Major League Baseball’s antitrust exemption faces arguably its biggest legal challenge in decades. But despite the relative strength of a case that could be before the Supreme Court in a matter of months, the lawsuit could also soon fall by the wayside if the league opens its wallet wide enough.
Although virtually any case appealed to the nation’s highest court is a long shot, experts say a lawsuit sparked by the exclusion of 40 teams from MLB’s minor league system has a better chance of attracting attention of the court – at least compared to previous attacks on baseball’s infamous exemption rule.
“It’s the biggest challenge since there were several cases in the ’90s,” said Stephen Ross, executive director of Penn State University’s Center for the Study of Sports in Society and a longtime critic of baseball’s privileged legal status.
That strength, he said, was due in part to the case itself and the judges who would hear it. The Supreme Court’s unanimous decision two years ago in an antitrust case that paved the way for NCAA athletes to make money off their name and likeness “changed everything,” Georgetown law professor Brad Snyder said.
Since 1922, MLB and its teams have enjoyed protection from antitrust scrutiny that most companies do not, thanks to an unusual Supreme Court decision this year. Although the scope of the exemption has changed over time, it still allows MLB to engage in monopolistic practices that might be considered illegal in other industries.
The plaintiffs in this case are two of the MLB-distributed teams: the Norwich Sea Unicorns of Connecticut and the Tri-City ValleyCats, based near Albany, NY. They argue that in an environment where typical antitrust laws apply, the 30 major league teams would have to compete with each other for the number of minor league teams they work with. This is in contrast to what happened before the 2021 season, when MLB clubs collectively reduced the number of affiliated farm teams in their ranks from 160 to 120.
“A lot of people ask me, ‘Well, who cares if baseball has an antitrust exemption?'” said Snyder, who, like Ross, recently joined one of several briefs asking the Supreme Court to take up the case. “These are small businesses and they are being abused. … The shrinking of minor league affiliates without any free market competition that allows these teams to compete on price – simply expelling them from affiliated minor leagues – truly illustrates the evils of a monopoly.”
But the case could disappear before the Supreme Court decides whether to hear it.
The two minor league teams have a separate but related legal battle against MLB in New York state court that is coming to a head. Settlement discussions before a judge are scheduled for Tuesday, just two weeks before the trial is scheduled to begin on November 13th.
As part of those negotiations, MLB could tell minor league owners that both cases must be resolved simultaneously.
“It wouldn’t surprise me if they did that,” said Jim Quinn, an attorney for the minor league teams. “But they would have to pay a lot of money for that.”
Quinn said the concurrent lawsuits are designed to put as much pressure on MLB as possible, a leverage play. MLB declined to comment.
All in all, Norwich and Tri-City ownership appear to be on the precipice of a major decision in the coming weeks: settle or let the Supreme Court case play out and risk guaranteed money on legal history, baseball history, etc. to pursue even a greater good.
The sound of calming
Tri-City Club owner Doug Gladstone knows he’s involved in a fight that goes far beyond his own business.
“When we started, it was about our team because we felt like we were being treated unfairly,” Gladstone said. “With the antitrust issue, things have obviously gotten worse. I feel like it definitely has some influence on the decision making for us, the bigger picture.
“There are a lot of people who support this. I think there are a lot of people who wish that could change.”
But the plaintiffs aren’t promising they’ll take the antitrust litigation as far as they can.
“We are always open to an agreement,” Quinn said.
E. Miles Prentice III, the owner of Norwich, did not respond to an interview request.
Many have tried and failed to overturn baseball’s famous defense, widely held among legal scholars. That makes the possibility of settling a larger-than-normal baseball antitrust lawsuit a disappointment for exemption opponents like Snyder, who acknowledged it would be a disappointing outcome for him.
Among the friend-of-the-court briefs filed with the Supreme Court last week, perhaps the most impactful came from 18 attorneys general across the country. In pleading with the court to take the case, they argued that the states themselves had no recourse when MLB cut 40 teams.
