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Staten Island Yankees and Three Others suing MLB, Manfred



By Tamar Chalker

December 21, 2021

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While I was in the process of researching a fun post about a random, independent minor league team that’s been extinct for almost a century, news broke that four former minor league teams have filed a lawsuit against MLB and Rob Manfred as Commissioner. I had actually already talked myself out of two other legal-based posts (one including Curt Flood because everything ties together today) when this came down, so apparently, I was destined to write about the intersection of baseball and some of the drier parts of law today.

When MLB decided to realign the minor leagues, they shrunk the system from 14 leagues to 11, along with dozens of teams losing their affiliations with MLB. While this led to higher minor league salaries, which is absolutely a good thing, I personally think that it chips away at one of the ways in which baseball stays uniquely accessible to people in every corner of the country.

The Staten Island Yankees, the Tri-City Valley Cats, the Salem-Keizer Volcanoes, and the Norwich Sea Unicorns are the Plaintiffs in the new lawsuit. All four teams were Short-Season A clubs, with the Volcanoes part of the Northwest League and the other teams part of the NY-Penn League. Staten Island folded, which is a real shame. Particularly during my time covering the minors for IIATMS, Staten Island was a great organization to work with and I wish I’d had the opportunity to take more advantage of what they offered.



Meanwhile, Tri-City has joined the independent Frontier League, while Norwich (along with my “local” team, the Vermont Lake Monsters) joined the Futures Collegiate Baseball League. Salem-Keizer went a step further and created their own independent league, the Mavericks Independent League. There are four teams made up of “top level non-drafted and released players who hope to someday reach the Major Leagues.” One of the teams, of course, is the Portland Mavericks, which reminds me – if you haven’t watched the documentary about the Mavericks, “The Battered Bastards of Baseball”, I highly suggest it.

Baseball is a unique sport in many ways. The extensive minor league system has made it more accessible to people who don’t live anywhere close to a big league stadium or perhaps can’t shell out the money for the exorbitant ticket prices at places like Yankee Stadium and Fenway. Baseball also has a pretty unique situation legally, as it is the only one of the four major North American sports leagues that holds a broad antitrust exemption. And when you come to read your sportsball news, who doesn’t want to hear about antitrust exemptions and interstate commerce?

Baseball’s antitrust exemption rests on a 1922 unanimous Supreme Court ruling by Oliver Wendall Holmes. In Federal Baseball Club v. National League, 259 U.S. 200 (1922), a Baltimore-based club from the defunct Federal League had previously won an antitrust claim against the National League and American Leagues, who had appealed. The Federal League claim was that “the defendants destroyed the Federal League by buying up some of the constituent clubs and in one way or another inducing all those clubs except the plaintiff to leave their League.” This would appear to violate the 1890 Sherman Antitrust Act, which prohibits activities restricting interstate commerce and competition in the marketplace.



On its face, the Federal League’s argument seems pretty on point, however, the Court carved out an antitrust exemption for baseball that I would argue may have made sense in 1922, but seems laughable in today’s world. The Court concluded that baseball was not considered “interstate commerce.” Justice Holmes wrote, “The business is giving exhibitions of baseball, which are purely state affairs. It is true that, in order to attain for these exhibitions the great popularity that they have achieved, competitions must be arranged between clubs from different cities and states. But the fact that, in order to give the exhibitions, the Leagues must induce free persons to cross state lines and must arrange and pay for their doing so is not enough to change the character of the business.”

In 1922, I suppose Justice Holmes had a point, but when you think about the ways in which the business of baseball has changed in the last 100 years, one could argue that the character of the business has changed enough to be considered interstate commerce. The advent of national radio and television stations, never mind MLBtv, along with licensed merchandise, are just a few of the ways in which MLB generates revenue outside of a “purely state” based exhibition baseball game.

There have been a few challenges to this exemption over the years. Most notably, of course, came when Curt Flood challenged the reserve system. In Flood v. Kuhn, 407 U.S. 258 (1972), Justice Blackmun made it evident that the Court was unwilling to turn their back on their prior ruling, stating “If this ruling is unrealistic, inconsistent, or illogical, it is sufficient to answer, aside from the distinctions between the businesses, that, were we considering the question of baseball for the first time upon a clean slate, we would have no doubts. But Federal Baseball held the business of baseball outside the scope of the Act. No other business claiming the coverage of those cases has such an adjudication.”

The last time the antitrust exemption was challenged was in 2012, when a group of baseball fans sued MLB, Comcast, and DirectTV, regarding the system baseball has in place regarding television rights and how much more people must pay to view out of market games. This case was settled.



So, what are the chances these teams win, given the powerhouse they are going up against in the MLB and their (at least so far) untouchable antitrust exemption? Well, I wouldn’t put my money on the minor league teams’ success, but I wouldn’t necessarily bet against them either. The NCAA was long seen as untouchable, but just this year the Supreme Court unanimously held that the NCAA violated antitrust law in NCAA v. Alston.

Justice Gorsuch touched on the unique position of baseball in the NCAA v. Alston decision. “To be sure, this Court once dallied with something that looks a bit like an antitrust exemption for professional baseball. In Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922), the Court reasoned that ‘exhibitions’ of ‘base ball’ did not implicate the Sherman Act because they did not involve interstate trade or commerce—even though teams regularly crossed state lines (as they do today) to make money and enhance their commercial success. Id., at 208–209. But this Court has refused to extend Federal Baseball’s reasoning to other sports leagues—and has even acknowledged criticisms of the decision as ‘unrealistic’ and ‘inconsistent’ and ‘aberration[al].’ Flood v. Kuhn, 407 U.S. 258, 282 (1972) (quoting Radovich v. National Football League, 352 U.S. 445, 452 (1957)).” This doesn’t really tip the Court’s hand as to how they would decide if another baseball antitrust case came to them, but there probably hasn’t been a better time for these teams to see if they can try to put a crack in baseball’s long-standing exemption.

#AntiTrust #MinorLeagues

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