For decades, the lords of big-league baseball scrambled to protect their antitrust exemption, warning that the professional game would fall apart if the owners could not conspire against free markets to run it their way. Most of all, they wanted to protect the reserve clause, under which a player was bound to one club as long as that club wanted him rather than permitted to sell his services to the highest bidder.
For a long time, critics have dismissed these notions as farcical and self-serving. After all, modern baseball, dominated by a bossy players’ union and bereft of the management controls it once had, is more lucrative than ever, a multibillion-dollar carnival. It’s easy to mock the owners who fought so long and hard against the creeping changes of the modern world.
Stuart Banner, professor of law at UCLA, performs a signal service for scholars and serious fans with this thorough exploration of baseball’s intersection of business and law. And Banner treats his material in a dispassionate, scholarly manner, while bringing to his work an unusually (and amusingly) keen understanding of human nature.
He starts us off way back in 1879, with the establishment of a reserve clause in the National League, a measure designed—as league president William Hulbert put it, with the blunt honesty permitted in those times—to “prevent unhealthy competition.” Competition had indeed proved unhealthy for Hulbert and his fellow owners, as salaries outstripped profit margins. The reserve clause proved to be an effective tool in suppressing pay, controlling player movement, enhancing the value of franchises, building fan loyalty in their local clubs, and effectively keeping a lid on the behavior of the truculent young men in the game.
Of course, from the start, critics—including such wily 19th-century players as John M. Ward, a graduate of Columbia Law School—recognized that the reserve clause was a variant of slavery, forcing a man to be “owned” by a club and blocking his opportunities to be better paid elsewhere. Thus began a long series of courtroom battles over the reserve clause and, after the Sherman Antitrust Act of 1890, over whether organized baseball was a monopolistic conspiracy. Banner takes us methodically through these court battles, including such landmark cases as the 1922 Supreme Court ruling that baseball was exempt from the Sherman Act and Flood v. Kuhn (1972), under which baseball was declared exempt even from state antitrust laws. Some of the legal language, frankly, became tedious to this nonlawyer; but Banner is superb in explaining the context of rulings.
The 1922 case, for example, was not as bizarre as modern critics have made it out to be; in fact, the Court was following a widely accepted view of law at the time. It was the changing understanding of antitrust law that made the ruling seem increasingly outmoded. And it is fascinating, too, to rediscover the fact that Curt Flood—often regarded as the fearless progenitor of modern baseball—lost big-time in court.
Banner offers a portrait of Washington politicians falling over each other to look like saviors of the game in the early 1950s, as baseball’s antitrust exemption seemed increasingly shaky: “Baseball is one of the finest things in American life, but it is in danger,” declared Rep. Emanuel Celler (D-N.Y.), chairman of the House Judiciary Committee, and representative of a Brooklyn district since 1923. While the Washington Senators plied him with choice box seats, the congressman wrote friendly private notes to Commissioner Happy Chandler, hired more for his Washington connections than anything.
The members of the subcommittee are seriously concerned with the possibility that private litigation involving the reserve clause may have disastrous consequences on a great American tradition.
All the same, Congress did nothing but pose, pontificate, and produce a report. In the end, baseball’s management powers fell not because of the courts so much as a catastrophic decision to submit labor disputes to binding arbitration. That is how free-agency was foisted on the game, largely eviscerating the reserve clause and vastly enhancing the clout of the players’ union, even as baseball still retains its antitrust exemption.
It is beyond Banner’s purview to consider such a matter, but one cannot help wondering: Were those owners and politicians right all along? Was the reserve clause the key to the game’s integrity? Baseball in the free-agency era generates immense amounts of money, with staggering contracts going to players, advertising infesting every corner of the game, and ticket and parking prices in the stratosphere, freezing out many middle-class families.