Facts about Soccer
Eight Major League Soccer players filed a suit against the MLS and U.S Soccer.
This all stemmed from the MLS having the power to establish player salaries, recruit players, pay players with MLS funds, and decide which team they’d play for. Fraser, along with other MLS players felt that the MLS had too much control over and therefore brought along the lawsuit. They first went after a review from the U.S district court of Massachusetts which gave summary judgement to the opposing party. The MLS players felt that the league lessened the player’s contributions due to the fact that the company acted as a single entity. The players argued it was a violation under antitrust law because the MLS and U.S Soccer federation got together, or conspired illegally to make the professional soccer market a monopoly. The district court held in support of the MLS, which lead to Fraser’s appeal.
Fraser raised several different questions for the court to answer as he accused the MLS of multiple aspects of antitrust violation. The plaintiffs felt that multiple sections (section one, two, and seven) of the Sherman anti-trust act were violated. Did the MLS violate section 1; did they utilize lots of market power in an already defined market in order to make an imbalance in competition? In regards to section two, did the MLS try to conspire and monopolize a market? In section seven’s violation, did the MLS try to diminish competition?
How it works
In section one of the Sherman act, the court had to look if the MLS used their market power in a defined market and if it negatively affected coopetition in that market. They also had to see if they were acting as a single entity. For section two the court has to see if the MLS tried to monopolize the market. For section seven the court must see if the Clayton act is violated and if the MLS tried to limit competition.
The MLS is considered a single entity. This means each team is owned by the league’s investors. Because of the way the MLS is designed as a single entity it’s protected from antitrust laws. The MLS didn’t diminish competition because when it was created there was no current market for division I pro soccer in the U.S. The court ruled the MLS was following structure of a liability corporation. For section one of the alleged violation the court found that the MLS’s structure wasn’t an illegal or per se violation. Fraser would’ve had to show that the MLS had strong market power and that the league’s practices negatively affected market competition. The court disagreed with Fraser and felt that the remand on section one was unnecessary. For section two, the jury found that Fraser didn’t establish the relevant market in which he felt the MLS monopolized. Therefore, the district court upheld the jury’s finding. For Fraser’s claim against section seven of the Clayton act, the court gave the MLS summary judgement because the MLS’s formation didn’t include and merging of businesses that were already there. Therefore, the district court’s decision was affirmed.
The plaintiffs couldn’t prove the MLS monopolized the market illegally. They found the MLS does in fact have competition because the league competes with other leagues overseas. This means MLS couldn’t monopolize a market for player service in the United States, which Fraser originally argued. They upheld the jury’s finding that the MLS is a single entity and can’t conspire amongst itself and their own investors, therefore ruling in favor of the MLS.