Foul Ball: Major League Baseball's Monopoly

Once upon a time, goes the convenient myth, baseball was a sport, just a diversion, hardly a for-profit enterprise. Doubters of this rose-tinted history are referred to the U.S. Supreme Court's 1922 ruling that professional baseball is "an amusement," not a business dependent on interstate trade for its viability. Ever since that curious bit of jurisprudence, Major League Baseball has been exempted from federal antitrust laws. In other words, it's a legal monopoly.

In the era of the $7 million infielder and the $500 million cable-TV deal, the notion that baseball is not a business seems quaint. Indeed, a later Supreme Court labeled the 1922 decision "illogical." The antitrust exemption still stands, however. And freed from rival leagues and federal oversight, MLB's owners have served no interests but their own.

Change now may be lurking outside the owners' boxes. On Dec. 10, the Senate's antitrust subcommittee will start hearings on the baseball exemption. Senator Connie Mack (R-Fla.), the namesake grandson of the legendary owner-manager and an advocate of eliminating baseball's distinction, admits that any rule change is "an uphill battle." But by their own recent actions, MLB's owners may have hastened the end of their protected status.

XENOPHOBIA. That's because an antitrust exemption is an implied contract: The federal government suspends its usual bias against monopolies as long as the monopoly in question serves the public good. Major League Baseball, by this reasoning, can operate unfettered as long as it satisfies America's appetite for the national pastime. But by their high-handed treatment of players, fans, host cities, and their own commissioner, the owners have abused their privilege.

At the heart of the problem is baseball's degree of exclusivity, which penalizes millions of fans. Although many cities, notably Buffalo and St. Petersburg, are clamoring for a home team, MLB doles out new franchises less often than Oakland Athletics' ace relief pitcher Dennis Eckersley blows a game. Moreover, owners can veto any team's plan to move, and they can keep television stations from airing games that would compete head-to-head with other baseball broadcasts.

Two recent franchise sales show plainly that MLB's owners believe they are accountable only to themselves--not the nation. When Seattle Mariners owner Jeffrey Smulyan wanted to sell the team to a group of investors led by Nintendo Co. executives Hiroshi Yamauchi and Minoru Arakawa, then-Commissioner Fay Vincent muttered about preserving the integrity of the American game. He masked his xenophobia by arguing the issue was ensuring "a guarantee of local control." But if local control is so important, then how can Tampa resident George Steinbrenner own the New York Yankees?

In the end, the Nintendo group shuffled their ownership shares so that Yamauchi put up the bulk of the money but held a minority stake. Backed by Nintendo, the Mariners stayed in Seattle, but the elaborate camouflaging of Nintendo's investment did little more than let the owners keep the dread overseas presence at arm's length.

GIANT LETDOWN. San Francisco also will be keeping its ball club, whether it wants to or not. After Giants owner Bob Lurie worked out a deal to move his boys of summer out of chilly Candlestick Park and down to the climate-controlled Suncoast Dome in St. Petersburg, the National League owners nixed the deal. No matter that Bay Area voters four times turned down proposals to build a better stadium for the Giants or that St. Pete desperately wants big-league baseball or that the Florida group was the high bidder. By junking the sale, the owners signaled that franchise stability--that is, maintaining their monopoly--is more important than the fans' wishes. As Florida's Mack puts it: "How can keeping a franchise in a money-losing market be good for baseball?" If Congress lifted the exemption, it would be easier for baseball-hungry cities to lure a team that's poorly supported elsewhere.

Major League Baseball argues that its special status has worked for 70 years and needs no fixing. But the owners ought to remember that competition confers its own benefits. Way back in 1903, the National League finally recognized that the upstart American League wasn't going away. Rather than try to kill off its rival, the National League agreed to send out its champions, the Pittsburgh Pirates, against the Boston Red Sox, the AL's best. The name the owners dreamed up for the clash: The World Series.