Leave Them Teams Alone

Nick Gillespie and Matt Welch have a great article in Sunday’s Washington Post on the absurdity of Congress demanding that Major League Baseball do something about steroids right now, or else. They point out that, in the first place, “Major League Baseball, along with other sports leagues and private-sector ventures, simply should not be required to submit their business plans – much less blood and urine samples – to Congress or any other government body.” And in the second place, steroids just aren’t that big a deal, much as Congress wants them to be.

Alas, Reason’s editors do trip up on one point. They write that baseball’s exemption from federal antitrust legislation should be repealed. Why? Because it “has caused more harm than good by allowing owners to collude against players and prospective competitor leagues and by allowing cartel arrangements and restraints on trade unimaginable in other industries.”

Aside from the general problems with antitrust law, the notion that baseball owners “collude” in “cartel arrangements and restraints on trade” reflects a misunderstanding of the organization of a sports league. The different teams in Major League Baseball are not competitors like Coke and Pepsi. They’re not even quite like McDonald’s franchisees, who clearly don’t compete in the way different companies do. Rather, the economic unit is MLB, which is in the business of providing baseball games for entertainment. The competition on the field is real, but the teams are not actually economic competitors. As the Supreme Court ruled in a case involving the NFL:

The NFL owners are joint venturers who produce a product, professional football, which competes with other sports and other forms of entertainment in the entertainment marketplace. Although individual NFL teams compete on the playing field, they rarely compete in the marketplace… . The league competes as a unit against other forms of entertainment.

Gillespie and Welch are more right than they know. Congress should stay entirely out of baseball’s business, including by not siccing antitrust regulators on a single economic unit often misunderstood as 30 competing businesses.