The Big Leagues Go to Washington

The Big Leagues Go to Washington: Congress and Sports Antitrust, 1951-1989

DAVID GEORGE SURDAM
Copyright Date: 2015
Pages: 344
https://www.jstor.org/stable/10.5406/j.ctt13x1m2r
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  • Book Info
    The Big Leagues Go to Washington
    Book Description:

    Between 1951 and 1989, Congress held a series of hearings to investigate the antitrust aspects of professional sports leagues. Among the concerns: ownership control of players, restrictions on new franchises, territorial protection, and other cartel-like behaviors. In The Big Leagues Go to Washington , David Surdam chronicles the key issues that arose during the hearings and the ways opposing sides used economic data and theory to define what was right, what was feasible, and what was advantageous to one party or another. As Surdam shows, the hearings affected matters as fundamental to the modern game as broadcasting rights, player drafts and unions, league mergers, and the dominance of the New York Yankees. He also charts how lawmakers from the West and South pressed for the relocation of ailing franchises to their states and the ways savvy owners dodged congressional interference when they could and adapted to it when necessary.

    eISBN: 978-0-252-09712-6
    Subjects: Business, History, Law

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Acknowledgments
    (pp. vii-x)
  4. Introduction
    (pp. 1-6)

    Professional team sports were very different in 1951 compared with modern sports. Major League Baseball (MLB) was ensconced as the “National Pastime,” while the National Football League (NFL) had recently emerged from a bitter struggle with the rival All-America Football Conference (AAFC). The National Basketball Association (NBA), to those few Americans who cared, was instability exemplified, and its product was all too often a rough and tumble contest devoid of the fluidity and grace, much less the excitement, that would later amaze fans.

    All athletes labored under the firm, almost totalitarian, reign of the owners. Baseball and football owners staged...

  5. 1 A Brief History of Professional Team Sports
    (pp. 7-22)

    An understanding of the history of professional team sports helps place the issues covered in the hearings in the proper context. Player and owner relationships had long been contentious, because the owners held and exploited disproportionate power. The owners’ struggles with each other and rival groups were every bit as competitive and cutthroat as those on the playing fields or courts.

    Major League Baseball (MLB) established many of the institutions copied by the younger leagues. Baseball owners sought to keep player salaries low and to create price setting, monopoly power by stabilizing league membership. When they succeeded in establishing these...

  6. 2 Economics of Antitrust
    (pp. 23-41)

    What is antitrust, and why do we care? How does antitrust law affect professional team sports?

    In the late 1800s, Americans worried about the growing concentration of power in the hands of a few producers. Standard Oil, American Tobacco, and other large firms consolidated their holds over industries by merging and acquiring other companies. Other industrial leaders sought to fix prices above those obtained under competition. The Sherman Act, enacted in 1890, states in part:

    Section 1: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or...

  7. 3 An Overview of the Hearings
    (pp. 42-51)

    In the wake of player unrest after World War II and growing demand for new baseball franchises, Congress decided to investigate MLB. When baseball players chafed under the owners’ control, with a few filing lawsuits in the wake of the Mexican League raids, Emanuel Celler (N.Y.), chair of the House Subcommittee on Anti-trust and Monopoly, decided to investigate the industry that claimed to be self-regulated.¹ Other committee participants, such as Edwin Johnson and A.S. Herlong had ties with minor league baseball.

    For the first hearings on MLB in 1951, Celler told reporters that the committee’s purpose was to “help baseball...

  8. 4 Player Rights 1951 and 1957
    (pp. 52-74)

    Throughout the congressional hearings, legislators queried owners, commissioners, players, and others about players’ rights. The issue permeated almost every hearing. Team owners in other sports instituted reserve clauses similar to the National League’s reserve clause that evolved from 1879. Although baseball held drafts of minor league players, basketball, football, and hockey owners developed player drafts of collegians and graduating high school seniors. The amateur drafts not only reduced a player’s bargaining leverage but denied them their rights to decide where and for whom to play. When Congress began examining labor practices in professional team sports, the owners justified these violations...

