For a century, Major League Baseball’s golden goose has been its antitrust exemption, a gift from Congress and the Supreme Court that allows it to operate, in essence, as a monopoly.
On May 29, 2022, the exemption will mark its 100th anniversary – though don’t expect MLB to mark such a crucial moment in time with any grand celebrations or fanfare.
No, this has been the league’s hero in the dark, better left unseen and unheard from – at least until politicians periodically find something surrounding MLB with which they disagree and raise non-specific threats to revoke it.
These threats can originate across the political spectrum, be it progressive independent Bernie Sanders taking the league to task for poorly paying minor-leaguers or trimming minor-league franchises, to right-wing Sens. Ted Cruz, Josh Hawley and Mike Lee objecting to MLB revoking its All-Star Game from Atlanta.
A few facts on MLB’s unique exemption, and why it remains a potential political cudgel:
MLB’s antitrust exemption resulted from a 1922 Supreme Court ruling that stated, somewhat incredulously, that the business of Major League Baseball did not constitute “interstate commerce,” thus making it exempt from the Sherman Act, which prevents businesses from conspiring with one another in an effort to thwart competition.
The Supreme Court decision came seven years after the Federal League first filed suit against the major leagues, but the nascent league’s claims of collusion went unheard by the presiding judge, future baseball commissioner Kenesaw Mountain Landis. The Baltimore Terrapins were the only Federal League franchise to press the issue, but an initial victory was overturned and ultimately the Supreme Court ruled against it, with Justice Oliver Wendell Holmes writing that “personal effort, not related to production, is not a subject of commerce.”
Baseball, it determined, was just a game. You wonder if Justice Holmes had any inkling this game would blossom into an $11 billion industry controlled almost entirely by one entity.
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