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In Defense of Baseball’s antitrust Exemption

Nathaniel Grow, Forthcoming American Business Law Journal

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Readers vote is closed since March 1st, 2012. Readers’ vote has nominated 2 articles for each of the Awards. This short list has been communicated to the Board, with the articles nominated by the Steering Committees. The Board will decide on the award-winning articles on March 27, at the Awards ceremony to take place in DC. See vote results online here.

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This Article challenges the overwhelming scholarly consensus opposing baseball’s historic antitrust exemption on policy grounds by providing the first comprehensive defense of the exemption. The Article does so by advancing two primary arguments: first, it argues that the common criticisms of the baseball exemption are largely without merit. Specifically, given the treatment of the other major professional sports leagues under antitrust law, simply exposing baseball to antitrust liability alone will not yield the benefits that the exemption’s critics believe, and in some cases would actually harm the public interest. Second, and perhaps more importantly, the Article argues that the existing literature has overlooked significant pro-competitive benefits that result from baseball’s antitrust exemption. Specifically, because baseball is loath to lose its exemption legislatively, Congress has been able to use threats of revocation to help extract a variety of valuable concessions from Major League Baseball (MLB). These concessions provide pro-competitive benefits that would not have been directly obtained through antitrust litigation alone. Perhaps most notably, every single round of league expansion in MLB history has been directly preceded by a Congressional threat to revoke the sport’s antitrust exemption. Therefore, baseball’s antitrust exemption provides Congress with considerable leverage over the sport, ultimately leading to significant, but heretofore overlooked, pro-competitive benefits for the public. Thus, this Article rejects the existing scholarly consensus, and concludes that baseball’s antitrust exemption ultimately has a net pro-competitive effect.

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