“States are barred from exercising their historic police powers and enforcing their own antitrust laws by a century-old, judge-issued federal exception…” the brief reads.
Ironically, the public good arguments presented in the Friends of the Court briefs may ultimately benefit only the two plaintiffs.
Quinn, 78, is a well-known name in sports circles for his work helping NBA and NFL players win free agency. Despite his resume, the baseball exemption represents something of a white whale.
“I think I already have a legacy,” Quinn said. “But I said to someone recently, I’d like to be able to put on my gravestone, ‘We repealed the baseball exemption.’ … That would certainly be a nice ending.”
Nevertheless, Quinn and his clients are ultimately under no obligation to delay a settlement for perceived greater benefits.
“Customers, not Jim Quinn — customers — can choose to forego their short-term economic interests to serve a broader purpose,” Ross said. “If these people want to take a lot of money to leave, that’s completely their right and their prerogative.”
Never tell me the odds
Experts see some differences between this volley on the baseball exemption and previous attempts, including the current court’s willingness to overturn precedent. The Supreme Court has previously stated that Congress should make any subsequent changes to the exemption. But today’s judges may think differently.
This court’s ruling on college sports in NCAA v. Alston” also suggests to lawyers like Snyder that the baseball exception could be in the court’s sights. Over time, some sitting justices have also publicly criticized the baseball exception in various comments.
But if the current baseball case is settled — or the Supreme Court declines to hear it — those hoping to see the exemption lifted fear it will be some time before another worthy opportunity arises.
“Unless the government is willing to actually get involved, you can only file a lawsuit if a wealthy private party is also affected by monopoly power,” Ross said. “The problem with having the wealthy private party involved is that they are not the most attractive party to present the case.”
Snyder always told his law students that minor league players were prime candidates for antitrust litigation. That changed last year when lower-level managers unionized, meaning they would be subject to labor law rather than antitrust law. (Members of the major leagues, meanwhile, are ineligible for two reasons: They, too, have a union, and Congress changed the exemption in 1998 so that it could never apply to their ranks.)
Attorney Garrett Broshuis sees no clear successor for the current case. He has successfully fought the MLB in court, reaching a $185 million settlement last year for minor league players in a wage violation lawsuit. But he also knows the danger of an antitrust dispute with the league: He once filed a lawsuit on behalf of Boy Scouts against the exemption, which the Supreme Court rejected.
“When will there be another opportunity like this?” Broshuis asked. “There have been cases of franchise relocations that did not come to fruition. I had my Scout case from a few years ago. This was a good candidate, but he didn’t have as broad support as a case like this.
“There can be business interests behind a case like this. You can get Republicans to do it because it’s also non-partisan. What other kind of initiative will receive this kind of widespread support? It’s hard to imagine another opportunity like this. So if it doesn’t happen now, when will it happen?”
But even when difficult cases arise, MLB relies on its deep financial resources to resolve them.
The current antitrust lawsuit originally counted four teams as plaintiffs. Half of them, the Staten Island Yankees of New York and the Salem-Keizer Volcanoes of Oregon, have already reached an agreement with the league.
Snyder pointed to an earlier example. In the 1940s, New York Giants outfielder Danny Gardella briefly joined a team in Mexico, where players were lured with high salaries. When Gardella was suspended, he sued the league before settling the case for $60,000.
“I felt like I was getting paid, but since I was a poor man, I felt more or less justified,” Gardella said, according to the Society for American Baseball Research. “It wasn’t like I had a lot of money and was getting paid.”
Then-Commissioner Happy Chandler admitted afterward that “the lawyers thought we couldn’t win.”
“The reason we are in this crazy situation where Major League Baseball has a legal monopoly is because MLB was smart enough to come to terms with Danny Gardella after he was blacklisted by the Mexican League was set,” Snyder said. “If you invest in a minor league team and Major League Baseball comes to you and says, ‘Hey, we’re going to talk to you about an amount of monopoly.’
(Top photo from a Kane County Cougars game. The team was among the minor league organizations that lost its major league affiliation: Brendan Kennedy/Toronto Star via Getty Images)