[Congressional Record Volume 141, Number 104 (Friday, June 23, 1995)]
[Senate]
[Pages S8991-S8994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               MAJOR LEAGUE BASEBALL ANTITRUST REFORM ACT

  Mr. LEAHY. Mr. President, I note that we are approaching the end of 
June. We are approaching the July Fourth weekend. I must say, I hear 
staff and everybody else's sigh of relief, and I agree.
  But as we approach the July Fourth weekend, we know the All Star 
game, featuring the finest major league baseball players, cannot be all 
that far behind. It looks like the All Star game will actually be 
played this year and the year-old dispute about player pension fund 
payments has now been resolved.
  We should also note that this year the major league season did not 
begin until a Federal judge granted an injunction, and the owners and 
the players, who shut the game down last August and robbed the fans of 
pennant races and the World Series, finally declared a cease-fire in 
their ongoing hostilities. They then had to scramble to begin a 
shortened 144-game schedule.
  Another unfair labor practice proceeding against the owners is still 
pending, although that hearing has now been postponed. I hope that this 
is a sign that the owners and the players will finally do the right 
thing, finally be responsible, finally get back to the bargaining table 
and reach a collective bargaining agreement that will remove the cloud 
that is hanging over the rest of the season and all of major league 
baseball.
  I am not the only one who expresses that concern, Mr. President. Look 
at the fans. Interest in major league baseball is undeniably down. 
Attendance figures show it. They are down between 20 and 30 percent. I 
suspect the viewership figures show it and certainly advertising and 
merchandising revenue show it as well.
  In fact, in another major blow to the grand old game this morning, 
both NBC and ABC have indicated that they are not even going to bid on 
broadcast rights for baseball in the future.
  When I go to a baseball game this evening, I suspect for the first 
time in years I am going to see empty seats. I think that is really 
something we should all be concerned about, those who love baseball.
  Older fans have been turned off, and the younger ones have decided to 
spend their time and attention on other pursuits.
  Of course, injuries to some of the star players have not helped. 
Those injuries are not the cause of baseball's decline, however. 
Indeed, other players and teams are having outstanding seasons and 
major league rosters are full of bright, young, talented players.

[[Page S8992]]

