baseball antitrust

2
Orioles' run-ins with lawl historic Institution: One of the stranger niiiifdings of sports and poUltcs is baseball's longstanding exemption from federal mi ii i LI-! laws. The Capitol IIIU hearings that recently captivated baseball (ans with their all-star lineup of witnesses had special resunanee In Baltimore On one side of a long table sat the Orioles' newest star iSommy Sosa). potentially the next Oriole ajler Cal Ripken Jr. to be Inducted In the Hall of Fume (Rafael Palmeiro) and an wont trade I he team ever made iCurt Schilling). On the other side sal Rep. Elijah E. Cum- minus of Baltimore, among the Inquisitors on the House Gov- ernment Reform Committee. Another Baltimore connec- tion was more obscure but In- weapon - Its ability to repeal ihe 1922 Supreme Court deci- sion that grunted Major League antitrust laws. lawmakers threatened to do •„, IT baseball (alls to police ster- oid use by players. Congress In- vokes that warning from time to time, whenever baseball does something that offends the vol- Ins public. It's Just Congress •crying wolf.' but the menlton atwuys gets baseball's attention. One of the stranger Intersec- tions of sport and politics, base- ball's waiver from the Sherman Anil-Trust (See Baseball. Zc\ Pivotal cases HW. Federal 8asctiB Out of Baihir-ore vs. National League of Professional BasetxB Cbibs. Baltimcre dub in sriorl-lived Federal League sued after it was only club irable to reach a settlement with established major league. Supreme Court ruled against Banmore, affirming basebal's antitrust exemption. 1S53: Toolson vs. New Viv* ftratces. George Toolson. a mnor leaguer In the Yankees organi:aton, claimed that trie team violated artitrust taws by keeping himr tf.e nvnors. Supreme Court upheld baseball's exemption. 1972: Flood vs. Kuftn. Curt Rood s-ed Major League Basebal and Uie reserve dause. claming it violated wt ngfiti. The Supreme Court ruled against Rood, bul baseball scon ended use of fte cat.se.

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Orioles ties to baseball\'s antitrust exemption

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Page 1: Baseball antitrust

Orioles'run-inswith lawlhistoricInstitution: One of thestranger niiiifdings ofsports and poUltcs isbaseball's longstandingexemption from federalmi i i i L I - ! laws.

The Capitol IIIU hearings thatrecently captivated baseball(ans with their all-star lineup ofwitnesses had special resunaneeIn Baltimore

On one side of a long table satthe Or io les ' newes t stariSommy Sosa). potentially thenext Oriole ajler Cal Ripken Jr.to be Inducted In the Hall ofFume (Rafael Palmeiro) and an

wont trade I he team ever madeiCurt Schilling). On the otherside sal Rep. Elijah E. Cum-minus of Baltimore, among theInquisitors on the House Gov-ernment Reform Committee.

Another Baltimore connec-tion was more obscure but In-

weapon - Its ability to repealihe 1922 Supreme Court deci-sion that grunted Major League

antitrust laws.lawmakers threatened to do

•„, IT baseball (alls to police ster-oid use by players. Congress In-vokes that warning from time totime, whenever baseball doessomething that offends the vol-Ins public. It's Just Congress•crying wolf.' but the menltonatwuys gets baseball's attention.

One of the stranger Intersec-tions of sport and politics, base-ball's waiver from the ShermanAnil-Trust (See Baseball. Zc\

Pivotal casesHW. Federal 8asctiB Out ofBaihir-ore vs. National League ofProfessional BasetxB Cbibs.Baltimcre dub in sriorl-livedFederal League sued after itwas only club irable to reach asettlement with establishedmajor league. Supreme Courtruled against Banmore,affirming basebal's antitrustexemption.1S53: Toolson vs. New Viv*ftratces. George Toolson. amnor leaguer In the Yankeesorgani:aton, claimed that trieteam violated artitrust taws bykeeping him r tf.e nvnors.Supreme Court upheldbaseball's exemption.1972: Flood vs. Kuftn. Curt Roods-ed Major League Basebal andUie reserve dause. claming itviolated wt ngfiti. TheSupreme Court ruled againstRood, bul baseball scon endeduse of fte cat.se.

Page 2: Baseball antitrust

Baseball, politics have a long history[Baseball, from Page lc\

Act of 1890 has long baffled legal

has been described as "Not oneof Oliver Wendell Holmes Jr.'sbeUer days."

Like the Dllty Goat Curst that

(.ween Hill Buckner's legs Li aWorld Series, the exemption haspractically become part of base-ball lore — an oddity token (orgranted but one that no oneseems able to explain.

shaped professional baseball aswe know It And Ihe parallels be-tween the 1922 case at Its origin

are so eerie that the old '•..••light 2fine theme music shouldswell In the background whenthey are discussed.

Peter G. Angeles, owner of the

through the past year that thisregion can't support two probaseball teams He was boxedout by other owners, who de-cided to move the Munlreel

new Washington Nationalsthrow their first pitch tomorrow.

drought, of pro baseball kn Wash-ington.

Some 90 years ago. the ownerof the then •Baltimore Orioles,which had relocated from Mont-real, also resisted when It had toshore this regton with a secondteam. Within a few years, bothBaltimore teams were gone andBaltimore wandered In thedesert without major-leaguebaseball for more than 30 years.In i'jjj-5-i. the St. Louis Brownsmoved to Baltimore to becomethe Orioles, who begin their52nd season tomorrow.

