Senate Committee Examining MLB’s Antitrust Exemption

This week, the U.S. Senate Judiciary Committee reached out to the non-profit group Advocates For Minor Leaguers for further information on Major League Baseball’s antitrust exemption. Evan Drellich of the Athletic and Jeff Passan of ESPN (Twitter thread) were among those to cover the development in detail.

The focus of the current inquiry is on how the antitrust exemption affects minor league player pay, the 2019-20 reduction of the number of minor league teams, and the league’s acquisition process for international amateurs. Senators from both parties released statements, which can be found in Drellich’s piece, expressing support for a reexamination of the exemption. MLB has not commented on the matter.

The exemption has been in place for a century. It dates back to a 1922 case in which the Supreme Court ruled that MLB was an intrastate affair outside the purview of the interstate commerce being regulated by federal antitrust law. In subsequent cases, the Court has acknowledged its original reasoning was overly simplistic and no longer applicable in declining to expand the exemption to other professional sports leagues. The Court has nevertheless left the onus on Congress to overturn MLB’s exemption with a new piece of legislation, which it has yet to do.

Passan and Drellich examine the implications of the antitrust exemption in greater detail. Its arguably biggest impact has been in allowing teams to fix low salaries for minor leaguers, most of whom are not part of the MLB Players Association and do not have their own union. Drellich notes that other issues like television blackouts and the process for relocating MLB franchises may also be impacted were Congress to modify or lift the exemption.

While an overhaul of the antitrust exemption could have wide-ranging effects on affiliated ball, this is hardly the first time Congresspeople have hinted at the possibility. In recent years, legislators on different sides of the political aisle have publicly expressed a desire to reconsider or revoke the exemption. Those have come in response to MLB decisions as varied as the minor league restructuring and the call to move the 2021 All-Star Game from Atlanta to Denver. To this point, Congress has not moved forward with any serious threat to the exemption; it’s possible, seemingly likely, this inquiry from the Judiciary Committee also winds up blowing over without an alteration to the existing system.

The Committee’s examination into the international amateur market comes at a time when that process may be nearing an overhaul anyhow. MLB’s desire for a draft to replace the international signing period proved a sticking point in last offseason’s collective bargaining negotiations — one which has yet to be resolved. The MLBPA refused to sign off on an international draft during the winter, and the parties agreed to extend their window for those talks. If the league and union agree on an international draft by July 25, the qualifying offer system — which serves as a drag on the market for some free agents by attaching draft pick forfeiture for signing them — would be eliminated. If the parties do not agree on an international draft, the current amateur signing process and QO will remain in place, likely to again be a key topic during the post-2026 CBA negotiations.

In a separate post Wednesday, Drellich reexamined many of the potential effects that could arise from an overhaul of the international amateur system. MLBPA executive director Tony Clark declined to delve into specifics on the status of negotiations, telling The Athletic:

We agreed in March to explore whether a negotiated and mutually acceptable agreement could be reached for an international draft. Additional time on this complex issue was needed precisely because the league’s proposal was not and is not anywhere close to acceptable. The league committed to further negotiation on these complex issues, and we expect those discussions to continue in the coming days and weeks. Whether in the end a negotiated, mutually acceptable agreement can be reached remains to be seen.

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