  The problems are anger, disillusionment, and disdain. As the season 
began, the acting commissioner was quoted as saying: ``We knew there 
would be some fallout. It's very tough to assess, but there is a 
residue from the work stoppage, there's no question. There is a lot of 
anger out there.''
  Let me tell him, there is. At our February 15 hearing on legislation 
to end baseball's antitrust exemption, I asked the acting commissioner 
how fans get their voices heard. I will quote what I said at that time: 
``Fans are disgruntled; I mean, they are really ripped. Do they vote 
with their feet?''
  I asked that question of the acting commissioner at that hearing. 
Unfortunately, that was in February. The strike dragged on, fans 
suffered through the owner's experiment with so-called replacement 
teams--and what a laugh that was--and the matter remains unsettled and 
unsettling.
  Mr. Selig answered me last February by declaring he understood the 
frustration fans were feeling, but he observed that when the strike 
ended, there would be an enormous healing process. I told him back in 
February, ``The longer you go, the harder that healing process is going 
to be.''
  I wish I had been wrong; I believe I was right. Because it is sad 
that for some, the wounds will not heal; for others, it will take a 
very long time; for still others, they will never have the attachment 
to the game that begins in childhood and binds generations and nurtures 
over time.
  I do not think that those who are the game's current caretakers 
appreciate the damage they have done. I do not believe those who are 
running major league baseball today, with few exceptions, realize the 
enormous damage they have done to baseball. Slick advertising and 
discount tickets and special giveaway nights are not going to make up 
the difference. The last year has been disastrous. There are a lot of 
people who are more interested in their own egos and own pocketbooks 
than they were in the true interest of the fans.
  What the fans are saying is, ``You took us for granted, you hurt us, 
you insulted us, you disregarded us, you worried only about your own 
egos and your own pocketbooks, so now maybe we will let you know how we 
feel.''
  With broadcast networks, who were partners with the baseball owners 
in the baseball network, today indicating that they will be abandoning 
the game, fans across the country who had expected to follow their 
teams over free television will likely be forced to suffer another 
blow.
  Nothing has been solved. The problems and differences persist, and 
things are getting worse. There is no collective bargaining agreement 
and, as far as the public is aware, no prospects of one any time soon. 
To borrow from an old baseball observer, ``It ain't over.''
  Why should people return to the game or, as we are apparently viewed, 
why should we patronize this commercial activity if the risk remains of 
having affections toyed with again and having hopes of a championship 
dashed--not by a better team but by competing economic interests?
  So I believe the time has come for the Senate to act. The Senate 
Antitrust Subcommittee has reported a bill to the Judiciary Committee. 
This consensus bill, S. 627, is sponsored by Senators Hatch, Thurmond, 
Moynihan, Graham, and myself. It would cut back baseball's judicially 
created and aberrational antitrust exemption. Congress may not be able 
to solve every problem or heal baseball's self-inflicted wounds, but we 
can do this: We can pass legislation that will declare that 
professional baseball can no longer operate above the law. We can say 
the same laws that apply to every other business apply to baseball. The 
antitrust laws that apply to all other professional sports and 
commercial activity should apply to professional baseball, as well. 
Professional baseball has a very special exemption that no other 
business got. It was given to them with the trust and expectation that 
they would use it in the best interests of the game. They have violated 
that trust. They have had people testify before us who were less than 
candid with the Congress. And they turned their backs on the most 
important people--the hundreds of thousands, even millions, of fans 
throughout this country.

  Along with the other members of the Judiciary Committee, I recently 
received a report of the section on antitrust law of the American Bar 
Association that examines the Hatch-Thurmond-Leahy, et al., bill. The 
antitrust section of the ABA reasons that professional baseball's 
antitrust exemption is not tailored to achieve well-defined, justified 
public goals. The antitrust section, therefore, ``supports legislative 
repeal of the exemption of professional major league baseball from the 
Federal antitrust laws.'' Moreover, the report notes that putting 
professional baseball on an equal footing with other professional 
sports and business and having the antitrust laws apply ``cannot fairly 
be criticized as `taking sides' '' in baseball's current labor-
management battle.
  I look forward to working with our Judiciary Committee chairman to 
have our bill, S. 627, considered by the Judiciary Committee at our 
earliest opportunity and then promptly by the Senate. It is time the 
Senate act and end this destructive aberration in our law. Then maybe 
when baseball is subject to the same laws as everybody else, when they 
are subject to the same laws as all other professional sports, as all 
other commercial activity, maybe they will realize that they are not 
above the law--just as I hope they begin to realize they are not above 
the fans' interests.
  So, Mr. President, when I go to the baseball game this evening--
something I will thoroughly enjoy doing with friends and family--I hope 
I see more people than we have seen in the past. But I also hope I see 
owners and players coming together to put the interests of baseball 
above themselves.
  Mr. President, I ask unanimous consent that the report of the ABA 
section on antitrust law be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Report of the Section of Antitrust Law of the American Bar Association 
  on the Proposed Major League Baseball Antitrust Reform Act of 1995--
                              June 9, 1995

       These views are presented on behalf of the Section of 
     Antitrust Law of the American Bar Association. They have not 
     been approved by the Board of Governors or House of Delegates 
     of the American Bar Association and, accordingly, should not 
     be construed as representing the position of the Association.


