The challenge to MLB’s antitrust exemption is turning a corner: Payday chase or history?

Major League Baseball’s antitrust exemption faces arguably its most meritorious legal challenge in decades. But despite the relative strength of the case that could be heard in the Supreme Court within months, the lawsuit could also soon fall by the wayside if the league opens its portfolio widely enough.

Although any case appealed to the nation’s highest court is considered a long shot, experts say the lawsuit sparked by MLB’s expulsion of 40 teams from its minor league system has better odds of attracting the court’s attention — at least compared to previous attacks. On baseball’s notorious exemption.

“It’s the strongest challenge since many cases arose in the 1990s,” said Stephen Ross, executive director of Penn State’s Center for the Study of Sports in Society, and a longtime critic of baseball’s privileged legal status.

This power is said to be partly due to the case itself, as well as to the judges who will hear it. The Supreme Court’s unanimous decision two years ago in an antitrust case, which cleared the way for NCAA athletes to make money off their name and likeness, “changed everything,” said Brad Snyder, a law professor at Georgetown University.

Since 1922, MLB and its teams have enjoyed protection from antitrust scrutiny that most companies do not enjoy, the product of an anomalous Supreme Court decision that year. Although the scope of the exemption has been modified over time, it still allows MLB to engage in monopolistic practices that would be considered illegal in other industries.

The plaintiffs in the case at hand are two of the teams expelled by MLB: the Norwich Sea Unicorns from Connecticut, and the Tri-City ValleyCats, based near Albany, New York. They argue that in an environment where typical antitrust laws apply, the 30 major league teams would need to compete with each other for the number of minor league teams they partner with. This contrasts with what happened before the 2021 season, when MLB clubs collectively reduced the number of farm teams across their ranks to 120, down from 160.

“A lot of people ask me, ‘Well, who cares if baseball has an antitrust exemption?’” said Snyder, who, like Ross, recently signed one of several briefs urging the Supreme Court to take up the case. Small and exploited. …The shrinkage of minor league affiliates without any sort of free market competition, allowing these teams to compete on price — they are simply excluded from minor league affiliates — truly illustrates the evils of monopoly.”

But the case may disappear before the Supreme Court decides whether to hear it.

The two minor league teams have a different but related lawsuit against MLB in New York state court that has come to a head. Settlement talks are scheduled to take place before a judge on Tuesday, just two weeks before the trial begins on November 13.

As part of those negotiations, MLB could tell minor league owners that both cases must be settled at the same time.

“I wouldn’t be surprised if that’s what they do,” said Jim Quinn, an attorney for the minor league teams. “But for that to happen, they will have to pay a lot of money.”

Quinn said the simultaneous lawsuits are designed to create as much pressure on MLB as possible, a power play. MLB declined to comment.

Together, Norwich and Tri-City ownership appear to be on the verge of a big decision in the coming weeks: either reach a settlement, or allow the Supreme Court case to move forward and risk guaranteed money in pursuit of legal history, baseball history, and perhaps even a greater good.

Settlement sound

Tri-City club owner Doug Gladstone realizes he’s become involved in a battle that extends beyond his own business.

“When we started, it was about our team, because we felt wronged,” Gladstone said. “Obviously it’s gotten bigger with the antitrust case. I feel like it has some impact on the decision-making process for us for sure, bigger picture.”

“There’s a lot of people rooting for this. I think there’s a lot of people on the fringes who wish this would change.”

But the plaintiffs are not promising that they will take the antitrust case as far as possible.

“We are always open to compromise,” Quinn said.

E. Miles Prentice III, who owns Norwich, did not respond to an interview request.

Many have tried and failed to overturn baseball’s famous protection, which is widely criticized among legal scholars. That makes the possibility of an above-average baseball antitrust lawsuit settlement a disappointment to exemption opponents like Snyder, who acknowledged he would find it a disappointing outcome.

Of a host of amicus curiae briefs filed with the Supreme Court last week, perhaps the most influential came from 18 attorneys general across the country. In imploring the court to take the case, they argued that when MLB cut 40 teams, the states themselves had no recourse.

