In Defense of Baseball's Antitrust Exemption

56 Pages Posted: 5 Aug 2011 Last revised: 28 Nov 2012

Nathaniel Grow

University of Georgia - Department of Insurance, Legal Studies, Real Estate

Date Written: August 5, 2011

Abstract

This Article challenges the overwhelming scholarly consensus opposing baseball’s historic antitrust exemption on policy grounds by providing the first comprehensive defense of the exemption. The Article does so by advancing two primary arguments: first, it argues that the common criticisms of the baseball exemption are largely without merit. Specifically, given the treatment of the other major professional sports leagues under antitrust law, simply exposing baseball to antitrust liability alone will not yield the benefits that the exemption’s critics believe, and in some cases would actually harm the public interest.

Second, and perhaps more importantly, the Article argues that the existing literature has overlooked significant pro-competitive benefits that result from baseball’s antitrust exemption. Specifically, because baseball is loath to lose its exemption legislatively, Congress has been able to use threats of revocation to help extract a variety of valuable concessions from Major League Baseball (MLB). These concessions provide pro-competitive benefits that would not have been directly obtained through antitrust litigation alone. Perhaps most notably, every single round of league expansion in MLB history has been directly preceded by a Congressional threat to revoke the sport’s antitrust exemption. Therefore, baseball’s antitrust exemption provides Congress with considerable leverage over the sport, ultimately leading to significant, but heretofore overlooked, pro-competitive benefits for the public.

Thus, this Article rejects the existing scholarly consensus, and concludes that baseball’s antitrust exemption ultimately has a net pro-competitive effect.

Keywords: Sports, Law, Baseball, Antitrust, Exemption, Major League Baseball, MLB, minor leagues

JEL Classification: K21, K23, L12, L40, L41, L42, L43, L44, L50, L83

Suggested Citation

Grow, Nathaniel, In Defense of Baseball's Antitrust Exemption (August 5, 2011). American Business Law Journal, Vol. 49, pp. 211-273, 2012. Available at SSRN: https://ssrn.com/abstract=1905748

Nathaniel Grow (Contact Author)

University of Georgia - Department of Insurance, Legal Studies, Real Estate ( email )

Athens, GA 30602-6254
United States

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