[Congressional Record Volume 141, Number 18 (Monday, January 30, 1995)]
[Extensions of Remarks]
[Pages E212-E214]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


              NATIONAL COMMISSION ON PROFESSIONAL BASEBALL

                                 ______


                          HON. JOHN J. LaFALCE

                              of new york

                    in the house of representatives

                        Monday, January 30, 1995
  Mr. LaFALCE. Mr. Speaker, I am today introducing the National 
Commission on Professional Baseball Act of 1995. The legislation 
creates a temporary regulatory authority to oversee the conduct of 
professional baseball to assure that our national pastime will remain 
available and responsive to the American public.
  Like all baseball fans, I have found the events of the past year 
extremely disheartening. We witnessed labor negotiations that focused 
more on outlandish demands by both owners and players that on tangible 
objectives, a baseball strike that halted all major league play after 
August 12 and, for the first time in 90 years, the cancellation of a 
World Series. Recently, the major league team owners unilaterally 
imposed a cap on player salaries that could also jeopardize the 1995 
baseball season. All these events have taken place behind closed doors, 
in secret negotiations without representation of, and little apparent 
regard for, the interests of those who pay the cost of professional 
baseball--baseball fans and taxpayers.
  These events tends to confirm the most negative images of major 
league baseball in the press as big business dominated by the interests 
of obstinate team owners and over-paid players. But baseball has always 
been more than just a business. Last year's PBS special on the history 
of baseball by Ken Burns offered a timely reminder that baseball is an 
important American institution and an historic national treasure. For 
more than 100 years, baseball has been one of the few constants in a 
changing American society. It has been the measure by which generations 
of Americans have recalled their past, identified their heros and 
defined their values and aspirations.
  Today, the values and traditions of baseball are at risk for future 
generations. In the struggle for financial dominance between major 
league owners and players, nowhere are the interests of baseball fans 
represented in any negotiation. Ticket and concession prices are now so 
high that the Nation's pastime, if available at all locally, is priced 
out of the reach of growing numbers of American families. Even watching 
baseball on commercial television, the only way many families now enjoy 
major league games, could be eliminated if broadcast rights are sold to 
pay-per-view television.
  It is clear that baseball owners and players will continue to look 
out only for their own needs. But there is a crying need for someone to 
look out for the interests of fans, of taxpayers and of the communities 
in which both major league and minor league baseball is played. It is 
time for Congress to take steps to return baseball to the American 
people.
  The legislation I am introducing today seeks to accomplish this by 
creating an independent National Commission on Professional Baseball. 
The Commission would serve as a temporary regulatory body and impartial 
arbitrator to oversee the conduct of professional baseball until the 
legal status of major league baseball can be redefined either by 
negotiation or by congressional legislation. Its purpose is simple--to 
provide a measure of protection for the interests of baseball fans and 
taxpayers against the near absolute control over baseball exercised by 
the major league baseball owners.
  Major league baseball is unique among professional sports and 
American business in the broad exemption it enjoys from legal challenge 
under the Nation's antitrust laws. Major league team owners have, in 
effect, the ability to write all their own rules and to impose these 
rules on the public. No outside regulatory authority, nor any form of 
internal self-regulatory control, now exists to check this exercise of 
take-it-or-leave-it market power by major league baseball.
  The current player strike is the most obvious result of this 
unchecked exercise of market power. Where once baseball's antitrust 
exemption was instrumental in allowing baseball to expand and create 
playing opportunities, it now encourages labor disputes and deadlock. 
In every renegotiation of the major league players agreement since 
1972--in eight separate negotiations in 22 years--agreement was not 
reached without either a strike or a lockout.
  But the problems created by the major league's exemption from legal 
challenge go beyond the labor disputes it fosters between owners and 
players and its exclusiveness and 
[[Page E213]] expense for consumers. There are equally adverse 
consequences for minor league baseball teams, local governments and 
taxpayers.
  The relationship between major league and minor league baseball teams 
has become extremely imbalanced, to the extent that minor league teams 
appear analogous to closely controlled franchises with little 
independent control or discretion. The key assets of minor league 
teams--their players, managers, and coaches--are owned and controlled 
by major league teams, leaving minor league owners with authority to 
undertake largely financial management and marketing responsibilities 
for their team. Rights to operate as a minor league team, together with 
players and coaches, can be revoked for almost any reason, and with 
little or no recourse.
  Major league owners have also learned that by threatening to move a 
team to another city they can extract hundreds of millions of dollars 
from local governments to renovate existing ball parks or build 
extravagant new stadiums. Teams have attracted new fans and generated
 substantial windfalls in the first few years after moving into new 
stadiums. Local taxpayers end up paying most of the costs. The major 
leagues have also required smaller communities to invest substantial 
sums to renovate playing facilities in order to retain their minor 
league teams, offering few, if any, guarantees that these teams will 
not be moved in future years. In my own State of New York, for example, 
the cost imposed on smaller towns to meet these facility requirements 
has amounted to nearly $30 million. Once again, the taxpayers pay the 
bill.

