Isiah Thomas recently took to twitter to bless us (once again) with his recipe for a successful professional career in sports:
— Isiah Thomas (@iamisiahthomas) July 6, 2016
Don’t worry, Zeke, Nick Symmonds is listening.
Though a bum ankle will keep Symmonds from tasting gold in Rio, that doesn’t mean he won’t be trying to get paid from the sidelines.
In an effort to breeze by the monetary shackles placed on amateur athletes by governing sporting organizations (*cough* NCAA *cough*), and realize his market potential, Symmonds set off on a crusade—against the United States Olympic Committee (USOC) and USA Track & Field (USATF) no less—and filed a complaint in federal court alleging restraint of trade in violation of the Sherman Act. Specifically, Symmonds alleged that the USOC and USATF agreed (illegally) with “co-conspirators” (Nike, surprise!) to prevent businesses from sponsoring individual runners at the U.S. Olympic trials. This prevention would include Symmonds’ company, Run Gum (the named plaintiff).
The one exception to the USOC’s policy is that runners may display insignia of the manufacturer of the uniform on the uniform. The problem for Symmonds, and consequently Run Gum, is that Run Gum isn’t in the business of making running bibs. USOC rules, then, would prohibit the Run Gum logo from appearing anywhere in the trial facility. Symmonds, with no medium to advertise his company at the event, filed suit in federal court in the District of Oregon on behalf of Run Gum.
USOC and USATF moved quickly to have Run Gum’s suit dismissed. The USOC/USATF defended the case on the theory that Run Gum failed to state a viable cause of action (mainly, Run Gum failed to allege sufficient facts to demonstrate a violation of the Sherman Act). Additionally, they raised the defense that Run Gum’s claims were barred by the Ted Stevens Olympic and Amateur Sports Act (ASA)—a federal statute providing the USOC and USATF with “implied immunity” from an antitrust suit.
The district court ruled in favor of the USOC/USATF. The opinion, though, is interesting to the extent that the court spends significant time analyzing Run Gum’s claims under a general antitrust lens—only to conclude that Run Gum’s claims are barred by the ASA regardless.
The Antitrust Issue
Run Gum’s beef is almost exclusively focused with its inability to market at the U.S. Olympic trials, an event it dubs the “zenith” of domestic track and field competitions. Run Gum claimed that its inability to market at the event was a direct product of the USOC’s agreement with the USATF and other alleged “co-conspirators” (read, again: Nike)—an agreement that includes the policy to regulate advertising at the trials. The court did not necessarily disagree—holding that, as the USATF enforces USOC regulations at the trials, that it is possible that the USOC and USATF have agreed to restrain trade.
That said, the Court was not impressed with Run Gum’s claim that the USOC/USATF had market power within a “relevant market”—an element imperative to the survival of Run Gum’s claims. The court labeled Run Gum’s alleged market as “unnatural” and “impermissibly narrow”, viewing the alleged relevant market (the trials) as a single event, one-time deal. The court further noted that the USATF provides “alternative marketing forums” for potential advertisers. Run Gum, according the court, is not squeezed out of the market as the USATF provides “numerous” other track and field competitions with liberal advertising policies.
[Related: For more coverage of legal issues leading up the Rio Olympics, check out The White Bronco’s Sports Law in Rio page]
The court was even less impressed with Run Gum’s allegation that the USOC, USATF and the “co-conspirators” engaged in per se violations of the Sherman Act. The court first noted that per se violations are limited to restraint tactics that are anticompetitive in nature and lack any “redeemable” value—commenting that the U.S. Supreme Court has identified a “highly limited” number of trade restraints as per se violations. Rather than engage in a substantive analysis of whether the USOC and USATF were liable for such violations, the court simply held that Run Gum’s complaint “lacked the requisite evidentiary facts” to move forward at all.
Immunity Under the ASA
Regardless of whether Run Gum could have survived dismissal on the anti-trust end, the court held that it was all for naught as the ASA precludes such claims against the named defendants. Specifically, the court held that, under the ASA, the USOC is a “federally chartered corporation” charged by Congress with “financing the United States’ participation” in the Olympics. The USOC’s authority to implement regulations and policies—including apparel advertising during USOC events—is inextricably linked with its role in financing. The court underscores this theory by highlighting the fact that U.S. Olympic teams are not subsidized; rather, they are financed by USOC fundraising efforts. Run Gum’s advertising, according to the Court, would thwart such efforts and potentially undermine the USOC’s advertising campaign.
Run Gum’s appeal will attack both of the above issues, but any antitrust arguments will certainly take a back seat to challenging the Court’s decision under the ASA. Key, then, will be whether the appellate court will agree with the district court’s interpretation of the ASA. The dispositive question will undoubtedly be—does the ASA actually provide the USOC (and derivatively, the USATF) immunity from antitrust claims?
It is important to note that nowhere in the ASA is the USOC provided with express antitrust immunity. The district court supported its decision, consequently, by harping on the “intent” of the ASA. The court, reading the statute as a whole, determined that Congress intended to provide the USOC with broad sweeping, exclusive and unfettered ability to regulate advertising activities at its events in order to further its financing objectives.
Absent such black-letter language in the ASA, however, Run Gum certainly has a viable chance for overturning the district court’s decision at the appellate level. It is entirely possible that the appellate court will hold that, had Congress intended to provide the USOC with antitrust immunity, it would have expressly included such protective language in the ASA.
What may help Run Gum’s appeal is the lack of uniform (and local) precedent relied on. There appears to be, from the opinion, a lack of factually applicable case citation. The cases relied upon, however, unequivocally stand for the proposition that Congress intended to bestow—what the opinions refer to as “monolithic control”—upon its national governing bodies. The strength of the language is compelling.
Meanwhile, Symmonds will continue his quest to get paid. His injuries haven’t prevented him from seeking sponsors and creating alternative (and acceptable) methods of advertising for his supporters—he recently auctioned off his biceps as advertising space. Given standard appellate court timelines, however, he may have to wait several months (or longer) before he knows whether he will be able to proceed with his claims.