When we think about monopolies, Big Tech comes to mind. Or maybe that board game that has started many family conflicts. But it’s competitive sports leagues that seem to be guilty of the most anti-competitive business practices. The recent suspension of a group of PGA golfers is just the tip of the iceberg. Here are some of the biggest examples of sports sounding the monopoly alarm in this week’s Five For Friday.
#5: UEFA and FIFA
UEFA and FIFA are no strangers to controversy for acting as a cartel. Last spring, the soccer governing bodies stopped a proposed European Super League in its tracks. Some of the best teams in the world attempted to break away to start their own league in an effort to compete with the UEFA Champions league. It didn’t pan out. Two days after it was officially announced, nine of the 12 founding teams jumped ship following accusations of elitism from fans. The last three teams, Real Madrid, Barcelona and Juventus, will get their day in court this summer. Despite the anti-competitive accusations, more than a dozen European Union nations actually support UEFA in the fight.
Maybe it should have been number fore. The PGA’s status as a monopoly has been a hot topic of conversation recently. The tour suspended 17 of its golfers for taking part in the Saudi Arabia-funded LIV Tour. The suspensions included a number of past PGA major winners including the “Lefty” himself, Phil Mickelson. The PGA claims it denied the players’ bid to play in the new tournament, which offers big payouts, resulting in the ban. But it seems geopolitics also played into the decision as many have talked about Saudi civil and human rights abuses. Mickelson and others are still allowed to play in the U.S. Open because it is sanctioned by the USGA instead of the PGA.
The Professional Rodeo Cowboys Association may not be quite as mainstream as some of the other leagues on the list, but they are the biggest and oldest governing body in the sport. The PRCA’s stranglehold on the sport was evident after some of the world’s top cowboys tried to launch Elite Rodeo Athletes. The move was inspired by their displeasure with some elements of the PRCA. In response, the old guard PRCA banned anyone with financial interest in any competing association from participating in their events. A judge agreed to hear the ERA’s antitrust case, but those involved eventually dropped it, saying they wanted to continue to grow the sport. The fledgling organization only operated for one season and many of the cowboys involved rode back to the PRCA.
The NFL is the most lucrative sports league in the world with an annual revenue of roughly $18 billion in 2021. The XFL and USFL have made efforts to diversify the professional football landscape with little impact. The USFL’s first failed attempt in the 1980s actually involved a future president. The NFL claims it is not a monopoly but rather a cartel of 32 independent businesses under one governing body. The independence of the teams was called into question after the league made a multi-million dollar settlement with Colin Kaepernick. The former 49ers quarterback contended the entire NFL colluded to keep him off teams after protesting racial injustice in the United States by taking a knee during the playing of the national anthem.
Major League Baseball has a century-long antitrust exemption from Congress. That exemption to the Sherman Antitrust Act allows the league to increase ticket prices and keep salaries low. It’s easy to look at the situation and see superstar pitcher Max Scherzer making $43 million this season. But keep in mind, a AAA baseball player makes an average of $700 per week. Scherzer makes more than 20 times that for each pitch he throws. After its most recent off-season lockout, Sen. Bernie Sanders, I-Vt., called for the exemption to be removed. Just this week, the Justice Department said a federal court should limit that exemption.