A League of Its Own

Leagues typically structure themselves in one of two ways: the traditional club model or the single-entity model. ^[i]

In a traditional structure, “the owners of the clubs/teams own the league, with the Commissioner/CEO reporting to a Board comprised of club owners.”^[ii] Generally, in this model, any business decisions, such as franchise relocation or expansion, must be approved by a vote among the league’s member teams. For example, in a 30-team league, each owner or representative must participate in the decision-making process, with each club having one vote.[iii]

The traditional league structure comes with several challenges including instability, local revenue streams, and limited market selections. ^[iv] A potential antitrust issue that could arise from a traditional league structure is when a league “seeking to implement a salary cap might face scrutiny setting the price for player compensation.” ^[v] Another issue with the traditional board of governor’s model is that it “prioritizes the interests of ownership, which can create tensions with other stakeholders such as athletes, fans, and sponsors.” ^[vi] Lastly, when considering the traditional model, there is a limit with market choice as the league will need to cast a vote to determine whether expansion or relocation is suitable for each individual club.

In contrast, the single-entity structure centralizes ownership and control within the league, meaning that all the teams are owned and operated by the league itself. ^[vii] This structure allows the league to independently decide where to expand or relocate franchises without requiring approval from individual team owners.

Additionally, single-entity sports leagues are not subject to Section 1 of the Sherman Act, which prohibits business practices that limit or harm competition. ^[viii] However, single entities cannot unfairly abuse their Section 1 immunity. ^[ix] Players under contract to a single entity could form unions and negotiate with the league to make sure there’s a collective bargaining agreement. In this case, the PWHL already has one. ^[x]

The Mark Walter Group owns all six teams in the PWHL following the single entity model.[xi] This model allows the Mark Walter Group to focus more on securing sponsorships and negotiating media rights.[xii] Since the league was formed in 2023, it remains in the trial-and-error phase, focusing on achieving short-term growth. [xiii] While the PWHL is emphasizing its immediate growth, its single entity model could limit other opportunities for the league’s long-term success. [xiv] The future of the PWHL may depend on whether the ownership can strike a balance between “flexible ownership, financial scalability, and athlete empowerment” to remain competitive with other major sports leagues. [xv]

At this stage, the single entity model is the most practical approach for the PWHL. It protects the league from traditional antitrust challenges, which makes franchise expansion easier and more attractive to the league.[xvi] Moreover, the PWHL’s collective bargaining agreement protects players’ rights, which is essential for retaining talent and attracting new players as the league grows. ^[xvii]

In conclusion, it will be interesting to see how the PWHL’s collective bargaining agreement evolves and whether the league will continue to operate as a single entity.

[i] https://www.akingump.com/en/insights/alerts/structuring-considerations-for-start-up-sports-leagues

[ii] Id.

[iii] Id.

[iv] Id.

[v] Id.

[vi] https://pmc.ncbi.nlm.nih.gov/articles/PMC11259793/#:~:text=It%20also%20enhances%20the%20legitimacy,their%20support%20and%20financial%20contributions.

[vii] https://www.si.com/nfl/2018/01/26/xfl-single-entity-sports-leagues-advantages-drawbacks

[viii] Id.

[ix] Id.

[x] Id.

[xi] https://www.forbes.com/sites/jennnelson/2024/12/24/are-current-ownership-models-in-womens-sports-the-best-path-forward/

[xii] Id.