Why does baseball have antitrust exemption

The Federal League was founded in to compete with the more-established American and National Leagues. The new league was dismantled and its owners were compensated. The team refused to join the settlement. It continued to claim that MLB was violating antitrust laws and filed a lawsuit against the league.

In Federal Baseball Club of Baltimore v. It was a state affair. The business of baseball took place within states, not between states. While teams had to travel between states to play each other, this was considered incidental and not a major part of business. It is true that, in order to attain for these exhibitions the great popularity that they have achieved, competitions must be arranged between clubs from different cities and states. But the fact that, in order to give the exhibitions, the Leagues must induce free persons to cross state lines and must arrange and pay for their doing so is not enough to change the character of the business.

Grab for the proximate dollar and never mind about the long-term consequences. For decades baseball teams' front offices were run by good old boys who followed a dubious lore of player evaluation as if it were catechism. The enlightening statistical analyses of the game by innovators like Bill James went ignored until Sandy Alderson in Oakland decided that his team could benefit from James's insights in the mids.

And benefit they did, creating a first-class team on a shoestring budget. Or take the absence of a Major League team in our nation's capital, the eighth largest media market.

Over the years MLB has offered several arguments in defense of its league's presumed antitrust exemption. First, until MLB maintained that the player reserve system was essential to preserve competitive balance in baseball and that the exemption permitted the industry to maintain this labor market restriction.

Yet the reserve system simply affected whether monopoly rents went to the owners or to the players. It did not equalize the distribution of player talent. In fact, with free agency it became more expensive to hold together a winning team and easier for a weak team to turn around its fortunes. Thus, after the reserve system was eliminated, competitive balance in baseball actually improved. While MLB players contracts, free agency and other rights are part of a collectively bargained agreement between the owners and players, non man roster players in MiLB are not part of any union.

Their contract rights are dictated by MLB, something possible because of the antitrust exemption. Without that exemption, such restrictions would be subject to lawsuits on unfair restraint of trade. Without the antitrust exemption, the current structure where MLB owns the contractual rights to players and then sends them to minor league teams would be legally tenuous. It would likely require a new agreement where minor league players agree to such a system and the draft in return for concessions in a collectively bargained agreement.

Such a system very possibly would lead to the kind of reductions in the size of the minors that MiLB is currently fighting to prevent. In , McCain and Sen. Richard Blumenthal D-Connecticut teamed up to propose legislation that would have limited the exemption in response to concerns about pro games being blacked out.

More recently, Rep. Will MLB lose the exemption this time around? The odds seem slim, especially given how this latest effort is tied to a politically divisive topic. But MLB has to play legal defense on each attempt. Even the best fielders sometimes err. All Rights reserved. View All. April 7, pm. Powered by WordPress. Search for:.