Lax Antitrust Enforcement: Analysis of the Premier Lacrosse League-Major League Lacrosse Merger

BY: ALEXANDER GATES

Background

The Premier Lacrosse League (PLL) was founded by brothers Mike and Paul Rabil in 2018.[i] The PLL marketed themselves to the existing professional lacrosse players by addressing pain points that had soured many players. The league promised players a full-time job that included higher salaries, better media rights deal, health insurance benefits, and an equity stake in the league.[ii] The PLL is unique to the entire sports world in that they use a tour-based model of play which does not include teams that are associated with a city or region.[iii] Rather, every team has its own name and by nature of the arrangement is mobile.

Major League Lacrosse (MLL) was established in 1999 by Jake Steinfeld, Dave Morrow, and Tim Robertson.[iv] Unlike the PLL, the MLL follows the traditional structure of a sports league where owners own the franchise separate from the league and where teams are associated with their home city or region.[v] There were several deficiencies to the existing MLL structure which created the opportunity for the Rabil brothers to establish their own league. The MLL was considered to be a part-time job, in which a majority of the players were required to have a second job in order to survive financially.[vi] Because it was a part-time job, the league had no requirement to provide its players with healthcare benefits.[vii]

On December 16, 2020, the PLL and MLL merged “with subsequent season operations and activities to formally exist under the Premier Lacrosse League”.[viii] As part of the deal, the PLL would “retain the rights to all of the former MLL teams for future expansion considerations”.[ix]

PLL – MLL Post Merger Analysis

Section 7 of the Clayton Act deals with the enforcement of mergers and acquisitions by determining whether the consolidation “may be substantially to lessen competition, or to tend to create a monopoly”.[x] The traditional Section 7 analysis of a horizontal merger by antitrust regulators includes five steps to determine whether or not it has anti-competitive tendencies.[xi] The relevant parts of this analysis include (1) defining the market, (2) determining the market share, (3) defining the market concentration before and after a proposed merger, (4) concluding if the merger will increase market concentration, and (5) balancing the pro-competitive and anti-competitive effects of the proposed merger.[xii]

In applying the first prong of the analysis, it can be argued the relevant market is nationwide. Similar to American Football League v. National Football League, the court determined the relevant market to be nationwide because “each league recruited players and coaches throughout the nation”.[xiii] The same is true of the PLL and the MLL.

With respect to the second prong, it is hard to determine the market share of each league and is considered a moot point in the grand scheme of things. However, with the third prong, it is clear that the two leagues will not be competing for market share after the merger as they were doing so before. Therefore, in accordance with the fourth prong, the PLL will have control over the entire market share for outdoor lacrosse.

The fifth prong poses some serious issues in terms of questioning the merger’s pro-competitive and anti-competitive nature. Immediately, one can see the anti-competitive nature of the merger as the PLL is the only professional outdoor lacrosse league at the moment. They dominate not only with the talent they attract but also with their media rights belonging to NBC. This might pose a threat to new entrants in the form of a new league to rival the PLL. This merger is also anti-competitive in nature as not all MLL players could have a spot on a PLL team after the merger. As seen in Robertson v. National Basketball Ass’n, we could possibly see litigation regarding the players who were planning to play for an MLL club but lost the chance because the organization was eliminated by the merger.[xiv] On the other hand, it can be argued the merger has pro-competitive effects. The MLL was stagnant for many years in terms of exposure of the league and the players. Even though professional lacrosse is relevantly new as compared to other established sports leagues, it is considered to be one of the fastest growing sports in North America. There is ample opportunity for a new entrant into the world of lacrosse as the PLL has changed the game for the better and has allowed the opportunity for other leagues to be created to improve the game.

Conclusion

As mentioned previously, the PLL – MLL merger occurred in 2020 and had no antitrust issues. However, it can be seen in the fifth prong of Section 7 of the Clayton Act that having just one lacrosse league has more anti-competitive effects than pro-competitive effects.

Alexander Gates is a JD/MBA candidate in the class of 2022 at Quinnipiac University School of Law. He is also the Editor-in-Chief of the Quinnipiac Health Law Journal. If you would like to contact him, please e-mail [email protected].

[i] Caron, E. (2019, May 15). Inside the making of the Premier Lacrosse League. Retrieved July 07, 2020, from https://www.si.com/lacrosse/2019/05/15/paul-rabil-pll-premier-lacrosse-league-players-business-sports-startups-nbc [ii] Ibid [iii] Baker, K. (2019, February 13). Premier Lacrosse League models Silicon Valley for modern fans. Retrieved July 07, 2020, from https://www.axios.com/premier-lacrosse-league-silicon-valley-startup-ccae48c0-599a-4a75-927c-fd287f833f51.html [iv] About MLL. (n.d.). Retrieved July 07, 2020, from https://majorleaguelacrosse.com/news/2019/2/25/about-mll.aspx [v] About MLL. (n.d.). Retrieved July 07, 2020, from https://majorleaguelacrosse.com/news/2019/2/25/about-mll.aspx [vi] Ibid [vii] Ibid [viii] PLL, (2020, December 16). The Premier Lacrosse League and Major League Lacrosse Announce Merger, from https://premierlacrosseleague.com/articles/the-premier-lacrosse-league-and-major-league-lacrosse-announce-merger [ix] Ibid [x] 15 U.S.C. 18 (2012) [xi] King, Jaime S. et al., The Anti-Competitive Potential of Cross-Market Mergers in Healthcare. Saint Louis University Journal of Health Law & Policy, Volume 11, Issue 43 [xii] id. [xiii] Am. Football League v. Nat’l Football League, 323 F.2d 124 (4th Cir. 1963) [xiv] Oscar Robertson v. National Basketball Assn, 1970 WL 532