Muncziak v. Aisley was a 1980 United States Supreme Court ruling that determined that professional sports leagues were subject to antitrust and antimonopoly legislation and thus could be regulated by the federal government's commerce clause powers. The case initially started over the attempted absorption of two franchises from the financially struggling Western Football Association by the more powerful American Football League in 1975, which went to suit and eventually reached the Supreme Court on appeals. It is the only case in the 20th century to have a unanimous decision without a single dissenting opinion.
Attempted Purchase of WFA
In 1975, the nascent Western Football Association was struggling to turn a profit and looked as if it were going to follow the same path as other West Coast leagues that had come before it. Its flagship franchises, the San Francisco 49ers and Los Angeles Rams, were considering moving to the American Football League unless they could save the financially strapped league.
AFL Commissioner Dave Aisley suggested purchasing the WFA and absorpbing it into the AFL, which he believed would make his own league more competitive with the popular National Football League on the East Coast and in the South. However, he as only interested in purchasing the 49ers and Rams - the other eight teams he intended to let vanish along with numerous other failed expansion league franchises.
Harry Muncziak Suit and Federal Court of Appeals
Harry Muncziak, the owner of the Vancouver Blazers, was enraged and sued the AFL, claiming that they were trying to form a monopoly and violating antitrust law by purchasing parts of a company and discarding the rest. Under the 1937 Edwards-Hale Act, Muncziak argued, a company must be audited by the Securities and Exchange Commission before it could be dismantled by a competitor to make sure that due compensation was given.
When a federal judge in Oregon surprisingly ruled in Muncziak's favor, Aisley petitioned the ruling to the Federal Appeals Circuit, as he claimed the AFL and WFA were neither companies nor monopolies, merely partnerships between individual companies that had agreed to work together. He cited the 1958 acquisition of the NFL's Buffalo Bills by the AFL as an example of an individual football franchise choosing to play the free market and join a new league for better competition, despite the enormous controversy surrounding that move at the time.
The federal court of appeals sided with Aisley, but Muncziak appealed to the United States Congress and requested an SEC investigation into the AFL to determine the legality of purchasing franchises away from other sports leagues. Muncziak claimed that a dangerous precedent could be set by "predatory businessmen" and that rival leagues could begin forming to steal away franchises in other sports if the teams disagreed with the league as a whole.
The Congressional Commerce Committee and the Senate Antitrust Subcommittee heard the cases of both sides and agreed with the Oregon court's decision - that a sports league was a business, not a partnership of individual, independent businesses. Aisley appealed to the Supreme Court in early 1980, even though the WFA had survived the worst of its financial trouble and was enjoyed as cheap, popular entertainment amid the ongoing 1979-1984 economic recession.
Supreme Court Decision
The Supreme Court voted unanimously that sports leagues were businesses, not partnerships of individual businesses, and that only the league itself could decide if it wanted to rid itself of or add a franchise. Justice Albert Hadden wrote,
"Under my interpretation of existing antitrust law, the sports league as Mr. Aisley argues it exists is indeed a monopoly, and the only way of turning these popular leagues into something other than a monopoly is by making them a single company, not several companies trying to outflex competition."
The decision was hailed as a saving grace to the American sports community, which would stop rival leagues from attempting to pirate one another's teams (like the attempted 1971 United Baseball Association's attempts to steal away struggling MLB franchises) and would grant more power to the league over their individual teams.