Charles Grantham 10
Last month arrived the news that the Department of Justice is examining the NFL and MLB – and one might presume other sports leagues – for potential antitrust violations in how their teams collectively sell and structure media deals.
This is the next logical step in the percolating frustration of many sports fans over their teams’ games being stretched and spread over so many outlets. Whether the pooling of media rights outside of those for broadcast television violates antitrust law is surely a review that has been a long time coming. The 1961 Sports Broadcasting Act (SBA) granted immunity for pooling broadcast deals, but made no mention, of course, of the technologies that would come later: cable, satellite and streaming.
But while the DOJ might have a fat target in the NFL, which has been fighting a consumer class action antitrust assault for over a decade on its Sunday Ticket package, MLB as a target is curious.
That’s of course because in 1922, the Supreme Court ruled quite illogically baseball is not a business and thus immune from the nation’s then young antitrust laws. Then in 1972 it upheld the 1922 case, ruling that while the exemption might be “anomalous,” it’s up to Congress to revoke it.
So is there any chance if the DOJ targets MLB, the feds would have an argument around the exemption?
There are several scenarios in which the DOJ could attack MLB for its broadcast pooling, which is only getting more pronounced with the league collecting and selling teams’ local media rights. Each scenario is very unlikely but still possible.
“The SBA specifically says baseball in it, arguably, that is redundant of baseball’s existing antitrust exemption,” said Chris Deubert, a sports attorney with Constangy, Brooks, Smith & Prophete. “And I suppose there’s an argument that if you pull away, if you were to repeal the SBA, does that intent also repeal baseball’s antitrust exemption insofar as it concerns the pooling of broadcast rights?”
The DOJ could also try to take a case to the Supreme Court challenging the exemption. Justice Brett Kavanaugh posted a comment in 2020 when the court declined to take up an appeal of the Sunday Ticket case that, “antitrust law likely does not require the NFL and its member teams to compete against each other with respect to television rights.” That is just a comment and not a binding decision, but perhaps reflective of how the high court might rule.
Jim Quinn had such a case representing several minor league clubs that were shut out of the re-organization of minor league baseball. The strategy with the case was to lose at the district court and appellate levels because of the exemption, and then have the case taken up by the high court. But MLB settled with the former MiLB clubs for eight figures before it got to that stage.
“They [MLB] were afraid that we’re going to get to the Supreme Court and overrule the exemption,” he said. “We had a decent chance of getting cert [meaning before the court], but as I said, they sent, they threw us a lot of money, and we went away.
“There’s a lot of chatter at the Supreme Court level about how you know, basically that the baseball exemption makes no sense.”
And the Trump Administration could always spearhead an effort to have Congress revoke the exemption and the SBA. Deubert doesn’t believe any of that will happen given the nation’s political dysfunction; but were it to, even then he believes leagues are safe to pool media rights under antitrust law.
“You’re complaining about fragmentation; fragmentation means there’s a lot of people participating in the market,” said Deubert. “That’s the very goal of antitrust law. People complain about the costs of streaming, and that games over here on Amazon, or maybe now on Netflix, or, you know, all these different, streaming services. That’s competition.
“But what I don’t think lawmakers or even your average commentator fully appreciates is the degree to which the SBA probably doesn’t even apply to most of the issues that people are concerned about. It’s not like if you repeal the SBA and these issues go away. The NFL would probably continue operating just literally as it does, and would defend itself on antitrust grounds and probably win.”
Quinn is of a different opinion. “Yeah I know, it’s all about choice, yada yada, yada,” he said. “The response to that is, yes, but the choice is costing these guys, is costing the consumers a lot of money.”
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