The Wall Street Journal ran a long piece yesterday on San Jose’s antitrust suit against MLB for blocking the Oakland A’s from moving there, with the upshot being that while it’s still probably a longshot to overturn baseball’s 92-year-old blanket antitrust exemption, it’s not out of the question. And an appeals court could rule on the matter as soon as this summer, setting up a likely Supreme Court showdown soon after.
The really short background on this: Back in 1914, a bunch of businessmen set up a rival to the American and National leagues called the Federal League, which aggressively stole both players and fans from the existing leagues. (The Chicago Whales franchise played in a brand-new ballpark that later became known as Wrigley Field.) The AL and NL owners retaliated, first driving the new league to the brink of financial ruin, then buying out enough owners that the new league collapsed. The owners of the Baltimore Terrapins FL franchise, who hadn’t gotten a cut of the boodle, sued saying that this was a violation of the Sherman Antitrust Act barring monopolistic activities. But the Supreme Court ruled that baseball is exempt from antitrust laws because it’s not an interstate activity, a bizarre warping of logic that has nonetheless been reaffirmed through the years by other Supreme Court rulings.
Baseball’s special antitrust exemption — other sports leagues have limited exemptions, but none that allows full control over franchise movement like MLB’s — has been widely disparaged over the years, but the courts have repeatedly kicked things back to Congress, ruling that if politicians want to clear this up, they should just go an make a new law that explicitly says how antitrust applies to baseball. Congress has rattled this saber on occasion to get MLB’s attention (including for such things as forcing testimony over steroid use), but has never seriously considered revoking baseball’s exemption, largely because everybody powerful is pretty content with the current system, so why rock the boat just for a little matter like legal doctrine that makes a damn bit of sense?
Every time one of these cases comes up, though, there’s always the chance, slim though it may be, that the Supreme Court will actually overturn the 1922 ruling, which is why MLB usually tries to avoid letting things get to the Supreme Court. That hasn’t happened so far here, though, either because MLB is confident that the case will be dismissed (it was once already, by a lower federal court) or because it would rather roll the dice with the courts than figure out how to break open its 150-year-old territorial rights system.
The WSJ cites University of Georgia law professor and baseball antitrust expert Nathaniel Grow as saying if it gets to the Supreme Court, “I’d be surprised if baseball wins”; sports economist Roger Noll, who has testified in past challenges to the antitrust exemption, has similarly told me he thinks this suit may have legs. If so, though, it’s puzzling why MLB seems willing to risk going to the top court on this, rather than hashing out an agreement between the A’s and San Francisco Giants over San Jose, which seemingly could be handled just by an exchange of the right amount of money. (Though finding an amount that both sides could live with might be impossible, especially if A’s owner Lew Wolff is hoping that a court will give him San Jose for free.) We’ll probably need to wait to see what the appeals court says this summer — if San Jose pulls off a hail mary (I know, I know, wrong sport) and wins this round, things could certainly get interesting.