Although certain laws have protected citizens from various forms of monopolistic practice for decades, the legal decisions surrounding “America’s favorite pastime” have allowed it to be exempt from most forms of government intervention. Over the years, Major League Baseball (MLB) has escaped action that would have ended its exclusive control over contracts and copyright and its all-around Monopoly on professional American baseball. Meanwhile, as contracts and team spending have run into millions of dollars, many have come to see baseball as less of a sport than a business – and a business that should be regulated. The United States is still honored by baseball, but fans, players and owners all hope that government decisions will save it from workers and a host of other diseases. However, the government continues to do little more than allow baseball to remain a special, nationally protected institution.
The professional growth of baseball – and some of its headaches – followed a natural economic progression. Much of the sport’s origins are shrouded in myth, but it is believed to have had its humble beginnings sometime in the nineteenth century. The first organized competition probably took place on June 19, 1846 between two amateur teams: the New York Nine and the Knickerbockers. In 1869, Cincinnati Red Stockings, a professional team, paved the way for other franchises to emerge. In 1871, the National Association of Professional Baseball Players was born. The following days belong to popular memory. Abner Doubleday formed the National League in 1876, and baseball has existed somewhere between games and profitable business ever since.
From the first days, the courts have not been able to see baseball as a threat to business laws. The monumental sherman antitrust act of 1890 (15 USCA § 1 ff.) – a law prohibiting monopolies – prohibits unnecessary restriction of trade between states. In 1920, a Court of Appeal ruled that the fact that baseball operates at an intergovernmental level was part of its non-vulnerable nature as a sport (National League of Professional Baseball Clubs v. Federal Baseball Club of Baltimore, 50 App. DC 165, 269 F. 681). It stated, generally referring to other forms of trade and commerce, that “the Sherman Anti-Trust Act … does not apply unless the effect of the action complained of on interstate trade is direct, not merely indirect or incidental.” Baseball, the court found, did not pose a threat to the economy of the world of sports.
Tea National League The case stems from accusations from the Federal League Baltimore Terrapins. By the beginning of the 20th century, the struggling Federal League had tried to become a focus on the major leagues and had competed with other major league franchises. But national and American leagues bought out many of the federal teams, sometimes playing for player, with offers they could not refuse. Terrapins, one of the last surviving remnants of the Federal League, sued the National League. Representatives of Terrapins claimed that MLB owners had treated Terrapins with scorn and offered them only $ 50,000 in settlement for damages caused by the purchases. In court, Terrapins argued that MLB had broken antitrust law and had participated in the monopolization of businesses.
The case went all the way to the US Supreme Court (National League, 259 US 200, 42 S. Ct. 465, 66 L. Ed. 898 ). In 1922, the court made a classic decision. In a statement written by Justice oliver wendell holmes jr., the Supreme Court declared baseball primarily a sport and not a business. In Holmes’ words, baseball activities were “purely state affairs.” The decision gave baseball the unique status of the only official professional sports organization exempt from antimonopoly laws. In fact, the decision protected baseball as a national treasure.
Tea National League the decision was confirmed in 1953 with Toolson v. New York Yankees, 346U.S. 356, 74 S. Ct. 78, 98 L. Ed. 64. In a brief statement, the court ruled against plaintiff, minor league player George Toolson. Toolson’s arguments were based on the complaint that baseball was a monopoly that offered him unfair contract agreements. The court said that Congress alone had the right to exercise powers that could disrupt the structure of baseball professional organization.
The controversial case in Toolson was a baseball reserve clause. This paragraph stood as the earliest symbol of the sport’s underlying commercial nature. It stated that once a player had accepted a contract to play for a particular team, the player was bound to serve that team for one year and had to enter into a new contract with the same team “for the following season with a salary determined by the parties to such a contract. “It was agreed that if a player broke the reserve clause, the athlete would be guilty of” contract jumping “and not be eligible to serve in any club in the leagues until it was formally reintroduced.
