Single Entity?

The NFL, as well as other professional sports leagues in the US, have repeatedly been suspected of violating antitrust regulations. NFL v. American Needle  case was only the most recent in a row of cases dating back to the Oakland Raiders  case (consult Lehn and Sykuta, 1997) in the 1980s. The NFL has often come forward using the "single entity" defense, arguing that the league is basically one big enterprise not a trust formed by a number of teams as individual business entities.

In the wake of last year's lockout and the result that last year's NFL season is an uncapped (i.e. meaning that no salary cap would limit player salaries) two teams reportedly have tried to benefit from the situation. The Washington Redskins as well as the Dallas Cowboys have structured some contracts of their players to make the front-loaded in a way to shift substantial parts of the salaries into the 2010/2011 season. This would certainly create a competitive advantage in coming years as they will have an advantage in terms of salary cap space.

It has now surfaced that the NFL has taken away salary cap space from these two teams: $36 million in cap space from the Redskins and $10 million from the Cowboys. The league split this sum and handed it to 28 remaining teams, who receive an additional $1.6 million in cap space. Both teams argue that the NFL has no point in doing so, especially as 2010/2011 was an un-capped season. Some other teams who were obviously affected by what the Redskins and Cowboys did complained and the Washington Post cites the saying:

All the clubs were warned not to do anything to create a competitive advantage when the salary cap came back, and that's what [the Redskins] did [...].

So what do we have here: We have an organization, which is per constitution of the league the group of all team owners, telling teams not to take advantage of the lack of regulations. We have two individual organizations operating within this league who sought (which is only rational) an advantage and did nothing wrong because the regulations were missing. The Redskins and Cowboys acted like individual entities and are defending themselves as single entities now. The Cowboys issued the following statement:

The Dallas Cowboys were in compliance with all league salary cap rules during the uncapped year. We look forward to the start of the free agency period, where our commitment to improving our team remains unchanged.

As far as I am concerned they are perfectly right. And this recent events should really make antitrust officials even more suspicious. In the American Needle case (consult Brad Humphreys' excellent resource page for details)  the NFL actively sought antitrust immunity. The final ruling denied this. The way the NFL handled this recent salary cap issues is another strong argument against the single entity defense. Should the Cowboys and Redskins be willing to go to court I think they might have a good chance to win this case. Does not sound like a single entity to me...