Manfred Responds to Senate Committee Inquiry Into MLB Antitrust Exemption

The MLB commissioner defended the exemption and its purpose in a 17-page letter released Friday.

NEW YORK (AP) — Major League Baseball told a Senate committee on Friday the sport’s antitrust exemption prevents teams from moving without approval and allows the sport to maintain the minor leagues at a wide level.

In addition, baseball Commissioner Rob Manfred said many terms of minor leaguers’ employment are determined by the Major League Baseball Players Association’s collective bargaining agreement with MLB.

Leaders of the Senate Judiciary Committee asked Manfred on July 18 to explain the impact of potential legislation stripping the sport’s antitrust exemption from the sport’s relationship with minor league players. Manfred said the letter “suggests that Major League Baseball’s antitrust exemption is detrimental to minor league players and that removing the exemption would improve their working conditions.”

“The opposite is true,” Manfred wrote in a 17-page response. “The baseball antitrust exemption has meaningfully improved the lives of minor league players, including their terms and conditions of employment, and has enabled the operators of minor league affiliates to offer professional baseball in certain communities that otherwise could not economically support a professional baseball team.”

Manfred said the exemption was responsible for MLB franchise location stability. Only one MLB team has changed cities since 1972, the Montreal Expos leaving Canada to become the Washington Nationals for the 2005 season.

“In that same period, 14 NBA, 10 NFL and nine NHL franchises have relocated,” he said. “MLB differs from other professional sports leagues because MLB’s antitrust exemption allows it to enforce a rigorous process that ensures club relocation is carefully considered and vetted.”

Sen. Richard Durbin, an Illinois Democrat who chairs the Judiciary Committee, and Charles Grassley, an Iowa Republican who is the ranking minority member, asked for the responses along with Sen. Richard Blumenthal, D-Connecticut, and Sen. Mike Lee, R-Utah.

Manfred said MLB supports 184 teams in 43 states, including minor league affiliates and partner leagues launched when guaranteed farm teams were cut from 160 to 120 after the 2019 season. The figure does not include teams at training complexes in Florida, Arizona and the Dominican Republic.

“Without the exemption, there would be baseball in far fewer communities, and without MLB’s substantial subsidization, the cost of attending a minor league baseball game would be significantly higher in many places,” he wrote.

MLB said it spends an average of $108,000 annually on each minor leaguer in pay and benefits and 58% of drafted minor leaguers — approximately 615 each year under the current format — receive an initial signing bonus of at least $100,000.

“Those players who do not command larger signing bonuses generally will have very short baseball careers and transition to other careers in their early 20s and are truly seasonal employees who are free to obtain other employment or continue their education during the offseason,” Manfred wrote.

He said that while Advocates for Minor Leaguers claim pay and benefits would improve in a free market, “on the contrary, under such a system, the top prospects … may do better. But the much larger number of non-prospect players likely would do worse.”

Baseball’s exemption was created by the Supreme Court in the 1922 decision Federal Baseball Club v. National League and was limited by the Curt Flood Act of 1998, which applied antitrust laws to MLB affecting the employment of major league players at the major league level.

In addition, the Sports Broadcasting Act of 1961 gave leagues permission to collectively sell broadcast rights and the Supreme Court in the 1996 case Brown v. Pro Football said there is a non-statutory exemption from antitrust law for activity governed by a collective bargaining relationship.

“The revenues of most minor league clubs are insufficient to support even the current salaries and benefits of players,” Manfred wrote. “If MLB clubs eliminated or curtailed their financial subsidy to minor league clubs and players were compensated at the minor league level by the club operators at a level commensurate with minor League revenues, minor league player salaries and benefits would be lower, not higher.”

Senators asked about the potential impact of repealing 2018 legislation exempting minor league players from federal minimum wage and overtime laws — the Save America’s Pastime Act.

MLB agreed in papers filed this month in federal court to pay minor leaguers $185 million to settle a lawsuit alleging violations of minimum wage laws. Minimum salaries for players with minor league contracts are $400 weekly at rookie ball, $500 at Class A, $600 at Double-A and $700 at Triple-A.

Top prospects receive substantial signing bonuses. Shortstop Jackson Holliday, the top pick in this year’s draft, agreed to a $8.19 million bonus with Baltimore. First-round picks last year received $1.8 million and up and each of the 73 players who signed among the top 75 selections received at least $747,500.