  9. 5 Closing the Last vestige of a “Free Market” in Labor 1964
    (pp. 75-86)

    During the postwar era, baseball officials and players often mentioned free agents. Unlike the free agents of our era, however, these players were talented amateur players. Indeed, high school and college players constituted the remaining vestige of a free market for baseball labor during the postwar era. Until an amateur signed a contract in organized baseball, he could negotiate with any team, because there was no draft. Baseball owners would be better off collectively by creating “single-buyer” bidding for amateurs via a draft. However, some owners, pursuing self-interest, opposed such a draft; there was internal tension between owners within the...

  10. 6 Should Antitrust Apply to Sports? 1957 and 1958
    (pp. 87-100)

    The congressional hearings frequently concentrated on a single topic, such as television blackouts or a merger, but some hearings, such as those of 1957 and 1958, were of a more general nature: should basketball, football, and hockey be given a broad antitrust exemption similar to that of baseball? This chapter examines these issues.

    Legislators and sports officials recognized that the professional sports leagues’ different statuses under the antitrust laws were anomalous. Legislators considered either granting basketball, football, and hockey the same antitrust exemption afforded baseball or stripping baseball of its antitrust exemption. Some legislators favored a course of granting antitrust...

  11. 7 We Want More Baseball and Football 1959 and 1960
    (pp. 101-118)

    The professional team sports leagues’ experiences during the 1950s occurred during a period of population shifts in the United States. Cities were growing rapidly in the southern and western regions. Legislators on the committee and those who dropped by to testify sought to obtain professional sports team franchises for their constituents. If the legislators could not induce an existing team to relocate, they could try to persuade owners to expand or induce a group of prospective owners to form a new league. Incumbent owners were lukewarm about expansion and hostile towards new leagues. Legislators, therefore, keenly questioned owners and their...

  12. 8 Damn Yankees and Relocations 1964 and 1965
    (pp. 119-131)

    Legislators always had something to complain about with regard to professional team sports. If they could have figured out a way to do so, they might have mandated that the Washington Senators field a respectable team. Legislators had two main concerns throughout the series of hearings: to procure teams for their constituents while avoiding losing teams via relocation.

    The legislators’ concerns were imbued with an element of reality, at least. Cities with multiple MLB teams usually had one team that was struggling, and legislators held a different attitude to such teams relocating than they would with regard to later relocations...

  13. 9 Professional Sports Team Community Protection Acts 1982 and 1984–1985
    (pp. 132-146)

    Owners sometimes sought better venues for their franchises. Usually such relocations benefit not just the individual owner but all of the owners. The Boston Braves relocation to Milwaukee proved a godsend to the struggling franchise and enriched fellow National League teams with much larger visitors’ shares. In some cases, though, an owner’s wandering eye might have run afoul of his/her fellow owners’ interests. If the public viewed a relocation as too opportunistic (relative to the attendance and revenue gains), a public backlash could develop. Al Davis’s relocation of his Raiders is a case in point. Legislators and the public began...

  14. 10 Professional Sports Teams Grapple with Radio and Television
    (pp. 147-163)

    Changes in technology affected professional team sports. Baseball and football had previously adjusted to the realities of cheap newsprint, radio, and electric lights. MLB and the NFL might have needed to handle the newest kid on the technology block — television — in the early 1940s. The technology was available prior to the war, but the conflict delayed television’s diffusion for several years.

    Television, as with radio earlier, befuddled the owners. They wanted to be left alone to devise their own television policies. Owners discovered, however, that congressional members believed the public had an interest in when, where, and how games were...

  15. 11 Baseball and Broadcasting 1953
    (pp. 164-177)

    Intertwined with baseball owners’ fears of adverse effects upon their gate receipts from broadcasting and televising MLB games was their concern over their supply of minor league players. The NFL was not too concerned about the effects of their telecasts upon college football, although they professed as much. NFL owners relied on collegiate football to generate well-known, gifted players, but baseball owners did not depend on this source.

    By owning or controlling minor league teams, big-league owners practiced a form of “vertical integration” similar to an automobile manufacturer who purchased a tire manufacturer. Congressional investigators were interested in MLB’s control...

