Back to Business – Broadening The Scope Of The “Business of Baseball” Exemption To Federal Antitrust Law, Published in Professional Sports and the Law

In an article published on September 2 in Professional Sports and the Law, Segal McCambridge Senior Associate William Gray discusses the controversy over the fairness of the “Business of Baseball” exemption in the case of Cangrejeros de Santurce Baseball Club, LLC v Liga de Béisbol Profesional de Puerto Rico, Inc. The dispute was raised surrounding unsuitable conditions of the Hiram Bithorn Stadium, which hosts the plaintiff’s home games, and issues related to the baseball franchise’s threat of relocation. The league responded to the comments of relocation by removing the franchise operator from the league board and with counter threats to revoke the investor-operator agreement, which led to litigation.

Gray notes that, “…this landmark decision stands in further support of Baseball’s exclusive exemption to federal antitrust regulation by expanding the scope of its application, marking yet another victory for America’s national pastime. In this regard, the Court of Appeals elected to analyze defendant’s conduct under the ‘central to’ test where the Court must determine whether or not the alleged conduct is ‘central to’ organizing and operating a baseball league, and thus, constituting the ‘Business of Baseball.’”

As an attorney with a focus on sports and entertainment law, Gray examines this case from an antitrust and fair competition cause of action angle in the article. He discusses the Federal Rule of Civil Procedure arguments made, jurisdiction challenges, the Sherman Antitrust Act, the Supremacy Clause Doctrine, previous legal precedents, MLB and MLB affiliate implications, the Commerce Clause, and Puerto Rico law claims.

Gray explains, “…the Court of Appeals held that owners of professional baseball franchises have been fundamental figures in the development of professional baseball precisely because of their decision about which players to hire and what team to field. As such, the Court reasoned that a professional baseball league’s rule, bylaws or decision regarding who may operate one of the teams in the League falls squarely within the scope of the ‘Business of Baseball’ exemption.”

Read the story in full, click here (subscriber-based).