Baseball's Antitrust Exemption

Abstract This chapter explores Major League Baseball (MLB)'s antitrust exemption and its current relevance, starting by presenting a brief overview of the antitrust laws in the United States. Next, MLB's anomalous antitrust exemption and its vulnerability to Congressional action are explained, and it is argued that the antitrust exemption is largely irrelevant today. The anticompetitive pooling of broadcast rights is covered by the Sports Broadcasting Act, which shields such pooling from the antitrust laws. The exemption had an enormous financial impact for over fifty years as it protected and preserved MLB's monopsonistic reserve system, which meant that the club owners obtained nearly the entire surplus generated by the business of baseball. The agreements on other labor issues, namely player drafts, age restrictions, and roster size, are considered. There is still an extremely good reason for MLB to jealously guard its antitrust exemption.