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Senate Judiciary Committee is questioning the legality of Major League Baseball’s antitrust exemption

The Senate Judiciary Committee is questioning the legality of Major League Baseball’s antitrust exemption and on Tuesday released a letter to minor league supporters asking about its impact on players’ lives.

The letter is a bipartisan effort led by Senators Dick Durbin (D-Illinois), Chuck Grassley (R-Iowa), Richard Blumenthal (D-Conn.), and Mike Lee (Utah). The Judiciary Committee letter represents the first significant step taken by the federal government to challenge the legality of MLB’s antitrust exemption.

“We are writing to obtain information on how baseball’s antitrust exemption will affect competition in the minor league job market and the operations of minor league teams,” the letter reads.

Questions in the letter include: What is the impact of the antitrust exemption on the incidence of closures and business disruptions at the MLB level? What role does the antitrust exemption play in requiring all small players to sign a standard player contract? And how does the removal of the antitrust exception affect secondary terms and conditions? It also asks about the extent of corruption and abuse in the market in relation to international prospects and whether the antitrust exemption has played any role in enabling these signature practices.

The letter represents the broadest federal challenge to MLB’s antitrust exemption. The case has gone before the Supreme Court twice since 1922 (1953 and 1972), and the 2017 challenge by the US Ninth Circuit Circuit failed.

“We need to examine how Major League Baseball’s 100-year-old antitrust exemption affects the functioning of minor league baseball teams and the ability of minor league ball players to make a decent living,” Durbin wrote. “This bipartisan information request will help update the committee on the implications of this exemption, particularly when it comes to the minor league and international prospects. We have to make sure that all professional footballers play under fair and equal conditions.”

Grassley wrote: “This is about ensuring the standard of play for the minor leagues and their players. MLB’s special antitrust exemption should not impose any business or downturn problems on minor league teams and players. Baseball is America’s pastime and it means more than just the major leagues.”

Banning MLB’s antitrust exemption would fundamentally change the business of baseball in America.

A uniform player contract signed by each junior player states that teams control player rights for up to seven years in minor tournaments and seven years in major tournaments. If an underage player decides to stop playing the sport in minors or majors prior to seven years, the team owns the player’s rights due to antitrust exemption and cannot play the sport professionally elsewhere unless he is exempted from his contract .

“Minor league players are the group most affected by the baseball exemption,” said Harry Marino, director of the minor league Defenders team. “MLB owners shouldn’t have a special license to pay their workers cheaply. We are confident that through this process, Congress will equally recognize and eventually repeal baseball’s antitrust exemption with respect to matters involving minor league players.”

Of the four major sports in America, baseball is the only sport exempt from antitrust laws. MLB has operated under antitrust exemptions since 1922, after the Supreme Court ruled the league could suppress wages and make business decisions that operated outside of antitrust rules.

Because of the antitrust exception, baseball players who sign the uniformed player contract cannot ask for better pay elsewhere. In 2022, young retirees will have annual salaries ranging from $4,800 to $15,400. The US poverty guideline for a single person in most states in 2022 is $13,590.

The federal government previously threatened the MLB with a special antitrust exemption. In March 2022, Durbin tweeted That “it’s time to reconsider MLB’s antitrust exemption, which allows them to operate as a legal monopoly.”

Senator Lee, a member of the Judiciary Committee, introduced a bill called the Competition Act in Professional Baseball, which three other Republicans on the committee supported, including Ted Cruz of Texas, Josh Hawley of Missouri and Marsha Blackburn of Tennessee. Introducing the bill, Lee said antitrust laws encourage competition and that competition benefits consumers by lowering prices and increasing quality.

“There’s no reason Major League Baseball should be treated any differently than any other professional sports league in America,” he told me in April 2021. Another professional sports organization.

Additionally, four minor league teams filed a lawsuit in U.S. District Court in late December, arguing that Major League Baseball’s decision to terminate these clubs’ major affiliation constituted anticompetitive behavior in violation of federal antitrust laws , which represented a collusion on the part of the MLB to eliminate the free market’s role in determining the fate of the franchise.

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