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An established aberration: baseball’s unique relationship with antitrust law

3/24/25

baseball

By: Cameron N. Regnery

With the Los Angeles Dodgers’ sweep of the Chicago Cubs in the Tokyo Series, the 2025 Major League Baseball season is officially underway, renewing another chapter in the storied history of our nation’s pastime. Just as the game of baseball holds a cherished placed in American sports, the business of baseball occupies a unique position in American law. In the context of antitrust—the body of law that regulates anticompetitive business practices such as monopolies, conspiracies and restraints on trade—professional baseball is a rare exception, one which has now been recognized for over a century.  

The origins of antitrust regulation are in many ways aligned with those of professional baseball. The first federal antitrust law, the Sherman Act of 1890, was passed a decade and a half after the formation of the National League. The corresponding American League was formed in 1901, just ten years prior to the Supreme Court’s landmark Standard Oil decision breaking up the Rockefeller oil monopoly.1 And Congress enacted both the Clayton Act and FTC Act in 1914, the same year that Babe Ruth made his debut with the Boston Red Sox. This parallel development of baseball’s “Major Leagues” and Congress’ antitrust legislation is not merely academic—courts have often considered the extent to which the latter imposes upon the former. 

In the 1922 Federal Baseball case,2 the Baltimore Terrapins, a club in the rival Federal League, sued the Major Leagues, arguing that they had monopolized professional baseball in violation of the Sherman Act. The Supreme Court would not consider the club’s claim, however, holding that the antitrust laws did not apply to professional baseball. The Court reasoned that Major League games were local exhibitions and “purely state affairs.” As such, the spectacle on the diamond was exempt from federal antitrust legislation—which applies only to interstate commerce. While perhaps an understandable calculus in 1922, any hometown mystique surrounding Major League Baseball had certainly disappeared by the postwar era, epitomized by the Brooklyn Dodgers’ relocation to Los Angeles in 1958.  

In light of the changing landscape of the game, a group of players again sought the protections of the Sherman Act in the 1953 Toolson case.3 Specifically, the players challenged the “reserve clauses” in their contracts, which bound them to the clubs with whom they first signed, and permitted those clubs to reassign, trade or release them at will. Some Justices acknowledged that professional baseball had become “inherently interstate,” but the Supreme Court nevertheless held that the “business of baseball” remained outside the scope of antitrust law. In so doing, the Court recognized that Major League Baseball had developed for over thirty years in reliance upon Federal Baseball and “on the understanding that it was not subject to existing antitrust legislation.” In further deference to the American pastime, even the dissenting Justices exalted the “major asset which baseball is to our Nation [and] the high place it enjoys in the hearts of our people.”4 

Without scrutiny in Toolson, professional baseball’s immunity from antitrust regulation went largely unexamined for fifty years—that is until the St. Louis Cardinals traded center fielder Curt Flood to the Philadelphia Phillies in 1969. Flood, a three-time all-star who was not consulted about the trade, sued Commissioner of Baseball Bowie Kuhn, again challenging his reserve clause as a violation of federal law. In the 1972 Flood decision,5 the Supreme Court officially recognized that Major League Baseball is a business “engaged in interstate commerce,” but nevertheless affirmed baseball’s longstanding exemption from the specter of antitrust enforcement. Delivering the opinion of the Court, Justice Harry Blackmun—nicknamed one of the two “Minnesota Twins” along with fellow Justice Warren Burger—remarked that professional baseball’s antitrust immunity is “an exception and an anomaly,” which “rests on a recognition and an acceptance of baseball’s unique characteristics and needs.”  

The Flood decision was particularly anomalous in light of Supreme Court decisions regarding other professional sports. In 1955 and 1957, respectively, the Supreme Court held that professional baseball’s exemption did not extend to professional boxing or professional football.6 In fact, just one year before the Flood ruling, the Supreme Court held that professional basketball did not enjoy any similar antitrust immunity.7 But whatever one may think of the Court’s seemingly selective pardoning of baseball, “the aberration is an established one.” And as cheekily remarked in Flood, “there is merit in consistency even though some might claim that beneath that consistency is a layer of inconsistency.”8 

The complimentary development of professional baseball and antitrust law has resulted in a sort of mutual respect between the two. Changes in one have precipitated changes in the other, some viewed as positive and some viewed as negative. For Major League Baseball, the decisions in Federal Baseball, Toolson, and Flood immunized it from monopolization challenges and from a flood of lawsuits by players unhappy with assignment and trade decisions. With this protection, Major League Baseball blossomed into the preeminent professional baseball league in the world and a staple of American sports. On the other hand, the lack of antitrust enforcement prevented the rise of rival organizations such as the Federal League and held players like Curt Flood to restrictive reserve clauses until their abolishment in 1975. 

For antitrust law, the decisions in Federal Baseball, Toolson, and Flood have spawned a unique body of “baseball jurisprudence,” in which the nation’s highest court has grappled with the application of seminal legislation to a unique industry central to American culture. In those decisions, the Court often remarked that whether baseball should be subject to antitrust regulation is a question for the American people.9 In 1998, the people spoke, and Congress enacted the Curt Flood Act, which removed Major League Baseball’s antitrust immunity in employment disputes with players.10 That said, the Act generally maintained the longstanding exemption for the rest of the “business of baseball.” 

To this day, the rulings in Federal Baseball, Toolson, and Flood remain the law of the land. And even where the American people have sought to curb Major League Baseball’s antitrust immunity, the unique exception for the “business of baseball” has been preserved. The interconnected history of professional baseball and federal antitrust law thus showcases Americans’ time-honored reverence for our national pastime. 

The commercial litigation attorneys at Freeman Mathis & Gary, LLP are well-versed in antitrust matters and have litigated complex cases brought under the Sherman and Clayton Acts in federal courts throughout the United States. 

For more information, please contact Cameron Regnery at cameron.regnery@fmglaw.com or your local FMG attorney. 

  1. Standard Oil Co. of N.J. v. United States, 221 U.S. 1 (1911). ↩︎
  2. Fed. Baseball Club of Balt., Inc. v. Nat’l League of Pro. Baseball Clubs, 259 U.S. 200 (1922). ↩︎
  3. Toolson v. N.Y. Yankees, Inc., 346 U.S. 356 (1953) (per curiam).  ↩︎
  4. Id. at 364 (Burton, J., dissenting).  ↩︎
  5. Flood v. Kuhn, 407 U.S. 258 (1972). ↩︎
  6. United States v. Int’l Boxing Club of N.Y., 348 U.S. 236 (1955); Radovich v. Nat’l Football League, 352 U.S. 445 (1957).   ↩︎
  7. Haywood v. Nat’l Basketball Ass’n, 401 U.S. 1204 (1971). ↩︎
  8. Flood, 407 U.S. at 284. ↩︎
  9. Id. at 285 (“[W]hat the Court said in Federal Baseball in 1922 and what it said in Toolson in 1953, we say again here in 1972: the remedy, if any is indicated, is for congressional, and not judicial, action.”). ↩︎
  10. 15 U.S.C. § 26b(a).  ↩︎

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