Arti Sahajpal

Associate Editor

Loyola University Chicago School of Law, JD 2025

Major League Baseball’s (MLB) century-long immunity from antitrust law may soon come to an end depending on the Supreme Court’s ruling in the pending Tri-City ValleyCats, Inc. v. Office of the Commissioner of Baseball. The petitioners, a pair of minor league baseball teams, are seeking to overrule years of precedent that allow the league to function as both a monopsonist (only buyer in the market) and monopolist (only seller in a market) given its unique control over the professional baseball market. While other professional sports leagues are subject to competition laws, MLB is uniquely positioned to have complete control over licensing, geographic exclusivity for teams, broadcasting, and salaries.  Unsurprisingly, MLB’s unrestricted control of the multibillion-dollar professional baseball market has raised concerns about the continued exemptions.

The legal foundations of MLB’s antitrust immunity

The debate surrounding MLB’s monopoly has deep historical roots, underscored by three pivotal legal cases that have, for more than a century, immunized the MLB from antitrust regulations.  The first, Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, came about in 1922 when a Maryland baseball club sued the National League of Professional Baseball Clubs and the American League of Professional Baseball Clubs, alleging the two leagues conspired to monopolize professional baseball in violation of the Sherman Act.  In a unanimous opinion, the Supreme Court rejected the challenge, holding that baseball leagues were not engaged in interstate commerce and thus, beyond the Sherman Act’s ambit. With that, MLB received carte blanche to engage in anti-competitive practices without hindrance.

The decision was upheld thirty-one years later in Toolson v. New York Yankees.  The subsequent case arose after a group of professional baseball players challenged the validity of reserve clauses, which prohibited players from freely switching teams. In its one-paragraph decision, the Court interpreted Congress’s inaction in the years following Federal Baseball Club as an implied indication of the legislature’s intent to maintain MLB’s exemption from the Sherman Act.

Finally, in 1972, the Court affirmed its two prior decisions in Flood v. Kuhn.  The case was raised on similar grounds as the two previous suits, with the petitioner arguing that the reserve clause preventing free agency violated antitrust laws.  Once again, the Court deferred to Congress and upheld MLB’s antitrust exemptions.  Unlike its predecessors, however, Flood did result in some changes, notwithstanding the fact that those changes took over two decades to come about. The Curt Flood Act of 1998 gave professional baseball players rights over their contracts and careers, but failed to establish any other discernable limits on MLB’s control over the professional baseball industry.

The impact of MLB affiliation loss and its benefits

In the wake of Major League Baseball’s 2020 restructuring plan, several minor league teams found themselves abruptly losing their MLB affiliations.  This restructuring initiative was designed to streamline the league’s operations and player development system, although some allege the proposal was a response to mounting legal challenges related to minor league salary structures. The restructuring plan resulted in significant consequences for the forty affected minor league franchises.  In response to these changes, the Tri-City ValleyCats and the Norwich Sea Unicorns initiated legal action to challenge the loss of their MLB affiliation. MLB affiliation is massively beneficial for a minor league team as the Player Development License obligates the Major League franchise to provide personnel (i.e., players, managers, and coaches) and to pay their salaries.  Moreover, affiliation enhances minor league viability by ensuring a consistent revenue stream through ticket sales, concessions, and licensed merchandise.

Legal claims before the Supreme Court

In their petition for certiorari, the ValleyCats and the Sea Unicorns argued that legal foundation behind MLB’s antitrust immunity must be corrected.  The petitioners emphasized the significant monetary value of professional baseball franchises, noting that MLB’s exclusive control over the market comes at the expense of consumers, the public, and professional baseball itself.  Their critique of the antitrust exemptions showed that MLB’s anti-competitive practices are unjustified and contrary to the principles of antitrust law. Highlighting that no other sports have the same immunity, the two minor league teams further explained that MLB’s multi-billion-dollar operations exert significant influence on thousands of employees, businesses that contract with MLB and its teams, and numerous local economies.

The petitioners further argued that MLB’s exclusive control over minor league affiliation is harmful to once-successful organizations who are forced to suffer massive declines in their enterprise value, especially when MLB is the only one deciding which teams make the cut.  The petition also spells out issues related to the professional baseball labor market, franchise relocation, and states’ ability to protect citizens from anticompetitive practices, urging the Supreme Court to correct over one hundred years of improvident case law.

As the Supreme Court considers the fate of MLB’s antitrust immunity, the outcome of the Tri-City ValleyCats case may well reshape the landscape of professional baseball, ensuring that it aligns more closely with the principles of antitrust law and promotes fairness, competition, and opportunity for all stakeholders in the sport.