“There is no industry like baseball in our country. It has special status as a monopoly, and it is completely unregulated. Right now baseball exploits the hell out of the cities.”
— Andrew Zimbalist, American economist and Robert A. Woods Professor of Economics at Smith College.
“The initial rationale for the baseball exemption was probably not good law in 1921, when the Supreme Court ruled that the antitrust laws did not apply to baseball because baseball was not engaged in interstate commerce.”
— Roger Noll, American economist and emeritus professor of economics at Stanford University.
By Ken Reed
The special treatment MLB receives in the form of its antitrust exemption allows a small group of wealthy owners, who may or may not care about baseball beyond an economic perspective, to control a major cultural practice (indeed one historically called “the national pastime”) as they see fit.
Former MLB commissioner Fay Vincent said baseball should lose its exemption if the owners significantly dilute the commissioner’s traditional powers to act in the best interests of the game. Well, the owners didn’t like that. They decided they wanted a puppet they could control as commissioner. They fired Vincent for acting too independently. As he was shown the door, Vincent said he was just operating in “the best interests of baseball.”
The best interests of the game are not the top priority of baseball owners as long as their government-sanctioned cartel is allowed to continue. For owners of businesses in other industries, neglecting stakeholder groups’ needs, wants and expectations means eventual death – usually sooner rather than later.
2022 is the 100th anniversary of baseball’s antitrust exemption. For the first 50 years, with a few minor exceptions, baseball owners had an ironclad hold on the monopoly status given them via the antitrust exemption. However, 50 years ago there were signs that owners might not be able to keep the exemption forever.
In 1972, the Supreme Court took on the Curt Flood case (Flood v. Kuhn). In Flood, the Court stated what was obvious to so many legal and business observers, specifically that “professional baseball is a business, and it is engaged in interstate commerce.” Nevertheless, the Court ultimately upheld baseball’s antitrust exemption.
Ironically, it is a recent college athletics case that might be the impetus for eliminating MLB’s antitrust exemption. In NCAA v. Alston, the Supreme Court reached a 9-0 decision to uphold a ruling by the U.S. Court of Appeals for the Ninth Circuit that struck down NCAA caps on student-athlete academic benefits on antitrust grounds.
In Alston, Justice Neil Gorsuch, writing for the Court, addressed MLB’s exemption. He called it “unrealistic, inconsistent, and aberrational.” In his opinion, Gorsuch suggested that legislators address the problem with MLB’s antitrust exemption. But he also hinted that the Court could decide to abolish the Court’s MLB antitrust exemption if legislators continue to pass on the issue.
Eventually, the 100-year-old mistake that is baseball’s antitrust exemption will be fixed, either by Congress or the Supreme Court.
After watching how the owners operated in the recent lockout, the fix can’t come soon enough.
— Ken Reed, Sports Policy Director, League of Fans
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