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Thursday, April 15, 2021

Baseball’s Antitrust Exemption: Its Practical Effect

While MLB has thus derived some modest benefit from its exemption in the area of relocation, the doctrine’s most significant effect has probably been shielding the minor leagues from antitrust scrutiny. If MLB were subject to antitrust law, then potentially any number of aspects of the minor league system could be challenged under the Sherman Act. While no one knows for sure exactly how such a lawsuit would play out, it seems likely that the repeal of baseball’s antitrust exemption would result in some degree of change to the current minor league structure.

For example, one aspect of the minor league system that would surely be challenged if the exemption were repealed is MLB’s standard minor league pay scale. As has been highlighted in recent years via the on-going minor league wage litigation, MLB teams generally impose a rigid, uniform salary scale on their minor league prospects. Absent baseball’s exemption, this uniform salary scale would almost certainly be declared illegal under antitrust law, as it reflects an agreement between the 30 MLB teams to artificially reduce their employees’ wages that has not been agreed to via collective bargaining (since minor league players are not currently unionized).

Similarly, it is also possible that some of the terms of MLB’s agreement with the minor league teams themselves would be held in violation of the law as well. For instance, but for the antitrust exemption, a lawsuit could theoretically challenge the significant degree of control that parent clubs currently have over their minor league affiliates. Without its antitrust immunity, a court might conclude that the association between major league teams and their minor league affiliates – clubs which are themselves typically individually owned businesses – runs afoul of the Sherman Act. For better or for worse, such a suit could theoretically result in a return to the more independent minor league system of the pre-1930s, in which minor league franchises were much more loosely affiliated with the major leagues than they are today.

RoyalsRetro (AG#1F) Posted: April 15, 2021 at 11:47 PM | 0 comment(s) Login to Bookmark
  Tags: antitrust exemption

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