Major League Baseball’s decision to move the All-Star Game out of (suburban) Atlanta as a response to Georgia’s racist voting law generated a response of its own from two of the Senate’s leading shitposting insurrectionists, Ted Cruz and Mike Lee: a threat to draft legislation to revoke baseball’s antitrust exemption.
Cruz, in an effort to show just how much he’s devoted to online clout rather than actual governance or meaningful action, included the hashtag #GowokeGobroke, because, sure, Major League Baseball and its billionaire team owners who use Jackie Robinson’s memory once a year to 42-wash the sport’s lingering institutional racism, yeah, they’re super leftists now because they decided the free market would find it toxic to remain in Georgia.
One way to tell that this threat is more about performative outrage than anything serious is that Cruz knows where his bread is buttered and who he really represents: those billionaire team owners. In the past 10 years, Cruz has gotten $60,600 from Diamondbacks owner Ken Kendrick and his family alone, as found in the OpenSecrets.org database. He’s not really going to do anything that hurts his buddies.
But the threat is out there, and it’s not the first time there’s been talk about ending MLB’s antitrust exemption, which was modified in 1998 by the Curt Flood Act, in which Congress established that baseball players “will have the same rights under the antitrust laws as do other professional athletes, e.g., football and basketball players.”
The thing about the Curt Flood Act is that the existence of a collective bargaining agreement between MLB and the MLB Players Association generally makes it moot.
“For the most part, it does not have a practical meaning today because there’s a union, and an agreement amongst the teams collectively, and the union would otherwise generally be exempt from antitrust law based on what’s known as the non-statutory labor exemption,” said Marc Edelman, a law professor at Baruch College’s Zicklin School of Business. “The only case where this antitrust exemption on the labor side theoretically could come into play would be the rare instance in which the players were to decertify their union.”
Before the Curt Flood Act, and before the MLBPA was formed and bargained with MLB, the antitrust exemption was the key to keeping the reserve clause in place and binding players to their teams in perpetuity. The reason that players still can be traded against their will, as happened to Flood and lead to his challenge of the reserve clause, is that the collective bargaining agreement allows it. The ability for the union to decertify has been seen as a negotiating tactic in basketball and football, but generally doesn’t mean much.
What, then, would be the big deal?
“If you strip away baseball’s antitrust exemption, then the issue of whether all the teams get together to contract minor league teams in a way that, arguably, may have anti-competitive effects in certain markets would be a very ripe antitrust issue,” Edelman said. “I think this is probably — at least at this precise moment for Major League Baseball — the biggest risk that would come from fully eradicating the antitrust exemption, as it would perhaps subject them to far greater liability if they continue minor league contractions.”
The key word there is “continue” minor league contractions, because MLB already got away with paring down the minors, which is what led Bernie Sanders, the polar opposite of Cruz and Lee, to talk in February about ending the antitrust exemption. It’s important to note, though, that Sanders wasn’t just calling for an end to the antitrust exemption, but also to “rescind the huge tax breaks [MLB] has received to build massive baseball stadiums in some of our largest cities.”
Taxes are a much bigger issue than the antitrust issue because getting rid of the antitrust exemption, while it would prevent some collective actions by the league, also would open avenues for team owners to act independently to enrich themselves. As it is, the NFL and NBA don’t have antitrust exemptions, and those leagues do just fine, with owners positioned to do even better — sometimes at the league’s expense.
“Territorial restraints have led to antitrust challenges in other sports leagues before, with different levels of success,” Edelman noted. “Al Davis is the best example, as owner of the Raiders, bringing antitrust suits against the NFL for denial of the right of a team to move.”
Davis not only sued to be able to move the Raiders to Los Angeles, but also when the NFL sought to keep him from bringing the Raiders back to Oakland. The antitrust exemption makes it easier for MLB to block teams from moving, and maintain territories, which accomplishes things like keeping a third team out of the New York metro area. Without the antitrust exemption, it would be a lot easier for Cruz’s donor Kendrick to coax Arizona into building him a new stadium, by adding weight to any threat that without a new facility, he could move the team.
Removing the antitrust exemption also might make it easier for individual teams to strike their own sponsorship deals, as Jerry Jones famously did with Nike and Pepsi to help make the Cowboys an even bigger goldmine. In the 2010 case American Needle v. National Football League, the Supreme Court unanimously found that, as Justice John Paul Stevens wrote in his opinion, “Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned. … The mere fact that the teams operate jointly in some sense does not mean that they are immune.”
Baseball, for now, does have that immunity from antitrust claims, but that doesn’t necessarily mean there wouldn’t be benefits for owners in striking it down. MLB doesn’t really fear the main thing people think of when they think of the antitrust exemption ending: the creation of a new league to compete with them.
It’s not like independent baseball leagues don’t already exist, and if somebody wanted to start a new baseball circuit in the northern Plains after MLB abandoned it by stripping away all the minor league teams, it probably would not trouble anyone at Park Avenue.
“As a practical matter, I’m not sure how much of a difference that would theoretically make, if baseball lost the antitrust exemption,” Edelman said. “It might be a radical idea to try, that if the teams came together, theoretically an attempt to pass a rule that if you play in a rival league, you can’t play in their league, as a way to deter players from going to the rival league. That would be a classic antitrust violation, seen in Radovich v. NFL, where the NFL did not want a rival league. They had implemented a rule that said if you work for the rival league, you can never come back to the NFL, and in that case, back in the 1950s, that was found to be in violation of Section 1 of the Sherman Act.”
MLB could theoretically get away with that now, but why would the league want to deny itself the ability to bring back players from a rival league that, presumably, MLB would want to crush? Such a league doesn’t even exist now, so it’s not really like the antitrust exemption is doing baseball any favors there.
It’s mostly just window dressing, the ability of Congress to remove this special status and do something that most fans would barely notice, if they noticed at all. Legislatively, it’s a way to poke at Major League Baseball, bandying about talk of ending the exemption. The real threat isn’t the one made by Cruz and Lee, but the additional one made by Sanders, to actually hit them in the pocketbook by ending their tax breaks. But strangely enough, that threat wasn’t the one behind the hashtag #GowokeGobroke, because Cruz, as ever, is just putting on a show with no regard for what it means in reality.