                              introduction

       On March 27, 1995, Senators Hatch, Thurmond, Moynihan, 
     Leahy and Graham introduced the Major League Baseball 
     Antitrust Reform Act of 1995 (the ``Baseball Antitrust 
     Act'').\1\
       The bill would amend the Clayton Act \2\ to subject the 
     business of professional major league baseball to the federal 
     antitrust laws.
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     Footnotes at end of article.
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                           executive summary

       The Senate is considering legislation to reverse major 
     league professional baseball's judicial exemption from the 
     antitrust laws. The exemption dates to a 1922 Supreme Court 
     decision that the business of major league professional 
     baseball was not engaged in interstate commerce.
       Supreme Court decisions affirming the baseball exemption on 
     the grounds of stare decisis in 1953 and 1972 indicate that 
     judicial reversal of the exemption is highly unlikely. These 
     decisions cite repeated Congressional consideration and 
     inaction in support of the conclusion that it is up to 
     Congress to repeal the exemption.
       The American Bar Association disfavors any exemptions that 
     are not narrowly tailored to achieve well-defined goals. The 
     baseball exemption, rooted in a limited, long-since-
     abandoned, view of interstate commerce, does not meet this 
     test. Accordingly, the Section of Antitrust Law of the 
     American Bar Association (the ``Section'' or the ``Antitrust 
     Section'') supports legislative repeal of the exemption of 
     professional major league baseball from the federal antitrust 
     laws.
       Repeal of the baseball exemption can and should permit 
     uniform development of antitrust law in the sports industry. 
     The Supreme Court has ruled that other sports businesses are 
     subject to the federal antitrust laws, giving rise to a 
     substantial body of sports-related antitrust law, notably in 
     connection with football and basketball. The very interest in 
     uniform application and development of antitrust law that 
     prompts support for repeal of baseball's anomalous exemption 
     demands that Congressional consideration of any such 
     provision be industry-wide rather than baseball-specific.


                               discussion

       In 1922, the Supreme Court ruled that the business of 
     professional baseball was not engaged in interstate commerce, 
     and, consequently, was exempt from antitrust scrutiny.\3\ 
     Both professional baseball and judicial interpretation of the 
     commerce clause subsequently evolved. In 1953, the Court 
     upheld

[[Page S8993]]

