Almost exactly 100 years ago, Major League Baseball received an exemption from the Sherman Antitrust Act. To this day, it’s the only US sport legally operating as a monopoly. But a minor league lawsuit, and recent pressure from the Department of Justice, could limit MLB’s unique control.

Curt Flood failed in his legal challenge of the MLB antitrust exemption.
On June 19, 1972, Curt Flood failed in his challenge of the MLB antitrust exemption. Flood’s court battle paved the way for free agency, introduced four years later. (Image: Getty)

In December 2021, four former minor league baseball teams filed a lawsuit against MLB and its commissioner. The plaintiffs are among the dozens of MiLB teams cut by MLB the previous year. The lawsuit seeks to challenge the 1922 Supreme Court decision granting MLB its antitrust exemption.

MLB antitrust exemption was always a fluke

This isn’t the first challenge to MLB’s legal exemption, but it could be the most far-reaching, especially given the recent pressure from the US Department of Justice. Last week, the DOJ filed a request with the US District Court in New York, encouraging the court to “define [MLB’s] exemption narrowly.” Should that happen, it could significantly help the teams’ case.

The DOJ’s position isn’t a total surprise. The original Supreme Court decision was a stretch, even at the time. It’s even more of a stretch today, considering that MLB is now a multibillion-dollar business.

In 1922, the Supreme Court granted the exemption because it considered baseball more of a pastime than a business. Even though players traveled across state lines, the Court ruled that baseball wasn’t interstate commerce, because “the players … are not the game.” Ironically, it was a player who provided the first real chink in the MLB antitrust exemption.

In 1969, Curt Flood wrote a letter to then-MLB commissioner Bowie Kuhn. Flood was protesting his pending trade to Philadelphia.

“I do not believe I am a piece of property to be bought and sold irrespective of my wishes.” — Curt Flood

Flood subsequently sued MLB, taking the case all the way to the Supreme Court. Although the Court technically decided against Flood, it recognized the right of free agency through collective bargaining. By 1976, MLB had its first free agents. In 1998, Congress passed the Curt Flood Act, officially carving out MLB players from the antitrust exemption. Unfortunately, the law ignored MiLB players.

MiLB could be the next antitrust shoe to drop

While all sports leagues struggled during the worst of the pandemic, MiLB had the worst of it. It never had a chance. MLB canceled the 2020 MiLB season. But the loss of teams and the 2020 season aren’t MiLB’s only hardships.

The base salary for MLB players has risen 2,500% since 1976. The base for MiLB has risen less than 70% in that time. Meanwhile, inflation has increased by more than 413%.

The Staten Island Yankees sue after losing their MLB affiliation.
The Staten Island Yankees lost their major league affiliation in 2020. (Image: Julienne Schaefer/ NCY & Company)

According to the US Department of Health and Human Services, 86% of MiLB players currently live below the poverty line. Meanwhile, the other 14% aren’t far above it. This lawsuit, with pressure from the DOJ, could help says Harry Marino, Executive Director at Advocates for Minor Leaguers.

“This means the United States government sees no substantive reason why Major League Baseball teams should be permitted to collude and pay minor league players poverty wages, as they have for decades,” Marino said.

Over the years, MLB’s antitrust exemption has been called a “curious and narrow misreading of the antitrust laws,” an “impotent zombie,” and “baseball’s most infamous opinion.” Up until now, however, it has endured. But the clock may be ticking.

Just last year, the US Supreme Court ruled the NCAA couldn’t limit payments to student athletes. The Court saw restricting compensation as a violation of antitrust laws. So, the current Court may be more amenable to the plight of MiLB players. And if not, Congress might eventually step in to patch the MiLB hole left in the Curt Flood Act.

After all, MLB’s 99-day lockout didn’t make many friends on either side of the aisle.

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