  16. 12 The NFL’S Big Television Score 1961
    (pp. 178-185)

    The NFL did not pioneer national television contracts. The NBA and then the AFL already had such deals, before the NFL negotiated its contract with CBS. Uncomfortably for the NFL, it was the sole league called before a congressional subcommittee on antitrust to defend its national television contract.

    Although the hearings pertaining to “Telecasting of Professional Sports Contests” occurred at the behest of the NFL, the bills, H.R. 8757 and S.2427, covered the four major professional team sports. The Senate bill contained a proviso protecting college and high school games. The bills only applied to telecasts and not to pay...

  17. 13 Television Blackout Hearings 1972–1977
    (pp. 186-203)

    With their 1961 antitrust exemption (Public Law 87-331) granted for negotiating a national television contract, NFL owners continued to blackout telecasts of local games within the home team’s territory. In practice, NFL owners chose to blackout telecasts from stations outside the stipulated seventy-five-mile radius if their telecasts penetrated the radius, so stations more than one hundred miles away could telecast home games.

    Some stations attempted to mitigate the blackout by reducing their transmitting power during telecasts to avoid penetrating the seventy-five-mile radius, while still allowing fans just outside the zone to enjoy the game. The FCC took a dim view...

  18. 14 The Future Arrives Via Cable Television 1989
    (pp. 204-209)

    Long anticipated and feared, cable television began to realize its promise during the 1980s, as it became available throughout the country. Similar to television’s diffusion, cable did not spread uniformly, and many parts of the country would not receive service for years to come.¹

    Because the technology evolved so rapidly, congressional and FCC attempts to regulate the industry often proved clumsy. NFL commissioner Paul Tagliabue, who had recently replaced the retired Pete Rozelle, told a Senate subcommittee investigating cable television, “it is impossible to predict with certainty what television patterns will be like 10 or 20 years from now. Technology...

  19. 15 Can’t We All Get Along? 1966
    (pp. 210-222)

    NFL owners had successfully resisted the All-America Football Conference in the late 1940s, although the established league absorbed three AAFC teams into its ranks. The NFL monopolized professional football for the next decade. With the changing patterns of population growth in the United States, cities outside the northeast quadrant of the country lobbied for teams. The dual Texas cities of Dallas and Houston, especially, loomed large in talk of expansion. The NFL owners, however, were sufficiently attuned to the political desires of legislators throughout the country, whose constituents wanted NFL or similar football. NFL owners had endured antitrust lawsuits throughout...

  20. 16 The Proposed NBA/ABA Merger 1971–1972
    (pp. 223-238)

    A merger between the only two firms in an industry would typically be considered an antitrust violation. When owners wanted to merge two sports leagues, they should have borne the burden of proof in satisfying antitrust authorities.

    The ABA sought to merge with the NBA. The upstart league began play in 1967–1968 and was comprised of a colorful if volatile collection of teams and players. The league introduced the three-point shot and used a tri-colored ball. Yale Law School lawyers analyzed the proposed merger, comparing it with the professional football merger: “the concerted action produces efficiencies which arguably outweigh...

  21. CONCLUSION: A Look Back at The Hearings
    (pp. 239-240)

    On the whole, professional team sports owners did rather well in the aftermath of the hearings. Legislators rarely granted explicit antitrust protections (the NFL’s national television contract and merger agreement being the outstanding gains), as the committees proved relatively conservative. They did not repudiate the reserve clause, the reverse-order draft, or territorial protection, despite their qualms regarding these institutions. Legislators’ refusal to radically reshape professional team sports proved beneficial for the owners. During the hearings covered in this book, the owners’ general prerogatives survived essentially intact, although free agency of some sort was imminent in all sports by 1976.

    Owners...

  22. APPENDIX: Tables
    (pp. 241-248)
  23. Notes
    (pp. 249-292)
  24. Bibliography
    (pp. 293-300)
  25. Index
    (pp. 301-314)
  26. Back Matter
    (pp. 315-318)