I have enjoyed the debate, and SL has raised great points. But I have a real question about the above...
Why is it that a small group of like minded businessmen working together to control access and limit membership, as well as the rules governing membership, in a small market place not collusion?
I await the usual insightful explanation. 
The key word that you touch on is "small market place". That's the point about market definitions. If the NBA is viewed solely as being in the market of professional basketball, which is distinct from the larger sports and/or entertainment markets, then it is in fact collusion, because they're working together to control almost the entire market. However, the argument is that they are working together to brand their product in the larger entertainment market, and doing so helps them remain competitive.
They've started a joint venture, the NBA, which shares some administration costs, marketing costs, negotiates national broadcast contracts, engages in some revenue sharing because the individual health of each company is important to the collective body, etc. Because their fortunes are intertwined, they have agreed to give each other real control about who can be part of the group. Joint ventures happen all the time. Sometimes they're between two relatively non-competitive companies who've found a synergy between their products which they want to capitalize on, but they are also sometimes found between competitors. Automakers have shared manufacturing plants. Two wireless companies in Alaska formed a new company to collective share their resources, but continue offering wireless service.
The question is always "how competitive is the market?" and to answer that it just comes t back to that same question of what is the market. You can answer this yourself in a thought experiment. If you're watching a lopsided basketball game, especially if it's not a Celtics game, do you:
a) keep watching regardless?
b) search for another NBA basketball game?
c) search for another sporting event?
d) watch a TV show or movie?
e) stream something on Netflix?
f) turn off the TV
If you answered a or b, that indicates that you don't substitute from basketball much. If everyone who watches the NBA is like you, then yes, the NBA's proper market is probably just professional basketball. However, if you, or most people, would answer c, d, or e, then the NBA is probably in a larger entertainment market. (If you answered f, then we could argue that you're exiting the market, but we'd want to delve further into what you chose to do instead).
You could do a similar thought experiment with going to an actual game, but that can be more difficult to determine because now you've got those local brand loyalties built in. Still, ask yourself where you spend your money on leisure activities. Specifically -- if you were given $100 to spend on a leisure activity, the time and date of your activity was completely up to you, and you were to consider an NBA game as an option, what else would you consider:
a) Nothing other than the NBA
b) Another sporting event
c) A live musical/theatre/dance performance
d) Eating/drinking
e) Clubbing
f) A athletic activity (golfing, skiing, kayaking, climbing, etc.)
g) IMAX movies (multiple, I guess, since we're giving you $100)
h) something else
If you answered a, then again, the product market is pro basketball, and the NBA has control of that market. But if you would consider b through h, and other people who are interested in the NBA would also consider something else, then the proper product market is something larger.
That the NBA controls pro basketball is not disputed. What is at issue is whether pro basketball is a distinct market separate from other entertainment options. I would argue it's not, and that is why the NBA is allowed to exist, to help their product compete in the larger marketplace. The good news is that thanks to Nielsen, we have third-party data about what people do when watching TV, so the first hypothetical question I posed can be answered by more than mere conjecture. Certainly the NBA has done enough market research to answer the second as well. Considering how much has gone into developing luxury boxes, adding restaurants into arenas, and improving the "fan experience", my guess is that research told them that the fans don't come for the basketball alone. Maybe some of them do, but not all of them.
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