America’s favorite pastime

As I’m sitting here watching the A’s about to beat the Tigers (wishful thinking), I realized I don’t know a lot about the business of baseball beyond Moneyball. In some sorts, the idea of baseball the game being a business, an overarching corporation, never really crossed my mind. In fact, I hadn’t heard about baseball’s monopoly exemption until today. Having gone to baseball games all my life, it just makes sense to me to have one Major league. It’s a game, not a big business. Except…it is. And a really really big one that’s been allowed to flourish totally unchallenged at that.

So here’s the deal. Despite U.S. antitrust laws, Major League Baseball has been able to completely monopolize the baseball market (that seems so odd – “the baseball market”) since the American League joined with the National League in 1903. With the success of this alliance, of course, other leagues came about in an attempt to challenge the AL/NL partnership. Most notably, the Federal League, which in 1914 was perceived by fans as another major league, filed a lawsuit against the MLB in 1915 on the grounds that the MLB operated as a monopoly. The case was eventually dismissed, and the Federal League was split up into the AL and the NL. No other case has come close to challenging MLB’s dominance since 1972.

My question is, if baseball can effectively have an exemption from antitrust laws, why can’t other sports have their own exemptions? What makes baseball different from, say, football – another all American sport – which has multiple competing leagues? Granted the National Football League is clearly the dominating force in football, other leagues, like the Arena League or the UFL, do in fact exist. What’s keeping baseball, and the government for that matter, from stepping up to the plate on this?


4 thoughts on “America’s favorite pastime

  1. I think in the early 20th century this would be a very fair argument and there definitely should have been allegations against the MLB for violating anti-trust laws. There was an obvious monopoly forming in almost all pro sport leagues. However, now I do not think there is any point in trying to trying to fix this issue. It just seems like an impossible battle to win. I am completely speaking from a spectator point of view which may be biased. But if the NFL or MLB were to be broken up because of anti-trust violations, what would happen? Most likely history would repeat itself. Either a merger or one league would die off. An exceptional athlete wants to play with other exceptional athletes. So most likely all of the best players of the sport will try to join one league. They will want to play with the other best players of the sport. Which would lead to most spectators like myself to watch the league with the best players. This turns more profit for the league with the best players and the other would most likely be unsuccessful. So may be it is inevitable to not have a monopoly in professional sports. The skill levels seem to seperate into a hierarchy, with each level being a different league.

  2. Taking this conversation to a more microeconomic scale within MLB, how do you feel about the lack of parity in MLB?. Obviously with teams like Tampa Bay, Oakland, and Baltimore having success in recent years, there are signs that small market teams can win. But when one player on the Yankees is making close to half of the entire payroll of some teams, it raises a lot of red flags. The NFL, in many people’s eyes, has become the new American pastimte because any team on Any Given Sunday, can beat any other team. It is not like that in MLB and I think there should be more of a hard cap so that teams can compete with the likes of the Yankees, Dodgers, and sigh…Red Sox.

  3. What Mike said makes a lot of sense. The idea that anybody or any team can be successful is much more reminiscent of the American dream, and right now that is exemplified through football, not baseball. Small market teams like the Oakland Athletics have found success through advanced baseball statistics called sabermetrics, which they use to value and discover hidden gem players that will help a team win baseball games. The NFL teams do not have to use such tactics to fight against wealthy teams, because there are none – everyone is on a level playing field. They are given the same amount of money to produce wins with.

  4. Mike I am going to have to disagree with you on the nature of a hard salary cap in baseball, or any other sport. If we are looking at the MLB, (or NHL, NFL, NBA) as strictly a business which you could argue it is then why would there be a salary cap. If you think about it this is a strange concept within the world of business. if you look at companies like Microsoft and Apple they have no salary cap, and I would argue they have a much bigger advantages over other companies than the top teams in baseball. If anything the only thing a salary cap does is transfers wealth from the players to the owners by pushing down salaries overall.

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