“States are prevented from exercising their historic police powers and enforcing their antitrust laws by a century-old federal exemption…” the brief read.

Ironically, the valid arguments conveyed in amicus curiae briefs may end up primarily benefiting only the two plaintiffs.

Quinn, 78, is a prominent name in sports circles for his work helping NBA and NFL players. Safe free agency. Even with his resume, a waiver from baseball is something of a white whale.

“I think I already have a legacy,” Quinn said. “But I said to someone recently, ‘I’d like to be able to put on my tombstone the words ‘We eliminated the baseball exemption.’ … That would certainly be a nice way to end it.”

However, Quinn and his clients ultimately have no obligation to postpone settlement for the sake of any broader benefit.

“Clients, but not GameCoin customers, can choose to give up their short-term economic interests to serve a broader purpose,” Ross said. “If these people want to take a bunch of money to leave, that’s absolutely their right and privilege.”

Don’t tell me the odds

Experts see some differences between this ball in baseball exemption and previous attempts, including the current court’s willingness to overturn precedent. The Supreme Court had previously said that Congress must make any subsequent changes to the exemption. But today’s judges may feel differently.

This court’s ruling on college athletics in NCAA v. Alston also suggests to lawyers like Snyder that a baseball exemption could be in the court’s sights. Over time, some justices have publicly criticized the baseball exemption in various comments as well.

But if baseball’s current case is settled — or the Supreme Court declines to consider it — those hoping to overturn the exemption worry it will be some time before another worthwhile opportunity arrives.

“Unless the government is willing to actually intervene, the only time you can make a case is if some wealthy private party is also affected by monopoly power,” Ross said. “The problem with rich private party involvement is that they are not the most attractive party to present the case.”

Snyder used to tell his law students that minor league players were prime candidates for antitrust suits. That changed last year when small unions unionized, meaning they would be subject to labor law rather than antitrust law. (Members of major unions, meanwhile, don’t run for two reasons: They also have a union, and Congress in 1998 amended the exemption so that it could never apply to their ranks.)

Attorney Garrett Broshuis does not see a clear successor to the current case. He has successfully taken on MLB in court, reaching a $185 million settlement for minor players in a wage violation lawsuit last year. But he also knows the risks of antitrust lawsuits with the league: He once filed suit challenging the exemption on behalf of the scouts, which the Supreme Court took up He refused to listen.

“When will there be another opportunity like this?” – Broshuis asked. “You’ve had franchise relocation cases that go nowhere. I had my scouting case a few years ago. That was a decent candidate, but he didn’t have the widespread support that a case like this would have.”

“You can get business interests behind an issue like this. You can get Republicans behind this, where it’s bipartisan as well. What other kind of effort would get this kind of broad support? It’s hard to imagine another opportunity like this. If not now, when will Will it happen?

But even when tough situations arise, MLB relies on its deep pockets to scuttle them.

The current antitrust lawsuit originally counted four teams as plaintiffs. Half of them, the Staten Island Yankees in New York and the Salem Keizer Vulcanos in Oregon, have already reached settlements with the league.

Snyder pointed to an earlier example. In the 1940s, New York Giants player Danny Gardella briefly joined a team in Mexico, where players were being lured by big salaries. When Gardella was suspended, he sued the league before settling the case for $60,000.

“I felt like I was getting paid, but being a poor man, I felt somewhat justified,” Gardella said. According to the Society for American Baseball Research. “It wasn’t like I had a lot of money and it was paid off.”

“The lawyers thought we couldn’t win,” then-Commissioner Happy Chandler admitted afterward.

“The reason we’re in this crazy situation where Major League Baseball has a legal monopoly is because MLB was smart enough to settle with Danny Gardella after he was blacklisted from the Mexican League,” Snyder said. “If you’re investing in a minor league team, and Major League Baseball comes to you and says, ‘Hey, we’ll settle with you a certain amount of money’…that’s what a monopolist does, is try to perpetuate their position.” “Monopoly.”

(Top photo of a Kane County Cougars game. The team was one of the minor league organizations that lost its major league affiliation: Brendan Kennedy/Toronto Star via Getty Images)