Before the Supreme Court'santitrust decision, baseballteams moved like gypsies in theearly 1600s, the original Balti-more Orioles relocated to NewYork, where they were renamedthe Highlanders and later be-came the Yankees. Baltimoresoon got a new team, againcalled the Orioles. In the minor

competed against major-leagueteams and often beat them

to rival the National and Amerl-

pleased to get a team In the newleague, according U> Robert W.Creamer's rich biography ofBabe Ruth. The city and Itsnewspapers were breathlessabout the arrival of the new

Federal League Baltimore Ter-rapins. The House of Delegatesvoted to make ihclr arrival astate holiday.

knew his team was In troublewhen 1.500 fans showed up to

champion New York Olants.

30,000 that same afternoon.Financially hobbled, Dunn

was forced to unload his stars,Ruth went for a reported $30.000to the Boston Red Sox. wholater couldn't afford him either

Ruth eventually because thatwas how minor league teams

Jor league baseball created Itsown farm system. But Ruth pre-sumably could have played InBaltimore yean longer than hedid. as Dunn was known for

sloned by the lack of support.Dunn moved his depleted squadtemporarily to Richmond. Va.

After two years of battlingwith the established leagues, the

teams except Baltimore reached

llshed major leagues baseballowners sniffed that Baltimorewas only "minor league" anyway- not the last time the citywould suffer .some Insult overthe comings and goings of Itspro sporu teams.

Ned Hankm, owner of the Ter-rapins and before that the Ori-oles, sued. He argued that theother owners colluded to de-stroy his league and his team.

Some think baseball's powersmaneuvered to get the lawsuitheard in federal court in Chi-cago because a federal Judgethere. Kenesaw Mountain Lan-dis, had a keen Interest in base-ball. Named for the Georgia bat-

served the Confederacy. LandLswould later become legendary asthe first commissioner of majorleague baseball. The Judge de-layed a ruling long enough thatthe Federal Base Boll Club ofBaltimore Inc. folded.

But the Court of Appeals InWashington later ruled Hanlon's

S240.000 because antitrust dam-ages are tripled by law

Baseball appealed to the U.S.Supreme Court, which heardthe CUM; on April 19. 1922, Sixweeks later, the court ruled 9-0In favor of the National Leagueof Professional Base Ball Clubs.

The Justices concluded thatbaseball wasn't subject to anti-trust regulation. The law forbidsbusinesses that engage In com-

colluding to harm competitors.The court concluded that base-

weren't commerce and the state

the games.Transport Is a mere incident.

not the essential thing." Holmeswrote In the Justices' decision.The exhibition, although madefor muney. would not be called

words.'The billion-dollar industry

wasn't yet evident — nor wasthe significance ofthe ruling.

The Sun ran the story aboutthe : : - . • : . on Page 20 on May30. 1922. Deep behind front-page

tion of the Lincoln Memorial InWashington and a setback Intalks with Germany over warreparations, the baseball deci-sion seemed inconsequential.

Lcairue and Its Ban more fran-chise had expired years earlier.

The court had opportunitiesto reverse its decision In the1950s and again In the 1970swhen other lawsuits arose, but Itdecreed that the court had itssay and it was up to Congressalone to change the antitrustlaw to Include baseball

The exemption, strange as aknuckkball. remains.

"Nobody has ever fully under-stood the ruling, but It's some-thing no one has been willing to

Ptetrusza, a baseball author andco- editor of the encyclopedia 7b-lal Baseball. "Politicians arenot In the business of potentially-harming national institutions. It

man who destroyed baseball' "Baseball isn't the only bus!

ness so excused. Hundreds ofcompanies are legally allowed tocollude. Including agriculturalco-ops and insurance companiesthat share risk Information to

share television revenue underthe Sports Broadcasting Act of1961, a form of collusion oftencredited with the National tootball League's financial .successIronically. It's an exception thatbaseball could employ butdoesn't.

Many fans are barely aware ofbaseball's exalted status, partlybecause baseball doesn't behave

much differently from the majosports kagues that lack monopoly protection. In n of ihcmsalaries and ticket prices hav

fan loyalty diminishesSome sports historians con

strengthened baseball as thnational pastime, others say 1

lowed the baseball leaguetighter rein on player -,.'..::•••ticket prices and the movemenof franchises, stable franchisebuilt strong following* througl

and cultivated an appeal tliaspanned generations, said MPhilip Lucas, a baseball hlsU>rlan at Cornell College In Io*o.

mure volatile In other sports —fact appreciated in BaltimoreThe city watched Its pro basketball team move to suburba

football team's fleeing In 198and welcomed a new NKL t«arfrom Cleveland, which : / • - • • .the Ravens, In 1996

But bascbitll's exemption haalso helped forUly the Yankeeand an economic structure chaves and have-nots if bascballike football, held less sway ovethe location of Its franchises.third team might long ago havlocated In the greater New Yorarea, diluting that TV markeand the Yankees' ability t<scoop up the lop free agents esery year, said Bruce K. Johnsoron economics professor at Certre College in Kentucky. ThNew York Giants In footbolhaven't been nearly as domlnanas the Yankees in baseball. lx

tune of the New Yurk market.Congress appointed a com

mission lost year to review U.Jonllvrust policy, after state an

Baseball Is expected to be onei wo dozen exemptions the An'.Trust Modernization Comml;slon will examine.

If baseball's free pass on anttrust law ever truly appears irisk, though, the words of th

Emanuel CelJer. who chairedsubcommittee that studied nxnopolles In the 1950s, will ndoubt be recoiled.

•1 have never known. In my 3years of experience, of as threatlobby that descended upon i'1House than the organized bastball lobby." Celler said at thtime. They came upon Was!Ington like locusts.*