The Case for Baseball's Special Antitrust Immunity

Abstract

In this article, the author argues that if one assumes that the public interest equates with maximizing consumer utility, then baseball's historic judicially-created antitrust immunity is in the public interest. Despite Major League Baseball's natural monopoly market power, applying anticonspiracy principles to this inherently wholly-integrated business would produce a form of irrational, ad hoc regulation by judges and juries that would create inefficiency and uncertainty without on balance enhancing consumer welfare. For base-ball's minor leagues, applying antitrust laws would most likely lead to the elimination of many teams and the concentration of those remaining in fewer areas. Given that the minor league product is consumed by entire communities instead of only by those who buy tickets, this would significantly diminish consumer welfare. Thus, the public interest is best served by maintaining baseball's antitrust “exemption.”