     the exemption in a per curiam opinion.\4\ By 1972, the Court, 
     acknowledging that professional baseball was in fact a 
     business engaged in interstate commerce,\5\ refused to 
     overturn the exemption on the ground that Congressional 
     failure to reverse it was tantamount to endorsement.\6\
       The Court's adherence to precedent, in 1953 as well as 
     1972, was based on Congress' positive record of inaction. 
     Removal of professional baseball's antitrust exemption has 
     been the subject of various unsuccessful legislative efforts. 
     At least one such effort, in the early 1950's, was abandoned 
     in the belief that the Supreme Court would reverse its 
     earlier position with respect to baseball.\7\ In baseball 
     terms, the Supreme Court and Congress have been pointing to 
     one another and shouting, ``Yours'' for decades.\8\
       It has long been the position of the American Bar 
     Association that any exceptions to antitrust regulation 
     should be narrow and focused to achieve well-defined 
     goals.\9\ Professional baseball's exemption is neither. 
     Accordingly, we recommend that major league baseball should 
     be made subject to the same antitrust laws generally 
     applicable to all other American businesses in general and 
     sports businesses in particular.\10\ To that end, we support 
     the bill, S. 627, proposed by Senators Hatch, Thurmond, 
     Leahy, Moynihan and Graham, to the extent that each reverses 
     baseball's anomalous antitrust exemption and places 
     professional baseball on the same footing as other 
     professional sports.
       The courts have readily acknowledged, and the Section 
     agrees, that a certain level of cooperation among franchises 
     is essential to the business of baseball and that this is an 
     important difference from most other businesses. Although, 
     for example, the Dodgers and Giants may want to dominate one 
     another on the field, they do not want their rivals to go out 
     of business. There is little dispute that sports businesses 
     can agree on many matters, such as scheduling and rules of 
     play, essential to the joint enterprise.\11\
       Accordingly, baseball owners may persuasively argue that 
     they may lawfully enter into agreements as joint venturers 
     that owners of other business could not. However, much the 
     same can be said of other American sports businesses. While 
     baseball owners particularly emphasize franchise relocation 
     issues and their commitment to the minor leagues in support 
     of the exemption, all professional sports leagues face 
     franchise relocation issues and at least one, professional 
     hockey, supports a minor league player development structure. 
     With parity in circumstances should come parity in treatment 
     under the law.
       Arguments as to the alleged necessity of various trade 
     restraints can and should be made in court. Like professional 
     baseball and commerce clause interpretation, antitrust law 
     has also evolved since 1922. The ``rule of reason'' standard 
     of review, which has largely supplanted the labeling of 
     various acts as per se antitrust violations, and which is 
     routinely applied to antitrust cases involving sports,\12\ 
     will afford baseball ample opportunity to demonstrate that 
     specific cooperative activities among its franchises do not 
     unreasonably restrain competition. Any truly pro-competitive 
     conduct should be adequately protected by proper application 
     of the rule of reason. The existing baseball exemption is not 
     based on any determination to the contrary; indeed, because 
     of the exemption, there is essentially no judicial history 
     upon which to base a contention that the rule of reason 
     cannot be properly applied to professional baseball. Nor do 
     fact-specific applications of the rule of reason in cases 
     involving other sports support such a contention.
       In addition, professional baseball cannot and should not be 
     prevented from seeking explicit Congressional authority for 
     internal governance of, for example, minor league player 
     development or the location of major league franchises.\13\ 
     The antitrust laws sanction legitimate efforts to petition 
     the government for legislative action. While we take no 
     position at this time on the need for any particular grant of 
     such authority, we note that the current judicial exemption 
     immunizes professional baseball from antitrust scrutiny 
     without the factual predicate necessary for Congress to make 
     an informed determination. Continuation of this exemption is 
     therefore inconsistent with the goal of narrow, focused 
     exceptions to antitrust principles and the status of the 
     other major sports businesses that do not enjoy exemptions.
       The proposed legislation would permit judicial 
     determination of the proper application to baseball of the 
     labor and antitrust laws. The non-statutory labor exemption, 
     and the statutory labor exemption, embody the delicate and 
     sometimes elusive balance between the oft-conflicting goals 
     of antitrust law and labor law. Properly striking this 
     balance is no small task, particularly in the context of 
     professional sports. The contours of this body of law have 
     been shaped by decisions rendered over more than half a 
     century.\14\ The judicial process of resolving the proper 
     application of the non-statutory exemption to professional 
     sports is well under way,\15\ and the proposed legislation 
     will further this process.
       We neither endorse nor reject the major league player 
     associations' argument that were professional baseball 
     subject to antitrust laws, the non-statutory labor exemption 
     would not exempt from antitrust scrutiny the owner's 
     unilateral imposition of a salary cap.\16\ Such an argument 
     should be made in court, so that it may be resolved in 
     harmony with analogous cases. Similarly, the courts are also 
     the proper forum for resolution of any dispute over whether 
     and to what extent labor markets are a proper subject of 
     antitrust regulation.
       Putting professional baseball on an equal footing with 
     other professional sports cannot fairly be criticized as 
     ``taking sides'' in favor of players in baseball's current 
     labor strife. Representatives of the baseball owners have 
     repeatedly argued that baseball's current exemption is 
     irrelevant to its bargaining relationship with major league 
     players because the owners' conduct is protected by the labor 
     laws and the non-statutory labor exemption.\17\ Repeal of the 
     exemption will afford the owners the opportunity to prove 
     this contention. Freeing them from the responsibility to do 
     so, by Congressional inaction, would be ``taking sides'' in 
     favor of the owners.
       We look forward to working with the members of the 
     Judiciary Committee on legislation to reverse major league 
     baseball's exemption from the antitrust laws.

