MLB Faces Antitrust Scurtiny, but Little Chance of Change

Baseball Faces Antitrust Scrutiny, but Little Chance of Change

Claims of losses challenged; Selig to appear before House Judiciary Committee

Washington, December 6, 2001 -- Is major league baseball’s antitrust exemption about to come tumbling down? According to multiple reports, Congress will hold hearings related to the issues of relocation, contraction, and revenue sharing. The general consensus is that nothing will result from these hearings, but that does not stop the flurry of opinions that have followed.

According to a report in the New York Times, Major League Baseball Commissioner Bud Selig will testify before the House Judiciary Committee and will "claim that [MLB] lost more than a half billion dollars last year." A USA Today report notes that Selig will tell the committee that MLB has lost a combined $1.38 billion from 1995-2001. Selig reportedly "will reveal financial data never before made public," including local TV and radio income for each team in 2001.

The Times report notes that U.S. Rep. John Conyers (D-MI), the ranking Democrat of the House Judiciary Committee who asked Selig to appear, said the report "was inadequate because it lacked specifics on stadium debt, salaries and fees paid to owners, and ‘related-party transactions’ (the movement of money between divisions of companies that own teams)." A New York Daily News report notes that 30 MLB teams had a combined operating loss of $232 million last season and total losses of over $500 million.

On the minds of many is baseball’s antitrust exemption. The Milwaukee Journal Sentinel notes that "lawmakers acknowledge that there is little chance of legislation being enacted this year, with other priorities facing Congress before the end of its current session."

A Bloomberg News report quotes Chicago-Kent College of Law professor Eldon Ham as saying: "It's laughable to say that a multibillion dollar enterprise that's a television juggernaut and has stadium deals and millionaire players all over the place isn't interstate commerce. To be kind, it's a legal absurdity." A report by the Washington Times notes that "The 79-year-old exemption, which allows the game to expand, move or fold franchises as it wishes, has survived 44 formal attempts at outright appeal or significant amendment since 1989, as well as hundred more in preceding decades."

Whether or not any of these sentiments persuade Congress to take action, it is clear that baseball is changing—especially to the tens of thousands of fans who root root root for the Minnesota Twins and Montreal Expos.

Sources:

USA Today, 12/6, Associated Press, 12/6,
N.Y. Daily News, 12/6,
Milwaukee Journal-Sentinel, 12/5,.
St. Paul Pioneer Press, 12/6,
Bloomberg News, 12/5,
Washington Times, 12/6,
Philadelphia Daily News, 12/6

Matthew Roberts