Apr 22, 2011, 9:11 AM EST
Yesterday I noted that Major League Baseball may be wary of a fight with Frank McCourt because it has a lot of rules with respect to club ownership that exist simply because owners agree to them and that, if challenged, there are likely several that wouldn’t hold up in court. One of them — Major League Baseball’s putative right to approve who buys a team and enters the ownership club — could be seriously jeopardized in all of this.
You know how it works: a team goes on the market and the bidders line up. Before the deal is done, MLB “approves” the winning ownership group. And that group is not necessarily the highest bidder. There is much talk, however, about who Bud Selig likes and who he doesn’t, who is friends with Jerry Reinsdorf and who isn’t and that sort of thing. This is the step where Mark Cuban’s ambitions get thwarted. It’s also a step that probably violates antitrust laws and, according to the only court that has ever considered the matter, does not fall into baseball’s more-limited-than-you-think antitrust exemption.
Flash back 18 years to the case of Piazza v. Major League Baseball (831 F. Supp. 420 (E.D. Pa. 1993) for those of you who care), in which some gentlemen from Pennsylvania tried to buy the San Francisco Giants and move them to Florida. Then-Giants’ owner Bob Lurie was going to sell, but MLB stepped in and indicated that it would not approve the sale. The buyers sued, arguing (among other things) that baseball illegally restrained free trade in the market in which baseball teams are bought and sold. Baseball argued that it was allowed to do this pursuant to the antitrust exemption.
The trial court agreed with the would-be buyers during the preliminary stages of that case, ruling that the antitrust exemption didn’t apply to the purchase of teams.
Granted, this wasn’t a final decision on the merits. Rather, the court basically ruled that if the plaintiffs could prove that MLB wrongfully thwarted the sale — say, that baseball had no legitimate business basis for excluding a potential ownership group –they could win. Of course it never got that far. Having seen that its antitrust exemption was in peril, baseball settled with the plaintiffs, paying them $6 million for their trouble, and the case went away and does not now serve as any sort of binding precedent.
Since that time, baseball has continued to approve or deny “ownership applications” as though they were country club memberships as opposed to the restraint of the sale of goods in a free market. It has been able to get away with this because, to my knowledge, no current owner selling a team has challenged baseball’s ability to approve buyers — remember, they themselves got into the club through this very process — and, with no dispute, there can be no court case. Both the Cubs and the Rangers sales had the potential for this inasmuch the team sales were thrown into court, but neither instance created a situation in which the selling owner wanted to sell to A, but baseball wanted to sell to B.
So, back to the present: Frank McCourt is making serious noises about suing Major League Baseball. No matter how this all shakes out, it’s hard to see it ending in any way other than a sale of the Dodgers. As is suggested by the legal experts cited in today’s article from Bill Shaikin in the Los Angeles Times, the only way that McCourt won’t sue over the specifics of the sale is if baseball agrees to take the highest bidder. If that highest bidder isn’t someone Bud Selig wants to let in his club — say, I dunno, some skeezy businessman from some unpronounceable former Soviet Republic who is on record saying that he wants to give out the biggest free agent contracts in recorded history — Selig could have a serious dilemma on his hands: allow a potential maverick (Maverick?) into the club or risk re-litigating the Piazza case.
I want to see Frank McCourt gone and I want to see a responsible owner in Los Angeles with a minimum of fuss. But boy howdy, it would be fun to see Major League Baseball’s anti-competitive practices blown away too, so I can’t say that I, as a popcorn-eating gawker to all of this, will be disappointed either way.
- Justin Upton traded to the Padres for three prospects 57
- Bud Selig will get a $6 million a year pension. Which is obscene. 84
- Jake Peavy agrees to a two-year, $24 million deal to stay with the San Francisco Giants 13
- Matt Kemp has officially been traded to the Padres 28
- Padres acquire catcher Derek Norris from Athletics 35
- St. Petersburg City Council votes down deal to allow Rays to look for new stadium site 89
- What will the future of Cuban players in MLB look like? 25
- Royals sign Edinson Volquez for two years, $20 million 29
- Baseball’s highest-ranking Hispanic woman employee sues for discrimination (163)
- The United States will seek to normalize relations with Cuba (144)
- Cubs, Red Sox, Dodgers, Padres, Rangers, and Astros interested in Phillies’ Cole Hamels (111)
- Rays, Padres, Nationals agree to 11-player trade (97)
- Chase Headley signs a four-year deal with the Yankees worth at least $52 million. (95)