From: prb@chinet.chi.il.us (Paul Botts)
Subject: Re: Anti-Trust and Baseball
Organization: Chinet - Public Access UNIX
Date: Sat, 12 Dec 1992 16:00:12 GMT

In article <1992Dec11.211808.29262@data-io.com> dietz@parody.Data-IO.COM (Kent Dietz) writes:
>In the last year or so, I have been seeing/hearing/reading a lot of 
>threats thrown at Major League Baseball, mostly having to do with 
>the Anti-Trust exemption.  When the Nintendo group made the offer for
>the Mariners, the local politicians did a great deal of chest thumping
>about sueing MLB if the offer was not accepted.  Whether that did any
>good is probably a moot point.  However, I have been wondering what 
>benefit does MLB garner from having the "anti-trust exemption"?  I 
>think that Fay-boy Vincent stated in front of Congress (yesterday?) 
>that he felt the exemption was not of any value anymore.  

He's half-right. The courts have found that even without an
anti-trust exemption, sports leagues can collectively bargain with their
employees such obviously monopolisticthings as reserve clauses, salary
caps, and etc. The NFL was on the verge of finding out what life would
be like if the teams really had to compete in a truly open market, but
apparently the owners and the players are reaching a settlement now,
which the federal judge in Minneapolis will no doubt approve so long as
both sides agree.


>
>Does anyone have ideas on what would be different if MLB lost this 
>exemption?  The NFL and NBA do not have this exemption.  Does this 
>mean they operate at a disadvantage to MLB? 
>
>Tampa Bay officials said they would challenge the exemption in court.  Will
>this get them a team?  Even if they win?  
>
>My suspicion is that the exemption is really a red herring to confuse 
>the issue of how MLB franchises should be treated.  I have a feeling
>that if the exemption was removed, nothing Earth shattering would happen.
>Opinions?
>

Well, the first thing that would be illegal would be the leagues being
able to stop frnachises from moving, such as the Giants. Al Davis sued
the NFL on the grounds that his competitors (the other owners) had no
right to vote to stop him from moving the Raiders from Oakland to L.A.
The courts agreed, and now NFL (and presumably NBA and NHL) franchises
can move wherever they like, no matter what the other owners think. It
would be interesting to see what the ruling would be if, say, the
Hartford Whalers move to Milwaukee, CHicago owner Bill Wirtz demands a
million-dollar "territorial infringement" fee (as he has been
threatening), and the Whaler ownership says, "See you in court."
Precedent would seem to be on the Whalers' side.

That is what the Tampa Bay folks are talking about, and also what the
Seattle folks were talking about in the early 1970s: in that case they
were angry at MLB for *not* using this power to stop the Pilots from
leaving. Bud Selig was talking at the COngressional hearing the other
day about how the exemption is essential to keep order, and keep
franchises from just running around blackmailing cities. Of course, the
Florida senators did not agree (!), and besides, the record is very
mixed: for example, the AL owners let it be clearly known that they
wouldn't stop Jerry Reinsdorf from moving the White Sox, which helped
him blackmail the state of Illinois into a new stadium and the most
one-sided lease in the sport. The owners use this power very
selectively.

Of course, Congress could easily take care of that problem at the same
time it did away with the exemption: simply add a new law that no
public funds can be used to build sports stadiums. Or perhaps, cannot be
used to pay for more than half the cost of a sports stadium. Or, cannot
be used to pay for a sports stadium unless more than one franchise will
use it. Whatever, that would do away with the blackmail or severely
restrict its usefulness, while also stopping the owners' feeding at the
public trough for their profits.

I dunno if Congress would ever do that, and without it the owners have a
point, at least in theory: teams likely would do more running around. Of
course, the record in the other sports without the exemption is not too
bad, there haven't been just a dizzying flurry NFL and NBA and NHL
franchises switching cities in recent decades.

Whether loss of the exemption would do away with monopolistic practices
like the reserve clause and the draft and whatnot is unclear; most
likely the players union and the owners would reach some sort of middle
ground as the NBA players union and owners did. It would strengthen the
players' hand, though.

Loss of the exemption would likely make the prospect of starting a new
major league more appealing (something I strongly hope happens soon,
these bozos desperately need some competition). When the USFL sued the
NFL on the grounds that the NFL had acted as an illegal monopoly with
regard to the national TV contracts, the jury found that this was indeed
true, and found in favor of the USFL. Then the jury had to decide on
damages, based on to what extent the NFL's practices had damaged the
USFL over and above the USFL's own incompetence, and on that basis they
awarded the USFL exactly one (1) dollar. (This was a very wise jury, I
think, based on watching the USFL's follies and foibles).
Of course, the owners would do damn near anything to prevent a new
league from being started, and without the exemption they would be wide
open to the kind of accusation the USFL levelled (because they *would*
of course try to prevent the networks from dealing with the new league,
as the NFL did - they just wouldn't be able to help themselves, I'm
sure).

Personally, I am rooting for the exemption to be eliminated, partly on
philosophical grounds (a for-profit business should not get extra
privileges to act in monopolistic ways, that its competition - in this
case other places people spend their entertainment dollars - does not
get), and partly on practical grounds as a fan: watching the clowns in
charge of MLB makes me really wish they had some competition and some
more free-market forces working on their sorry asses. And if we really
think the players' salaries and the owners' profits are obscene, we
should STOP SUBSIDIZING THEM WITH OUR TAX DOLLARS - which means no more
publicly funded profit machines like new COmiskey Park, and no more tax
writeoff for businesses to buy season tix and skyboxes. Keep in mind,
the next time you watch the rich yuppies cavorting in those brand-new
skyboxes at your favorite stadium, that *you* helped pay for it with
your federal tax dollars. And that in turn is a big part of the reason
Danny Jackson will make $4 million this season for his usual 7-10
record.
That may seem a bit off the thread, but its not: the exemption is legal
and philosophical underpinning for much of this.
Newsgroups: rec.sport.baseball