NBA Accused of Antitrust Violations as Lockout Standoff Heads for Courts

The National Basketball Association was sued by New York Knicks forward Carmelo Anthony over claims the league conspired to force players to agree to a “massive reduction” in compensation.

The complaint in federal court in Oakland, California, was filed yesterday by Anthony and four other NBA athletes on behalf of all players under contract with the association. The class- action complaint names the 30 NBA member teams as defendants. A similar group lawsuit was filed against the league by Caron Butler of the Dallas Mavericks in federal court in Minneapolis.

NBA players on Nov. 14 dissolved their union, a first for the group, to allow for antitrust lawsuits against the league after negotiations over a new labor agreement collapsed. The sides were negotiating over how to split money from a league that had about $4.3 billion in revenue last season. The NBA season was to start Nov. 1.

Anthony says the league’s lockout is an “illegal group boycott” that violates federal antitrust law, according to the complaint.

“Defendants have jointly agreed and conspired to boycott the players even after their disclaimer in an effort to coerce plaintiffs and all NBA players to agree to a new onerous system of anticompetitive player restraints and a massive reduction in compensation,” according to the complaint. “Defendants also agreed and conspired to fix the prices, terms and conditions of future player contracts.”

Mike Bass, an NBA spokesman, didn’t immediately respond to an e-mail message seeking comment about the lawsuits.

Four-Time All-Star

Anthony, 27, a four-time All-Star who now plays for the Knicks after spending the first 7 1/2 seasons of his NBA career with the Denver Nuggets, has a contract worth $65 million through the 2014-2015 season, according to the complaint.

The union’s disclaiming of interest, as the strategy is known, strips the NBA of antitrust protection that comes with a collective bargaining agreement and places the fight over how to divide the league’s annual revenue before the courts.

National Football League players, led by Super Bowl-winning quarterbacks Tom Brady, Peyton Manning and Drew Brees, similarly disavowed their own union after the collapse of labor negotiations in March and immediately prior to their launching a lawsuit accusing the richest U.S. pro sports league of antitrust violations.

David Boies

Anthony’s lawyer is David Boies of Boies, Schiller & Flexner LLP, who represented Vice President Al Gore in the 2000 U.S. presidential election and the late New York Yankees owner George Steinbrenner in a suit against Major League Baseball. Boies also represented NFL owners in their antitrust case against players this year.

NBA Commissioner David Stern canceled games through Dec. 15 and said the league needs 30 days after an agreement to resume regular-season play, allowing for contract signings and training camp.

The only other time labor unrest forced the NBA to lose games was in 1998-99, when the season was shortened to 50 games by a lockout. The two sides agreed on a contract in early January 1999, signed the agreement on Jan. 20 and began play on Feb. 5.

The NBA’s 30 teams generated more than $1.1 billion in gate receipts during the 2010-11 campaign, according to the annual postseason audit conducted by the league and the players’ union.

The players and the league had been in talks for about 2 1/2 years, and the league locked the players out on July 1 when the last collective bargaining agreement expired.

Gordon, Tolliver

Butler was joined by fellow players Ben Gordon, Anthony Tolliver and Derrick Williams in the Minneapolis complaint. The league’s illegal antitrust agreements allegedly include a boycott that eliminated free-agent market competition for players no longer under contract and one preventing the signing of players seeking their first NBA contracts, according to the complaint.

Both lawsuits seek group status for all players currently under NBA contract, a finding that the NBA actions violate federal law, treble money damages and a court order barring the conduct.

The case is Anthony v. NBA, 11-05525, U.S. District Court, Northern District of California (Oakland).

To contact the reporters on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net; Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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