## Facts

- The NBA operated as an unincorporated association of member teams and functioned as a joint venture to produce a professional basketball league.
- Under the NBA Constitution, a transfer of team ownership (and related league membership) required approval by the NBA Board of Governors, by a three-quarters affirmative vote.
- Irving H. Levin and Harold A. Lipton contracted to purchase the Boston Celtics and applied to the NBA for approval of the transfer.
- At a June 15, 1972 Board meeting, the proposed transfer failed by vote (2 in favor, 13 opposed, 1 absent); after plaintiffs requested and received a personal hearing, a second vote produced the same result.
- Plaintiffs asserted the “real” reason for rejection was their friendship and business association with Seattle SuperSonics owner Sam Schulman, who was disliked by other owners.
- The NBA asserted it denied approval due to conflict-of-interest concerns based on plaintiffs’ business ties with Schulman, including concerns about prohibited or perceived interlocking control of multiple franchises.
- After the denial, plaintiffs sold their contractual rights to another buyer and then sued the NBA, alleging federal antitrust violations.
- Defendants moved for summary judgment; plaintiffs cross-moved for partial summary judgment on liability.

## Issues

1. Whether the NBA’s refusal to approve plaintiffs’ purchase of the Boston Celtics constituted an unlawful restraint of trade or other Sherman Act violation.
2. Whether excluding particular prospective owners, while the franchise continues operating under different ownership, constitutes injury to competition rather than only to the excluded applicants.
3. Whether plaintiffs produced sufficient probative evidence of anticompetitive intent or effect to survive summary judgment.

## Decision

- The court granted defendants’ motion for summary judgment and dismissed the complaint.
- The court denied plaintiffs’ cross-motion for partial summary judgment.
- The court held plaintiffs failed to show anticompetitive injury or significant probative evidence of a Sherman Act violation arising from the membership/ownership denial.

## Legal Principles

- Antitrust law protects competition and the public interest in competitive markets, not the private expectations of individual applicants seeking entry.
- A league’s exclusion or membership decision is not actionable under the Sherman Act without evidence of anticompetitive intent or substantial anticompetitive effect in a relevant market.
- Conduct affecting only the identity of an owner of an existing franchise, without reducing output or otherwise harming consumers or the competitive process, generally does not establish antitrust injury.
- Summary judgment is appropriate in antitrust cases when the nonmovant fails to provide significant probative evidence beyond speculation or conjecture.
- Professional sports leagues are subject to antitrust scrutiny, but internal governance measures (including conflict-of-interest rules) may be legitimate absent proof they function as market-wide restraints.

## Conclusion

The court concluded that the NBA’s refusal to approve Levin and Lipton as purchasers of the Celtics, even if influenced by internal league politics, did not demonstrate a restraint harming competition or consumers; because plaintiffs offered no significant probative evidence of anticompetitive effect or scheme, the NBA was entitled to summary judgment and the antitrust claims were dismissed.


Levin v. Nat’l Basketball Ass’n, 385 F. Supp. 149 (S.D.N.Y. 1974)