The reserve clause guaranteed players a little more than an income. Players attacked it. In the 1970s, Curtis C. Flood, a midfielder for the St. Louis Cardinals, accused the acting baseball commissioner of Bowie K. Kuhn. The problem was a player Free agency, which Flood had requested and Kuhn had denied. Free agency is the freedom to negotiate a contract with any team, basically a release from the reserve clause. In his case to the Supreme Court, Flood argued that the reserve clause unfairly prevented him from entering into agreements with other teams that would pay him more for his services. The Supreme Court ruled on 19 June 1972 that it had no authority to act (Flom v. Kuhn, 407 U.S. 258, 92 S. Ct. 2099, 32 L. Utg. 2d 728). Only the baseball acting commissioner could appoint the free agency.
Playing dissatisfaction, as a reaction to the decision, set the stage for more free agency bids, and Arbitration between players and owners began in 1973. In January 1976, Andy Messersmith’s success in acquiring a free agency ushered in a new era of high stakes: players could now dictate certain terms of employment, hence the beginning of multi-million dollar contracts.
Money was also in doubt in a case related to another aspect of the game. After more than a century of professional gaming, in 1986, television broadcasts of baseball and copyright the laws around them came into doubt. The players felt that the terms of employment did not include their performances for the TV audience. They insisted that the shipment and profits taken from them be made without their consent. IN Baltimore Orioles vs. Major League Baseball Players Ass’n, 805F.2d 663 (7. Cir. 1986), major league clubs sought a Declaring judgment that they had the exclusive right to broadcast games. The biggest league players claimed that their performances were not copyrighted works because they lacked sufficient artistic merit. The national court refused to cut control of MLB over the airwaves, ruling that the transmitters were in fact copyrighted works and that clubs were entitled to the proceeds from them.
Through these cases, decisions about the finances of baseball have been left to the players and owners. For this reason, baseball has been referred to as a deviation from the nation’s antitrust laws, and its exemption has been called “an aberration limited to baseball” (Flood). The pressure for action from Congress to eliminate this exception reached a height of fever with the baseball players’ strike from 1994-95. The strike left many baseball players, including fans, deprived of their rights. Senator Howard M. Metzenbaum, an Ohio Democrat who chaired the subcommittee on antitrust, led the fight to remove the antitrust exemption from baseball. However, the 234-day strike ended in an agreement between owners and players, in which owners promised to pay “luxury tax” on high-paying clubs. Congress was spared the necessity of action.
However, local communities faced the possibility of losing their MLB franchises when the baseball economy changed dramatically in the late 1990s. Large market teams, many of them now owned by companies instead of wealthy individuals, drove up players’ payrolls. This hurt smaller marketing teams and teams owned by individuals who either lacked resources or the desire to match salaries. The Minnesota Twins, who failed to secure a new, publicly funded baseball stadium, threatened to move to another state in 1997. The state of Minnesota tried unsuccessfully to investigate the team’s finances and MLB, but in the end the twins could not secure a sale or move. by the team.
Failed to halt the rising costs, the baseball league proposed joining two teams before the 2002 season. During the contraction, MLB would buy out the owners and distribute the players to other teams through a draft. The league argued that contraction would strengthen the sport’s financial well-being. However, the owners needed to move quickly if the contraction was to take place before the 2002 season.
It was rumored that the Montreal Expos and Minnesota Twins were the teams selected for the draw. In Minnesota, the operators of the Metrodome, where the Twins play their home games, sued the Twins and MLB and sued a state court to ask the Twins to play the 2002 season. They tried to either win on profit or delay contraction for a year. The referee issued a preliminary injunction, and the twins appealed and argued that they had a duty to pay the rent for the season, but they could choose whether to play the season or not. Minnesota Court of Appeals, i Metropolitan Sports Facilities Commission v. Minnesota Twins Partnership, 638 NW2d 214 (2002), maintained Verdict, which made contraction impossible for the 2002 season. The baseball league later abandoned the concept of contraction, at least in the near future.
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US Congress Subcommittee on Economic and Commercial Law. 1993–94. Baseball exemption from antitrust: hearing before the subcommittee on economic and commercial law. Washington, DC: US Government Printing Office.
Zimbalist, Andrew S. 1992. Baseball and Billions: An Inquiry into the Big Business of Our National Pastime. New York: Basic Books.
Zimbalist, Andrew S. and Bob Costas. 2003. May the best team win: Baseball economics and public policy. Washington, DC: Brookings Institution.
West’s Encyclopedia of American Law, Issue 2. Copyright 2008 The Gale Group, Inc. All Rights Reserved.