                               Footnotes

     \1\ A copy of the proposed legislation, S. 627, is appended 
     hereto. Differing versions of legislation on this topic had 
     been introduced by Senators Hatch, Moynihan and Graham (S. 
     415) and Senators Thurmond and Leahy (S. 416) earlier. 
     Hearings on both of these bills were conducted by Senator 
     Thurmond's Subcommittee on Antitrust, Business Rights and 
     Competition on February 15, 1995.
     \2\ 15 U.S.C. 12 et seq.
     \3\ Federal Baseball Club of Baltimore v. National League of 
     Professional Baseball Clubs, 259 U.S. 200, 208-209 (1922).
     \4\ Toolson v. New York Yankees, 346 U.S. 356, 357 (1953); 
     see also United States v. Shubert, 348 U.S. 222 (1955) 
     (Commenting on Toolson: ``Congress, although it had actively 
     considered the [Federal Baseball] ruling, had not seen fit to 
     reject it by amendatory legislation.'' 348 U.S. at 229.)
     \5\ Flood v. Kuhn, 407 U.S. 258, 282 (1972) (Respondent 
     Baseball Commissioner Kuhn's Answer to Flood's Complaint 
     included the admission that ``under present concepts of 
     interstate commerce defendants are engaged therein.'') 407 
     U.S. at 291 (Marshall J., dissenting).
     \6\ ``Remedial legislation has been introduced repeatedly in 
     Congress but none has ever been enacted . . . [t]his, 
     obviously, has been deemed to be something other than mere 
     congressional silence and passivity.'' 407 U.S. at 283.
     \7\ Subcomm. on Study of Monopoly Power of the House Comm. on 
     the Judiciary, Organized Baseball, H.R. Rep. No. 2002, 82d 
     Cong., 2d Sess. (1952).
     \8\ ``If there is any inconsistency or illogic in [baseball's 
     retention of the exemption after Supreme Court rulings that 
     other professional sports are subject to the antitrust laws], 
     it is an inconsistency and illogic of long standing that is 
     to be remedied by the Congress and not by this court.'' 
     Flood, supra, at 284.
     \9\ See, e.g., McCarran-Ferguson Act Recommendations of ABA 
     Commission to Improve Liability Insurance System (Feb. 1989).
     \10\ In every other instance in which a court has had to 
     decide whether an organized sport is subject to the antitrust 
     laws, the court has decided in the affirmative. Radovich v. 
     National Football League, 352 U.S. 445 (1957) (professional 
     football); Haywood v. National Basketball Association, 401 
     U.S. 1204 (1971) (professional basketball); Nassau Sports v. 
     Peters, 352 F. Supp. 870 (E.D.N.Y. 1972) (professional 
     hockey); Deesen v. Professional Golfers' Ass'n of America, 
     358 F.2d 165 (9th Cir.), cert. denied, 385 U.S. 846 (1966) 
     (professional golf); Washington State Bowling Proprietors 
     Ass'n v. Pacific Lanes, Inc., 356 F.2d 371 (9th Cir.), cert. 
     denied, 384 U.S. 963 (1966) (professional bowling); Amateur 
     Softball Ass'n of America v. United States, 467 F.2d 312 
     (10th Cir. 1972) (amateur softball). Comm. on the Judiciary, 
     H.R. Rep. No. 103-871, 103d Congress, 2d Sess. 15 n. 71 
     (1994).
     \11\ National Collegiate Athletic Ass'n v. Board of Regents 
     of University of Oklahoma, 468 U.S. 85 (1984).
     \12\ National Collegiate Athletic Ass'n. v. Board of Regents 
     of University of Oklahoma, 468 U.S. 85 (1984); Los Angeles 
     Mem. Coliseum Comm'n v. National Football League, 726 F.2d 
     1381 (9th Cir. 1984), cert. denied, sub. nom. National 
     Football League v. Oakland Raiders, 469 U.S. 990 (1984).
     \13\ The proposed legislation addresses both the minor league 
     and franchise relocation issues, stating that nothing in the 
     proposed legislation shall be construed to affect the 
