MLB Antitrust Law Case Study

To a modern reader, it might seem amazing that the MLB was able to get exemption from anti-trust laws that nearly every other firm in the United States is subject to. To understand how this can be possible, it is important to understand the original court case that allowed Baseball to be exempt from the Sherman Act, as well as the three major court cases that have upheld its ruling over time. In 1913, when the Federal League of Base Ball Clubs came into existence, it challenged the preexisting American League and National League. The Federal League attempted to steal players away from the other two established leagues by removing the reserve clause that bound players to particular teams. The increased competition for players increased player …show more content…
Kuhn was the third major Supreme Court ruling that upheld Baseball’s exemption from the antitrust law. This case consisted of Cardinal’s star outfielder Curt Flood appealing his trade to the Phillies, saying, “After twelve years in the Major Leagues, I do not feel I am a piece of property to be bought and sold irrespective of my wishes” (7). Commissioner Bowie Kuhn upheld the trade, and Flood decided to retire rather than play for the Phillies. The case finally reached the Supreme Court in 1972, where the court ultimately ruled in favor of commissioner Kuhn. This time, the court conceded Baseball’s antitrust exemption is an anomaly since all other professional sports are subject to the antitrust law. Despite this acknowledgement, the court ruled to uphold Baseball exemption, largely due to stare decisis, a respect for the preceding rulings. In each of these instances, Major League Baseball was somehow able to escape the Sherman Antitrust Act that tied down nearly all other …show more content…
A good example of this took place in 2013. At that time, the Oakland Athletics made an attempt relocate to San Jose, despite the fact that the San Francisco Giants already had a minor league team in the same location. Major League Baseball ruled that the Athletics could not relocate to San Jose since it would be within 15 miles of another MLB team, albeit its minor league affiliate. Doing so would mean that the Athletics would be directly competing with the San Francisco Giant’s revenue stream. MLB sees this as bad since it wants team to have separate ticket markets, radio markets and television markets so as to maximize profit by not overlapping on fan bases. San Jose sued Major League Baseball for violation of antitrust laws, but lost thanks to MLB’s exemption from the Sherman Antitrust Act. This is just one of many instances in which MLB used its power as a Monopoly without fear of violating antitrust acts to control market