This morning, and without comment, the U.S. Supreme Court put an end to a years-long legal battle over San Jose’s ability to lure the A’s with the promise of playing in something other than an ancient stadium named after the shortened URL for a discount retail website.
More than 90 years ago — long before the A’s had even left Philadelphia for Kansas City, let alone Oakland — the Supreme Court first exempted Major League Baseball from federal antitrust law because these “exhibitions of base ball” are a “purely state affair” and therefore not governed by the Commerce Clause of the Constitution.
Later courts acknowledged that this is a wrongheaded interpretation of the financial operation of MLB, but decided that since Congress had allowed the league to create laws that would revoke pro ball’s antitrust exemption, that it should continue.
According to the MLB constitution, teams must play their home games within a designated operating territory. For markets where there is only one team, that may provide some flexibility, but with two MLB teams in the San Francisco Bay Area, it puts limits on where either can operate.
The A’s want to get out of O.co stadium and south to San Jose (not far from where the NFL’s San Francisco 49ers recently relocated), but that city falls within the San Francisco Giants’ territory. A move there would require at least three quarters of MLB clubs to sign off.
Rather than move for a quick vote among the owners, in 2009 the league instead formed at “special Relocation Committee” that apparently didn’t do much. After several years of waiting and sitting on land that couldn’t be developed without the league’s okay, the city of San Jose sued the office of the MLB Commissioner, alleging violations of state and federal antitrust laws.
They alleged that the long delay caused by the Relocation Committee was attempt by the league to preserve the Giants’ local monopoly. A U.S. District Court, citing the long-held antitrust exemption for MLB, dismissed most of the claims against MLB, but San Jose appealed, arguing that this exemption doesn’t apply to antitrust claims relating to franchise relocation.
But in early 2015, the Ninth Circuit Court of Appeals came down against the city’s effort to bring an antitrust claim against MLB.
In a 3-0 opinion [PDF], the Ninth Circuit notes that earlier Supreme Court precedent clearly extends antitrust exemption to the “business of providing public baseball games for profit between clubs of professional baseball players.”
Thus, according to the appeals panel, it is “undisputed” that the issue of franchise relocation is directly related to the business of exempt business of professional baseball.
“The designation of franchises to particular geographic territories is the league’s basic organizing principle,” reads the opinion. “Limitations on franchise relocation are designed to ensure access to baseball games for a broad range of markets and to safeguard the profitability—and thus viability—of each ball club. Interfering with franchise relocation rules therefore indisputably interferes with the public exhibition of professional baseball.”
For now, the A’s will remain at O.co, where they have a lease for almost another decade (with an option to move out in a few more years).
by Chris Morran via Consumerist
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