In 2022, Major League Baseball (“MLB”) posted revenue of 10 32 billion dollars, and boasted a worldwide fan base and iconic cultural status. In 1922, it was still a fedgling enterprise in ferce competition with other baseball leagues to attract fans with future Hall of Famers like Babe Ruth and Ty Cobb That same year, in Fed. Baseball Club of Baltimore v. Nat’l League of Base Ball Clubs, (“Federal Baseball Club”) Justice Holmes, writing for the Supreme Court, decided that the exhibition of major league baseball is not interstate commerce, and thus lacks the jurisdictional hook necessary for the application of federal antitrust laws, including most notably, the Sherman Antitrust Act of 1890. The court reaffrmed the exemption in 1953 in Toolson v. New York Yankees, Inc., not because of interstate commerce, but because in the court’s view, it was now a question for Congress. Finally, in Flood v. Kuhn the Supreme Court admitted that baseball was indeed interstate commerce but declined to overturn Federal Baseball Club Congress later overturned Flood in part to ensure baseball employees were covered by antitrust laws with the Curt Flood Act of 1998 (“the Flood Act”). However, the Act’s effects are not as pronounced as some proponents have hoped One commentator, for instance, has suggested that the act was a “hollow gesture” and that “[t]he language of the Curt Flood Act of 1998 and the legislative intent argue strongly for the narrowest use of antitrust laws in furtherance of the goals of major league baseball players ”. Courts have labored over the scope of the exception and the Flood Act and have come to many divergent results. In any event, the antitrust exception still applies to non-labor-related claims.
Baseball’s Antitrust Exemption in a Time of Rapid Change (Vol. 56.4)
6 Sep 2025