In King James We Anti-Trust: Are LeBron James and Dwyane Wade Guilty?

S.N. CounselContributor IJuly 11, 2010

When Lebron James, Chris Bosh, and Dwayne Wade held a private meeting last June to discuss their respective free-agent plans, it sparked concerns about free-agency collusion and its negative side effects for the NBA.  Their recent decision to join forces this season in Miami has reignited such concerns.   

At the time of the June meeting, the concern focused on star players agreeing to sign with separate teams, in different regions of the country or even different conferences.  Such an agreement, the theory went, would ensure that free agent players would not have to compete against each other directly, therefore maximizing their own pay, increasing their likelihood of making it deep into the playoffs, and allowing them to achieve greater individual accolades.  Now that three of the NBA’s top free agents have agreed to bring their talents to one team, the concern has changed –it now centers around the idea that this type of agreement compromises competition and disturbs the natural distribution of talent around the league.  As a result, individuals such as Dallas Mavericks owner, Mark Cuban, have called for more definitive rules about players “acting in concert.” 

Collusion is generally viewed as an agreement between two or more persons to limit open competition and gain an unfair advantage (e.g. price fixing, wage fixing, or divide the market).  Current NBA rules do not prohibit players from discussing or making free agency plans with each other during the free-agency period.  As anti-trust law typically focuses on employers rather than employees, there also appears to be no legal precedent that would prohibit free market workers from discussing or even planning their contract negotiations with prospective employers. 

But, could an argument be made for enacting certain restrictions on this type of collusion by NBA superstars, such as King James?  After all, collusion by NBA superstars is enough to change the economics of teams and the cities that house them.  For instance, Cleveland downtown businesses are projected to lose close to $50 million during the regular season next year due to Lebron James’ departure.  The franchise itself increased in value from $258 million to $476 million during James’ tenure in Cleveland. 

Whether you agree with it or not, do not be surprised if owners address the issue of collusion/tampering during the next collective bargaining agreement negotiations.

What do you think?  Please comment below.

*****SN Counsel focuses his journalism on sports law issues.