MLB anti-trust exemption under fire again

MLB’s anti-trust exemption may be coming under fire again…this time from the one body with the power to actually change it.

Three Republican Senators outlined proposed legislation Tuesday designed to end the sport’s unique anti-trust exemption. Their announcement came soon after MLB Network’s John Heyman tweeted that the sport expected such an action.

Senators threaten to rescind MLB antitrust exemption

The lawmakers, Sens. Ted Cruz of Texas, Josh Hawley of Missouri, and Mike Lee of Utah, described their proposal as a reaction to the sport’s recent decision to relocate the All-Star Game from Atlanta to Denver in response to Georgia’s enactment of stricter voter laws.

The state’s action has drawn criticism from many activists and businesses who called it an effort at voter suppression with a particular eye toward minority voters. The three senators Tuesday expressed frustration with corporations, MLB among them, that are increasingly adopting what are seen as progressive causes.

“This past month we have seen the rise of the woke corporation,” Cruz said. “We have seen the rise of big business invoking a woke standard.”

He said MLB’s decision to join the protest effort “underscores that there’s no reason Major League Baseball should get special subsidies.”

It is viewed as unlikely that Republicans can muster sufficient legislative support to end the anti-trust exemption. They lack majorities in either house of Congress.

The United States Supreme Court created the sport’s anti-trust exemption in a 1922 ruling, Federal Baseball Club of Baltimore vs. National League. Twice since then, in Toolson vs. New York Yankees (1953) and Flood vs. Kuhn (1970), the Court ruled that removal of the exemption would have to come by a Congressional change of the anti-trust laws rather than through judicial directive.

In 1998 Congress amended the anti-trust exemption by passing what was known as the Curt Flood Act. But that act only constrained the sport’s relationship with players; it left the exemption in place for all other aspects.

That legislation said in part, “this section does not create, permit or imply a cause of action by which to challenge under the anti-trust laws, or otherwise apply the anti-trust laws to, any conduct, acts, practices or agreements that do not directly relate to or affect employment of major league baseball players to play baseball at the major league level.”

Thus, MLB retains its anti-trust exemption with respect to such potentially controversial areas as its support of minor league teams, relocation of franchises, and broadcast rights.

Baseball is the only sport protected under the exemption.

Elimination of the exemption has been discussed several times since 1998, most recently in 2020 after the sport announced significant revisions to its relationship with the minor leagues. Nothing, however, came of it.

In a 2019 Wake Forest Law Review article, Jaclyn Malmed argued that the exemption ought to be eliminated entirely. She argued, among other things, that MLB has used the exemption to create anti-competitive and thus unfair TV contracts.