Major League Soccer (MLS) is the top-flight soccer league in the United States. Unlike professional soccer leagues in other nations, MLS does not use a federation model. In a federation model, a governing association controls each level of the sport, from the amateur ranks that play on Saturday afternoons to the highly paid professionals. In this structure, any team is theoretically capable of reaching the highest level of the pyramid because teams are promoted and relegated up and down the ranks at the end of each season. Instead, the structure of MLS is more akin to other American leagues: private associations in which the owners dictate operation in strictly professional ranks.
Like the other American sports leagues, MLS has largely seen its structure challenged under antitrust law. In Fraser v. Major League Soccer, 284 F.3d 47, 61 (2002), a group of players argued MLS teams’ agreement not to compete for player services was in violation of the Sherman Act. The First Circuit Court of Appeals disagreed because the appellants failed to make the requisite relevant market showing. Id. at 69. Further, the district court’s finding that MLS was a single entity for antitrust purposes was not reversed because the court did not need to decide the issue. Id. at 56.
Within the typical American league structure, the single entity antitrust exemption has not been widely adopted because teams do compete against one another for the services of players, fans, etc. While Fraser leaves the door open for further discussion of MLS and the single entity exemption, recent developments in MLS have revealed a window for claims under the law of private associations. While the remedies are not as lucrative as the treble damages in antitrust cases, the law of private associations could require the league to change its practices. Read more »