The Baseball Trust: A History of Baseball’s Antitrust Exemption by Stuart Banner (review)

During the 1960s, with the creation of the Super Bowl and the merger of the National Football and American Football League, football clearly surpassed the “national pastime” of baseball as the country’s most popular and profitable professional sport. However, despite the changes to professional sports brought about by jet travel and ubiquitous media coverage, baseball has the unique distinction of exemption from federal antitrust laws. Stuart Banner, a law professor from the University of California, Los Angeles, has traced the long and, sometime, tortured paths of legislation and court decisions that date back to the very beginnings of professional sports in the 19^th century and the era of trust busting.

Banner traces the combination of ruthless competition and owners’ self-interest that created the modern Major League, telling a story not very different from other corporate consolidations during the Gilded Age. Over time, the two major leagues, the National League (founded in 1876) and the American League (founded in 1901), consolidated their dominance over all competing teams and leagues in apparent contradiction to the spirit and the letter of antitrust law. However, the “baseball trust” was able to avoid the most onerous restriction of the growing antitrust movement that was directed at Standard Oil and the other giants of the era. Banner attempts to answer the question of why baseball was treated differently from other businesses. He does so by dismissing the common explanation that baseball’s cultural status as the “national pastime” is at the root of this distinction of law.

Instead, he argues that the exemption is the result of sophisticated business and legal tactics by Major League baseball practiced over nearly a century. From the owners’ perspective, the profitability of their sport depended on the “reserve clause.” This unique feature of baseball contracts was introduced in the 1880s, despite vigorous opposition from players. Owners insisted that they continued to hold or “reserve” the rights to a player even after his contract expired. Players were left with little alternative but to renew their contracts with their ball club at terms favorable to the owner. This oddity of contract law was upheld in a 1922 Supreme Court ruling that exempted baseball from federal anti-trust laws. Despite efforts by disgruntled players and by renegade owners, no court challenge to this power of the Major Leagues proved successful. Political leaders in states and districts with Major Leagues teams also worried about offending local club owners who might threaten to relocate to another city. Politicians showed little enthusiasm for regulating baseball, fearing fans might hold a grudge at the ballot box.

Banner also includes efforts by players to shape the business rules of the game, including John Montgomery Ward, the baseball player turned lawyer who attempted to create the “Player’s League” in 1890, and St. Louis Cardinals outfielder Curt Flood, who unsuccessfully challenged the reserve clause in the Supreme Court case Flood v. Kuhn (1972). Overall, The Baseball Trust is impeccably researched and a valuable history of the politics, law and business of professional sports.