Saturday, August 13, 2022

MLB commissioner Rob Manfred defends antitrust exemption in 17-page response to Senate Judiciary Committee

Major League Baseball commissioner Rob Manfred has sent a 17-page letter to the U.S. Senate Judiciary Committee in which he defends MLB‘s partial antitrust exemption. 

The Committee recently requested that Manfred explain the league’s need for the antitrust exemption, which has been in place in varying forms since 1922 when the Supreme Court ruled that MLB was exempted from the Sherman Antitrust Act. The Senate’s latest inquiry into the exemption stems at least in part from MLB’s decision to contract the number of affiliated franchises in the minor leagues. 

Last December, four of those de-affiliated teams filed a lawsuit in U.S. District Court alleging the commissioner’s office had violated the Sherman Act. As well, the antitrust exemption has also come under scrutiny because of the wages paid to minor-league players. 

In Manfred’s letter, he in part addressed assertions by the non-profit Advocates for Minor Leaguers in which they argued the antitrust exemption worsens the working conditions of minor-league players. In his letter, Manfred writes: 

“We respectfully submit that the opposite is true — the baseball antitrust exemption has meaningfully improved the lives of Minor League players, including their terms and conditions of employment, and has enabled the operators of Minor League affiliates to offer professional baseball in certain communities that otherwise could not economically support a professional baseball team.”

Elsewhere, the commissioner posits: 

“Minor League players could be forced to engage in individual negotiations for health, pension, housing and meal benefits that likely would result in many (or even most) Minor League players receiving fewer benefits than MLB currently requires.”

He also directly addressed the claims of Advocates for Minor Leaguers: 

“… Advocates is mistaken when it claims that all Minor League players would receive higher compensation and better benefits if compensation was determined based on ‘free market principles.’ On the contrary, under such a system, the top prospects – a relatively small number of players who already currently receive the largest signing bonuses – may do better. But the much larger number of non-prospect players likely would do worse. The truth is, the supply of aspiring professional baseball players significantly exceeds the demand by Major League Clubs for players to fill out their Minor League rosters.”

Advocates for Minor Leaguers previously submitted a letter to the Senate Judiciary Committee in which executive director Harry Marino claimed the antitrust exemption negatively affected minor-league players in a number of ways — salary being the most obvious example. 

In recent years, MLB successfully lobbied congress to pass the Save America’s Pastime Act, a measure that exempted minor-league players from federal laws concerning minimum wage and overtime pay. Manfred himself recently disputed the notion that minor-league players are not paid a living wage, albeit without providing any supporting evidence for his claim. 

In response to Manfred’s Friday letter, Marino released the following statement: 

“When it comes to the impact of baseball’s antitrust exemption on Minor League players and fans, Major League Baseball cannot get its story straight. 

Just nine days ago, Commissioner Rob Manfred said: ‘I can’t think of a place where the exemption is really meaningful, other than franchise relocation.’

This morning, Manfred said the opposite, claiming that the baseball exemption ‘has meaningfully improved the lives of Minor League players, including their terms and conditions of employment, and has enabled the operators of Minor League affiliates to offer professional baseball in certain communities that otherwise could not economically support a professional baseball team.’

Simply put, both of these statements cannot be true. 

Given that MLB continues to pay most Minor League players poverty-level wages and recently eliminated 40 Minor League teams, the positions it has taken today are surprising — to say the very least. We intend to thoroughly review the many claims set forth in today’s 17-page letter and will respond substantively in the days to come.”

As well, Penn State law professor Stephen Ross last year told Evan Drellich of The Athletic, that MLB’s minor-league salary system would likely be deemed illegal in the absence of their antitrust exemption. 

As for the matter of franchise stability in the minor leagues, Manfred argued that the exemption is essential to it. He writes: 

“Such a system almost certainly would not be sustainable in many communities but for the centralized governance and coordination that MLB currently is able to provide under the baseball exemption.” 

More from Manfred on this subject: 

“If left solely to the individual decisions of the MLB Clubs, some may choose to maintain fewer than four affiliates, and some may not keep certain affiliates in their existing communities.”

Elsewhere in his letter, Manfred argued that the existing exemption is also key to franchise stability at the big-league level — i.e., the relative rarity of franchise relocations when compared to other major professional sports leagues. 

Manfred’s letter is prelude to a likely Senate hearing on the issue of MLB’s antitrust exemption, which could happen as soon as early fall of this year. 

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