The bid by the City of San Jose to lure the Oakland A’s baseball team to San Jose has been rendered a fatal blow by the US Supreme court. In not wishing to hear arguments on the case, the court allowed the Major League Baseball Anti-Trust Exemption (passed in 1922) to stand. This exemption allows for teams to carve out territorial areas. The current state of Northern California baseball only allows the A’s in certain counties and the San Jose area was not one of them. The court will allow Congress to see if it wants to repeal the exemption. San Jose argued that the exemption stifled competition and that the rules are now archaic and should be modified to reflect modern technology (super television stations and the sheer volume of games on television).
In light of modern technology, does the exemption make any sense now? Shouldn’t competition for the product of the consumer (money) be allowed to go to the best team in terms of record, marketing and the various other factor that mandate a successful business? Do multi-billionaires really need the government to ensure their financial success? Should all industries have this protection, or, should competition make business succeed or fail?
With the ultimate capitalist (the Donald) running for the Republican Presidential nomination, one must wonder if he would endorse the baseball antitrust exemption. Imagine if a real estate developer could not build in an area because a prior builder was there first. Would this be allowed to stand in the courts, both legally and in the court of public opinion? Probably not. The grand old game (in what used to be America’s pastime until the NFL took over) is in need of a reality check to the modern world. Sports franchises are a major asset in today’s economy. They generate large numbers of jobs (albeit not high paying) for a period of time to the local economy. Should a competitor be locked out of the opportunity to compete because of an agreement more than 90 years old? California favors competition. A competing business can open next door selling the same product. No court could/would prevent such a situation from arising. Competition would be the deciding factor. Why should the business of baseball continue have such an exemption?
At one point in time NyCity had three major league baseball teams: the Brooklyn Dodgers (before their move to Los Angeles), the Giants (before their move to San Francisco) and the Yankees. All teams ran their businesses without rancor and attempted to put the best product on the field and come up with the best promotions for fans, etc. Granted the one major difference was that this was before free agency existed in baseball. In the pre free agency era baseball had a “reserve clause”. What this allowed a team to do was keep a player that they had signed forever. He could not change teams if he wanted. It was a one way street controlled by baseball. Free agency allowed players to have the movement to change teams as they saw fit and if they could find a team to pay them. Player move may be necessitated by family issues, the desire to win with a certain team and a variety of other factors. Isn’t this just a cost of doing business for the owners? Players come and go and the owners remain. Surely they do not need such an exemption to protect them from themselves. The major TV deals divide monies among the teams. Although some teams (Yankees and Dodgers in particular) have their own TV networks that bring in substantial monies over and above those of other teams. These TV deals represent business acumen of the clubs involved. If a team cannot generate the right amount of revenue, then they need to reexamine how they do business and tweak what they do.