BASEBALL'S EXEMPT STATUS

In the United States, professional baseball has had a hallowed position. It has been glorified by the fans and public at large, and protected by the Congress and the Courts. Yet, it has a dark side, too. It has survived strikes, scandals, the Great Depression, and two world wars. In more recent years, players and owners have been embroiled in a contract dispute. Baseball has suffered a serious blow to its reputation because both players and owners seem to be motivated by greed. Baseball will no doubt survive this latest challenge, but the effects of baseball's exempt status will have profound effects for years to come.

What follows is a discussion of the historical background of baseball's exempt status and of the reserve clause. Discussion then turns to the watershed year 1976, in which the Major League Baseball Players Association successfully eliminated the reserve system, and thereby re-defined baseball owners' assertion of baseball's exempt status.

Exempt status refers to baseball owners' claims that they are exempt from antitrust laws. (Their rationale is explained in the ensuing pages.) The reserve clause refers actually to the renewal clause in players' contracts. This clause allows the team to renew the player's contract for the next season at a salary fixed by the club, within certain restrictions. According to Hill and Spellman, "once a player was signed by a club, his services bec

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preme Court found for the defendant, stating that professional baseball players were not within the scope of the anti-trust laws. The Court's reasoning was that baseball is an exhibition and is not trade or commerce in the commonly accepted use of the words. The Court maintained that, even though free persons were required to cross state lines and to arrange pay for the same, it does not change the character of the business, which is giving exhibitions for money. The Court also concluded that the contracts that players signed were a mechanism by which clubs could be assured of players' keeping their commitments to the club. The decision set a precedent by which all rulings in the matter of baseball monopolies, as well as players' contracts and team status, would be decided during the next 40 years. In 1953, another important case came before the Supreme Court: Toolson vs. New York Yankees (Toolson 356). This case was an attempt by players to have the Court reverse the decision that it had made in the Federal Baseball case. Again, the Court refused to rule that the baseball leagues were in violation of the Sherman Act, referring to the earlier decision. However, this time the Court gave a new interpretation, in which it s
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Approximate Word count = 2035
Approximate Pages = 8 (250 words per page)