  It has become clear that we really need Federal legislation to solve 
some of the major problems faced by baseball. Since baseball is a 
national sport and, indeed, is known as our national pastime, I believe 
Federal legislation is the best way to address this need.
  Proposals have been introduced in the House by Representatives 
Michael Bilirakis and Jim Traficant, and in the Senate by Senator 
Daniel Patrick Moynihan, to repeal baseball's antitrust exemption. I 
fear this may be too simplistic an answer that does not come to grips 
with the totality of the problems of professional baseball. Repeal 
would certainly benefit major league players, and perhaps even 
consumers, if it results in team expansion and lower ticket costs. But 
it could be extremely disruptive of baseball operations generally and 
potentially devastating for many minor league teams. To resume play for 
fans in 28 major league cities could mean losing far more affordable 
access to baseball for fans in many of the 170 minor league parks 
across North America.
  The major alternative to this approach is incorporated in bills 
sponsored by Representatives Jim Bunning and Charles Schumer and seeks 
only partial repeal of baseball's exemption to subject labor issues and 
negotiations to Federal antitrust law. These proposals suffer from the 
opposite problem of addressing only impediments to resolution of the 
current players strike while offering little to address the broader 
problems for baseball fans, local governments and taxpayers, and minor 
league teams.
  The legislation I am introducing today offers a middle ground between 
these alternatives. It creates a seven-member national commission with 
representatives of all the principal parties in professional baseball, 
together with a chairman and two members representing the general 
public. The commission would serve as a temporary oversight and 
mediation body that could act immediately to help resolve an impasse 
between baseball owners and players and also protect the rights and 
interests of baseball fans, minor league teams, local governments and 
taxpayers. It would also facilitate a longer term, more thoughtful and 
balanced approach to resolving the broader problems created by 
baseball's antitrust exemption.
  The legislation does not take a definitive position on the repeal of 
the antitrust exemption. A major duty of the commission would be to 
undertake a multi-year study of the antitrust exemption, taking into 
account all interests and perspectives, and to submit to Congress its 
findings and any recommendations for legislative remedies. The 
commission would be required to analyze the major proposals for 
modifying baseball's antitrust exemption, including total repeal of the 
exemption, partial repeal for purposes of subjecting labor relations 
issues to antitrust jurisdiction, and repeal of the exemption with 
protections to exempt long-standing contractual arrangements between 
major league and minor league teams from the antitrust laws.
  My legislation does take the position that baseball's antitrust 
exemption is, in effect, a government-granted monopoly in much the same 
manner as a local public utility or transportation authority. And like 
any other publicly-sanctioned monopoly, my bill would require public 
oversight to assure that self-interest is not put above the interests 
of the public and consumers.
  In this regard, the proposed commission would be similar to the 
Federal Communications Commission, or any other public body with 
oversight over a restricted industry or market. An important 
difference, however, is the fact that the authority of the proposed 
commission is intended to be temporary during a period of deregulation 
of baseball from the current market restrictions imposed by baseball's 
current antitrust exemption. Since Federal law has permitted a 
restricted national market for major league baseball, the Federal 
Government has both the right and the responsibility to regulate this 
market, just as we regulate other monopolies, to assure that the 
public's interests are protected.
  The primary purpose of the commission is to provide a forum for 
public scrutiny over the conduct of professional baseball at both the 
major league and minor league levels. It would have the authority to 
investigate many aspects of baseball, including the setting of ticket 
prices, expansion or relocation of team franchises, terms and 
conditions of major and minor league player contracts, relationships 
between major and minor league teams, structural requirements and 
financing for stadiums, television broadcast rights, and licensing and 
marketing of baseball merchandise. The commission could intervene in 
these areas upon a determination that an action or policy is 
potentially harmful to the public's interests or the best interests of 
baseball.
  The commission also would have authority to conduct binding 
