Senate Judiciary Committee sends MLB antitrust exemption letter

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The Senate Judiciary Committee on Tuesday signaled its intentions to revisit MLB’s long-standing antitrust exemption with a letter of inquiry to Advocates for Minor Leaguers, a nonprofit group focused on raising awareness about salary and working condition concerns in baseball’s lower levels.

The letter – signed by Sens. Richard J. Durbin (D-Ill.), Charles E. Grassley (R-Iowa), Richard Blumenthal (D-Conn.) And Mike Lee (R-Utah) – seeks information about the way that exemption affects working conditions in the minor leagues, particularly “about how baseball’s antitrust exemption is impacting competition in the labor market for minor league ballplayers.”

The inquiry is the latest and most significant signal that MLB’s century-old antitrust exemption, the only one of its kind in professional sports, is facing unprecedented scrutiny in the wake of reports about MLB teams using the exemption to limit costs in the minor leagues. An MLB official declined to comment on the letter.

While the 1998 Curt Flood Act legislated that antitrust laws would apply to employment of players, and because players collectively bargain major league working conditions with club owners, MLB players are now largely able to take advantage of market forces to drive up salaries at that level. But in the minor leagues, where even recent pay increases mean players often make less than $ 20,000 per season, players are subject to salary standards and working conditions in which they have no say.

“We need to examine how Major League Baseball’s 100-year-old antitrust exemption is affecting the operation of Minor League baseball teams and the ability of minor league ballplayers to make a decent living,” Durbin, chairman of the Senate Judiciary Committee, wrote in a statement. “This bipartisan request for information will help inform the Committee about the impact of this exemption, especially when it comes to Minor League and international prospects. We need to make sure all professional ballplayers get to play on a fair and level field. ”

MLB took over operations of the minors leagues before the 2021 season and staged a massive overhaul, moving teams and changing facility standards with the stated intent of improving conditions for up-and-coming players. MLB has instituted pay raises and mandated teams provide housing for players since the takeover, policies the league can force all teams to implement because of that exemption. But players are still only paid during the season, and most still make far less than the minimum wage during that time. More relevant to this inquiry – they also make far less than they would on the open market.

“Minor league players are far and away the group most negatively impacted by baseball’s antitrust exemption. MLB owners should not have a special license to underpay their workers, ”Advocates for Minor Leaguers Executive Director Harry Marino said in a statement. “We are confident that Congress will recognize as much through this process and, ultimately, repeat baseball’s antitrust exemption as it relates to issues concerning the minor leagues.”

The committee’s letter also solicits information about the way the antitrust exemption affects other aspects of minor league operations, such as movement and contraction of teams and corruption in the international system. MLB contracted 40 minor league teams before the 2021 season, and has proposed instituting an international draft to address inconsistencies in that system. The MLB Players Association has until July 25 to accept an international draft in exchange for the elimination of draft pick compensation for top-tier free agents, or to reject it and live with the qualifying offer system players believe limits free agent earning ability.

But whatever happens with that draft, the letter is just the latest in a series of developments suggesting MLB’s antitrust exemption is on shakier footing than ever before.

Two weeks ago, the Department of Justice filed a statement of interest in an antitrust suit brought against MLB by owners of the contracted minor league teams. In that statement, the Department of Justice called the exemption “an aberration” and suggested that it “does not rest on any substantive policy interests that justify players and fans losing out on the benefits of competition.” Similar lawsuits have been filed in recent years, as have state-level suits about minor league wages.

Similarly, when the Supreme Court issued its ruling in NCAA v. Alston Last year, the majority opinion included a note about why the baseball exemption was not something that would be extended to the NCAA or other sports leagues as a way to prevent anyone from arguing that baseball’s exemption should be the norm.

“To be sure, this Court once dallied with something that looks a bit like an antitrust exemption for professional baseball [in Federal Baseball], ”Justice Neil M. Gorsuch wrote. 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]. ”

Multiple lawsuits are making their way through the court systems now, and at least one of them – the aforementioned suit led by the since-contracted Staten Island Yankees – was crafted specifically to test the antitrust exemption in the highest possible court. As the letter suggests, Congress is also taking an interest.

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