Update on Harlem Ambassadors' FTC Complaint Against Harlem Globetrotters

Adam Kress of the Business Journal of Phoenix has an informative piece on a recent complaint filed by the Harlem Ambassadors with the U.S. Federal Trade Commission concerning the Harlem Globetrotters' use of exclusivity windows (Kress, "Competitor Files Federal Complaint Against Globetrotters," The Business Journal of Phoenix, 1/15/2006). The piece is available on MSNBC.com and we discussed the complaint back in December.

In sum, the Globetrotters negotiate exclusivity windows with arenas and other venues, and these windows restrict other basketball entertainment troupes from performing at the same venue eight weeks prior and six weeks after their shows. The Globetrotters claim that they only play three-and-a-half months a year, so the Ambassadors still have most of the year to play in those venues, and their failure to do so should suggest the obvious. The Ambassadors--through their CEO, Dale Moss--retort that the rest of year isn't basketball season. Moreover, notes Moss, "if the rest of the year was attractive, the Globetrotters would be playing then." Consequently, the Ambassadors--led by a female player, Lade Majic (pictured above with Charles Darwin)--appear to have little or no real chance of competing with the Globetrotters.

Kress interviews several persons for the story, including me:

Michael McCann, a leading sports attorney and professor at the Mississippi College School of Law, said the complaint could very well get the FTC's attention.

"I think the FTC will look into it and be concerned with the lack of competition over the years," he said. "Other acts like circuses have windows, but there still tends to be a good amount of competition."

McCann said the FTC also may view the three-and-a-half-month exclusivity window as excessive and make a change.

"This affects the Ambassadors, but also future teams that may want to get in on the action," he said. "Exclusivity windows have probably deterred others from trying to compete."

He also interviews Ralph Marchetta of the US Airways Center in Phoenix:

Such windows of exclusivity around performances are not uncommon, said Ralph Marchetta, vice president of entertainment for US Airways Center, where the Globetrotters will play two shows Jan. 21.

"In family-type show arrangements, it's fairly common to look for windows of protection because you're marketing to the same group of people," he said. "It can certainly be problematic, but it can be avoided."

Is this an example of survival of the fittest, or is it a classic case of monopolistic behavior?

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