Major League Baseball (MLB) has long been exempt from antitrust law, a situation that has drawn significant attention. However, recent events have raised questions about the future of this exemption and MLB's television structure.

Unraveling MLB's Antitrust Dilemma and Television Shift

Baseball and Antitrust Law

1: Section 1 of the Sherman Antitrust Act generally prohibits agreements that unreasonably restrain trade. In the case of MLB, the Supreme Court's rulings in the Federal Baseball case of 1922 and subsequent cases have created a complex web of exemptions. MLB benefits from two main antitrust exemptions. The first, established in 1922, exempted baseball from antitrust scrutiny as it was not considered interstate commerce. Despite subsequent challenges, this exemption remains in place in some areas. The second exemption, passed in 1961, exempts "football, baseball, basketball, or hockey" teams from antitrust law when selling television rights. However, this exemption has its limitations. 2: MLB's antitrust exemption has withstood many legal challenges over the years. For example, in the 2020 decision to reduce the number of minor league affiliates, four clubs sued, alleging violations of antitrust law. But they lost at the district and appellate court levels. The plaintiffs' goal was to have the case reviewed by the Supreme Court, but MLB settled the case instead.

MLB's Current and Future (?) Television Structure

1: MLB teams play a large number of games, with the majority being broadcast by local television networks. While national television deals are significant, local rights are also crucial. However, the recent bankruptcy of Diamond Sports Group has disrupted MLB's business model. As a result, MLB is now considering overhauling its television rights structure by selling all clubs' rights to a single network or platform. This would consolidate the distribution of MLB games and potentially increase revenue. 2: Major League Soccer (MLS) recently made a similar transition by selling all games to Apple TV. But this decision has raised questions about fan access and the value of the deal. In contrast, MLB's proposed plan may face similar challenges. For example, the New York Yankees, which receive a significant amount of revenue from their local rights, have expressed skepticism about giving up their rights.

Antitrust at the Plate

1: MLB's proposed television plan presents typical antitrust concerns. Consolidating the rights into a single product could lead to higher prices and limit consumer access. While the Sports Broadcasting Act may not protect the plan, MLB may argue that its antitrust exemption protects it. However, the Nostalgic Partners case has raised doubts about the future of this exemption. 2: Even without the exemption, MLB's plan may face antitrust challenges. The NFL's experience in a similar lawsuit shows the difficulties in establishing that sports leagues' broadcast agreements are illegal. But MLB's plan may also face internal challenges, as teams like the Yankees have their own interests to consider.