Senate Judiciary Committee targets MLB's antitrust exemption

Senate Judiciary Committee targets MLB’s antitrust exemption

The U.S. Senate Judiciary Committee has set its sights on Major League Baseball’s century-old antitrust exemption. 

Bipartisan members of the committee, including chair Dick Durbin, D-Ill., and ranking member Sen. Chuck Grassley, R-Iowa, have sent a letter to the non-profit Advocates for Minor Leaguers requesting further information on the antitrust exemption and its interplay with three developments in baseball: the pay structure for minor leaguers, the MLB-orchestrated reduction in the number of minor league affiliates, and the state of MLB’s international amateur system. The two-page letter, dated Tuesday, is signed by Sens. Richard Blumenthal, D-Conn., and Mike Lee, R-Utah, as well.

“We need to examine how Major League Baseball’s 100-year-old antitrust exemption is affecting the operation of Minor League baseball teams and the ability of Minor League ballplayers to make a decent living,” said Durbin, the U.S. Senate Majority Whip, in a statement. “This bipartisan request for information will help inform the Committee about the impact of this exemption, especially when it comes to Minor League and international prospects. We need to make sure that all professional ballplayers get to play on a fair and level field.”

“This is about ensuring a level playing field for the Minor Leagues and its players,” said Grassley in a statement. “MLB’s special antitrust exemption shouldn’t be imposing labor or contraction problems for Minor League teams and players. Baseball is America’s pastime, and that means more than just the Major Leagues.”

MLB declined comment.

Antitrust laws are meant to prevent businesses from engaging in anti-competitive practices, but MLB has held its exemption since a 1922 Supreme Court decision.

“The Supreme Court has repeatedly acknowledged that was an error and refused to extend the exemption to other professional sports,” Harry Marino, executive director of Advocates for Minor Leaguers, said in a statement. “The Court has left it to Congress, however, to fix the mistake. Today, four senior United States senators — including two from each political party — took a significant step toward doing just that.

“Minor League players are far and away the group most negatively impacted by baseball’s antitrust exemption. MLB owners should not have a special license to underpay their workers. We are confident that Congress will recognize as much through this process and, ultimately, repeal baseball’s antitrust exemption as it relates to issues concerning Minor League players.”

Among the different stakeholders in the sport, major league players might be the least impacted. For one, they are represented by a union, and labor law presides rather than antitrust law when a collective bargaining agreement is in place between management and employees. 

Major league players were also carved out from the antitrust exemption in the 1998 Curt Flood Act, which preserved the antitrust exemption for the rest of MLB’s business, but newly gave power to major league players to bring a challenge on antitrust grounds if they chose. (Notably, to do so would require essentially disbanding the union, likely with the intent of reinstating it later. NFL and NBA players have undertaken this process, but MLB players never have.)

Minor leaguers, however, have no union. 

“So then you have the question about the treatment of minor-league players, and that obviously is something that if there were no exemption, would be challenged,” said Stephen Ross, the executive director of Penn State’s Center for the Study of Sports in Society and a former attorney for the U.S. Department of Justice, in an interview last year. “A guy who today is playing for the Altoona Curve is paid by the Pittsburgh Pirates. What is he paid by the Pirates? He’s paid according to a scale which major-league baseball teams have agreed to. Absent an antitrust exemption, that’s illegal.”

In the minor leagues, players are paid according to a scale set by the 30 major league teams. In effect, those 30 businesses are making an agreement as to what salaries their employees, the minor league players, can make, or not make.

“Even Google and Facebook wouldn’t agree on prices,” Ross said. “If they did, they’d go to jail. … When the 30 owners say we’re going to play 162 games, that is an agreement among the owners. When the owners say the strike zone is measured here, there and the other thing, that is an agreement among the owners. And when the owners say here is the scale for paying minor-league players, that’s an agreement among the owners.”

Baseball’s antitrust exemption affects other areas of the business. Were it to be fully repealed, other legal challenges over how MLB handles matters like merchandise licensing, the movement of franchises and television blackouts could be afoot.

Grassley represents Iowa, where MLB’s territorial rights prevent people from watching games of the Brewers, Cardinals, Cubs, Royals, Twins and White Sox through MLB’s streaming service, MLB.tv. (The only way to legally watch those teams in Iowa would be to subscribe to a distributor, or multiple distributors, with those teams’ respective regional sports networks.)

“I can tell you, the periodic blackouts are a very frustrating experience for a lot of Iowans,” Grassley said in a 2014 statement.

This is not Lee’s first foray into baseball’s antitrust exemption. Last April, he, Sens. Ted Cruz, Marco Rubio, Josh Hawley and Marsha Blackburn, all Republicans, introduced a bill to remove the sport’s antitrust exemption called, “Competition in Professional Baseball Act.” The bill was introduced in response to commissioner Rob Manfred’s decision to move the 2021 MLB All-Star Game from Atlanta, which was a direct reaction to a controversial voting law passed by Republicans in Georgia.

Grassley at the time also ripped MLB’s decision.

In March, on what would be the penultimate day of MLB’s lockout, Durbin tweeted, “Enough.”

“After almost 100 days of the MLB lockout, it’s time to reconsider MLB’s special antitrust exemption, which allows them to act as a lawful monopoly,” Durbin wrote. “Fans across America deserve better. Message to the owners: unlock the lockout and play ball.”

A couple days later, Durbin said he would hold a hearing on the antitrust exemption.

“I think it’s way over time for us to have a hearing in the Senate Judiciary Committee on this issue,” Durbin told the Chicago Sun-Times. “I’m anxious to hear Major League Baseball rationalize their legal status today with this decision of 100 years ago.

“And the net result of that, of course, is that they have power within their companies to do things that other corporations can’t even consider.”

In 2021, Blumenthal proposed a $550 million relief fund for minor league teams impacted by COVID-19. Blumenthal was also outspoken as MLB reorganized the minor leagues, contracting teams.

Passing legislation that ultimately alters baseball’s antitrust exemption has most often been fruitless. When the Republicans introduced the Competition in Professional Baseball Act in 2021, Ross said the legislation has “zero” chance of passing.

“There needs to be a real change in the political culture to want to stop whatever the practices are that would be stopped,” Ross said at the time, “and I don’t see that happening.”

A bipartisan bill presumably would have a better shot of passing. But, in the 1990s, legislation to repeal the exemption was co-sponsored by liberal and conservative senators alike. 

“I challenge you to find any other legislation that was supported by senior, bipartisan senators, and supported by organized labor and consumer groups that lost because people like Sen. Joe Biden, Sen. Ted Kennedy, Sen. Paul Simon and Sen. Diane Feinstein all opposed it because of their connections to major-league owners,” Ross said last year.

Sen. Bernie Sanders in March introduced a bill to remove the entirety of baseball’s antitrust exemption. A bill that more narrowly addresses the exemption as it relates specifically to minor leaguers would be a different test.

(Photo of Sens. Chuck Grassley and Richard Durbin: Tom Williams / Pool via AP)


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