What Is the NBA?

Posted by Social Science Research Network

What Is the NBA? – Nadelle Grossman (Marquette University – Law School)

ABSTRACT: The NBA’s organizational structure is curious. While courts at times refer to the NBA as a joint venture and at other times as a single entity, their analyses are conducted not for state organization law purposes but to assess the NBA’s compliance with federal antitrust law. Commentators, too, consistently address the NBA’s organizational structure only under antitrust law and not state organization law. As I argue, given the different purposes of these two legal regimes — antitrust law to protect consumers through preserving competition, and state organization law to ensure managers are faithful to the business purpose and to create a default structure among owners and managers — conclusions about the NBA’s organizational structure for purposes of compliance with antitrust law does not control the analysis of the NBA’s structure for purposes of state organization law.

To fill the gap in case law and commentary, this article analyzes the NBA’s organizational form under state organization law. This analysis is important because the NBA’s organizational form impacts the rights and duties of the member team-owners of the NBA. If, for example, the NBA is a joint venture partnership under state organization law — that is, an association of team owners who have come together to pursue a limited scope business for profit — then by default, its members would owe fiduciary duties to the other members and any member could seek judicial expulsion of a recalcitrant member.