less intrusive alternatives, should even be predicted to enhance balance. Wading through the foregoing produces food for thought for the courts. Copyright © 2016 John Wiley & Sons, Ltd.

Disaggregated Attendance Demand: Comparing Daily Ticket Purchasers and Season Ticket Holders in K-League 1

“…Sung and Mills (2018) found a U-shaped relationship between stadium attendance and the home team's winning probability, providing evidence contradictory to the UOH. As such, there is still a need for substantial examination of fan preferences for outcome uncertainty in various professional sports contexts, as Fort (2017) noted. However, recent empirical studies on European soccer leagues have revealed that fans are loss-averse and prefer games with more certain outcomes (Cox, 2018, on the EPL; Martins & Cró, 2018, on the Portuguese Primeira Liga; Besters et al, 2019, on the Dutch Eredivisie).…”

Broadcaster Choice and Audience Demand for Live Sport Games: Panel Analyses of the Korea Baseball Organization

“…Overall, uncertainty of outcome hypothesis is a form of speculation of fan preferences, which are assumed to be inherently different from individual to individual. Thus, further investigation is needed to reveal fan preferences in various contexts, as Fort (2017) noted.…”

Moments of Competitive Balance in Major League Soccer

“…These leagues argue that domination by a single champion would result in a loss of fan interest, or more generally that an unequal distribution of competitiveness across teams may eventually hurt aggregate profits due to waning fan interest (Neale, 1964;Rottenberg, 1956). Leagues therefore claim to promote CB leading to outcome uncertainty (OU)as a fundamental characteristic of their economic success, which has long been used as a central defense for favorable antitrust treatment in North America (Fort, 2017).…”

“…Given this mixed evidence, and as noted by Fort (2017), individual leagueswhich vary in their structure, fan base, and labor supplyrequire careful examination and consideration for consequences of league CB and OU. For example, Major League Soccer (MLS) adopted a relatively unique single-entity structure upon its founding.…”

“…Our examination contrasts with this approach, using an estimate of CB by measuring the distribution of performance at the team level across MLS, with various unbalanced schedule changes. We follow much of the literature on tracking of CB, and how changes to CB may or may not be coincident with league policy changes, an exercise of noted importance by past work due to heterogeneity in policy implications at the league level (Fort, 2017;Fort & Lee, 2006;Fort & Lee, 2007;Jang et al, 2019;Lee & Fort, 2005;Lee & Fort, 2012;Mills & Salaga, 2015).…”