arbitration in the event of a labor impasse between major league owners 
and players. It could also provide for mediation or arbitration of 
disputes between the major leagues and minor league teams owners. In 
these areas, the legislation accords players and minor league team 
owners an opportunity to resolve disputes with major league team owners 
where no means of viable recourse are currently available.
  A key power of the commission would be its authority to hold public 
hearings and to obtain, if necessary through court action, all relevant 
information and documents needed for its public investigations. Major 
decisions in baseball that affect baseball fans, teams, and taxpayers 
are made routinely in complete secrecy without any public 
representation or disclosure. Major league baseball's financial 
statements are accorded the status of State secrets. And secrecy and 
distrust between owners and players have created major barriers to 
settlement of labor disputes. The commission would lift this veil of 
secrecy in baseball and permit public disclosure of all relevant 
information pertaining to actions that affect the public.
  The commission would also have authority to issue orders, and to 
obtain injunctions if necessary, to delay or halt actions or policies 
by major league team owners until it has had sufficient opportunity to 
hold public hearings and obtain relevant information.
  Finally, the legislation requires that the commission be self-funding 
through payment of fees by the major league baseball owners. Major 
league baseball has reaped enormous benefits as a result of its 
protected market status under Federal antitrust law and has an 
obligation to pay most of the cost of regulating this market to protect 
the public's interests. Funding would be in the form of annual fees 
paid by major league baseball calculated as a fraction-of-a-
percentage--.002 percent--of combined annual team revenues. The manner 
and allocation of these fee payments among major league teams would be 
determined by the commission after consultation with major league team 
owners.
  Mr. Speaker, the single most important issue of economic policy and 
legal principle that every Member of Congress must consider is whether 
baseball owners should retain their unique prerogative to write all the 
rules of our Nation's pastime themselves. The events of the past year, 
and the cancellation of the World Series for the first time in 90 
years, strongly suggest that major changes are needed.
  I am particularly pleased about the recent statements by both 
President Clinton and Senate Majority Leader Dole urging the players 
and owners to reach agreement as quickly as possible. I hope that these 
and other efforts are successful, and that the strike ends forthwith. 
But that alone is not enough, or should not be, because history shows 
that further work stoppages in the future are highly likely to occur. 
So Congress should act on this whether or not a settlement is reached.
  Everyone involved in seeking a solution to this is doing so 
principally for emotional reasons--reviving our national pastime. But 
as the President pointed out, there are serious economic consequences 
as well. Spring training communities will lose $1 million for each 
canceled game; major league cities will lose $1.2 million and some 
2,000 jobs for each 
[[Page E214]] canceled game, according to the U.S. Conference of 
Mayors. This means that the strike has already cost our economy some $2 
billion. We must not forget that it isn't just the owners and players 
who are losing money in this dispute--we are all losing, one way or 
another.
  The many bills that have been introduced demonstrate the wide 
ideological and geographic extent of the interest in dealing with the 
baseball crisis. But the complete or partial repeal of the antitrust 
exemption is too simplistic an answer and will not get to the nub of 
the problem, which is to protect fans, taxpayers, and communities. My 
proposal offers a broader alternative. Under my bill, we will have the 
equivalent of compulsory arbitration to resolve the short-term problems 
and get major league baseball on the fields once again, followed by an 
in-depth study of how we can best organize baseball at all levels under 
conditions that provide future stability for all concerned: players, 
owners, fans, communities and taxpayers throughout the United States.
  I think this is good legislation and sound public policy. I do not 
expect baseball owners to support my proposal; I do not expect major 
league players to support it; but I do hope that fans and taxpayers 
across America will support it, for it is the only proposal designed 
first and foremost for baseball fans and taxpayers. I urge the Congress 
to consider this legislation at the earliest opportunity.


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