     applicability or non-applicability of the antitrust laws to 
     minor league or franchise relocation issues. The legislation 
     also would not affect the application of the Sports 
     Broadcasting Act of 1961.
     \14\ Apex Hoisery v. Leader, 310 U.S. 469 (1940); United 
     States v. Hutcheson, 312 U.S. 219 (1941); Allen Bradley Co. 
     v. Local Union No. 3, IBEW, 325 U.S. 797 (1945); United Mine 
     Workers v. Pennington, 381 U.S. 657 (1965); Local Union No. 
     189, Amalgamated Meat Cutters v. Jewel Tea Co., 381 U.S. 676 
     (1965); Connell Constr. Co. v. Plumbers & Steamfitters Local 
     100, 421 U.S. 616 (1975).
     \15\ Mackey v. National Football League, 543 F.2d 606 (8th 
     Cir. 1976), cert. dismissed, 434 U.S. 801 (1977); McCourt v. 
     California Sports, Inc., 600 F.2d 1193 (6th Cir. 1979); 
     Bridgeman v. National Basketball Ass'n, 675 F. Supp. 960 
     (D.N.J. 1987); Powell v. National Football League, 930 F.2d 
     1293 (8th Cir. 1989(, cert. denied, 498 U.S. 1040 (1991); 
     Brown v. Pro Football, Inc., 782 F. Supp. 125 (D.D.C. 1991); 
     appeals docketed, Nos. 93-7165, 94-7071 (D.D.C. Sept. 27, 
     1993, Mar. 31, 1994); National Basketball Ass'n v. Williams, 
     857 F. Supp. 1069, 1071 (S.D.N.Y. 1994), aff'd, 1995 U.S. 
     App. Lexis 1531 (2d Cir. Jan. 24, 1995).
     \16\ On February 15, 1995, Kevin J. Arquit, an attorney 
     representing the Major League Baseball Players Association, 
     testified before the Senate Subcommittee on Antitrust, 
     Business Rights and Competition that ``efforts by owners 
     unilaterally to impose new conditions would not be protected 
     by the labor exemption and would be subject to antitrust 
     scrutiny if the baseball exemption were lifted.'' Statement 
     of Kevin J. Arquit, at 8.
     That same day, Major League Baseball Players Association 
     executive director Donald Fehr testified that the provision 
     of proposed S. 415 which states that the non-statutory labor 
     exemption shall not apply to unilaterally imposed terms which 
     differ substantially from the provisions of the basic 
     agreement which expired on December 31, 1993 is ``no more 
     than a restatement of current law.'' Statement of Donald 
     Fehr, at 10.
     \17\ For example, on February 15, 1995, the baseball's 
     owners' attorney James Rill testified before the Senate 
     Subcommittee on Antitrust, Business Rights and Competition 
     that, ``[t]he National Labor Relations Act governs the 
     relationship between teams and players . . . Thus, the 
     elimination of baseball's

[[Page S8994]]

     antitrust exemption would have no effect on matters involving 
     major league players' salaries or working conditions, the 
     subjects of the current strike, now or in the future, so long 
     as the players remain unionized'' (p. 10).
     That same day, acting baseball commissioner Allan Selig 
     testified that, ``because the Union would not bargain 
     collectively with us on the overriding issue of the players' 
     salaries . . . we have not been able to reach an agreement . 
     . . [W]e will play the 1995 season, including spring 
     training, with those players who want to come to work . . . 
     None of that has a scintilla to do with the antitrust laws or 
     the antitrust exemption enjoyed by Baseball. Our relationship 
     with the players is governed by the federal labor laws'' (pp. 
     3-4).
  Mr. LEAHY. Mr. President, I note that the distinguished Senator from 
Ohio is on the floor.
  I yield the floor.
  Mr. DeWINE. Mr. President, I ask unanimous consent to proceed as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________