Toolson v. New York Yankees, Inc., 346 U.S. 356 (1953)
Per curiam opinion.
PER CURIAM.
In Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200, this Court held that the business of providing public baseball games for profit between clubs of professional baseball players was not within the scope of the federal antitrust laws. Congress has had the ruling under consideration, but has not seen fit to bring such business under these laws by legislation having prospective effect. The business has thus been left for thirty years to develop on the understanding that it was not subject to existing antitrust legislation. The present cases ask us to overrule the prior decision and, with retrospective effect, hold the legislation applicable. We think that, if there are evils in this field which now warrant application to it of the antitrust laws, it should be by legislation. Without reexamination of the underlying issues, the judgments below are affirmed on the authority of Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, supra, so far as that decision determines that Congress had no intention of including the business of baseball within the scope of the federal antitrust laws.
Affirmed.
* Together with No. 23, Kowalski v. Chandler, Commissioner of Baseball, et al., argued October 13-14, 1953, and No. 25, Corbett et al. v. Chandler, Commissioner of Baseball, et al., argued October 14, 1953, both on certiorari to the United States Court of Appeal for the Sixth Circuit.
1. Federal Baseball Club v. National League, 259 U.S. 200.
2. Compare Paul v. Virginia, 8 Wall. 168, and Hooper v. California, 155 U.S. 648, with United States v. South-Eastern Underwriters Assn., 322 U.S. 533, and Lorain Journal Co. v. United States, 342 U.S. 143. See also Times-Picayune Publishing Co. v. United States, 345 U.S. 594; United States v. National Assn. of Real Estate Boards, 339 U.S. 485; United States v. Crescent Amusement Co., 323 U.S. 173; American Medical Assn. v. United States, 317 U.S. 519.
3. H.R.Rep. No. 2002, 82d Cong., 2d Sess. 4, 5.
The primary sources of revenue for baseball clubs are admissions, radio and television, and concessions. The following table indicates the combined revenue of the 16 major league clubs from these sources for the years 1929, 1939, and 1950.
Major league revenue
[In thousands of dollars]
-------------------------------------------------
Source of revenue 19291* 1939 1950
-------------------------------------------------
Home games 6,559.1 6,766.6 18,334.8
Road games 2,221.4 2,320.2 4,517.8
Exhibition games 422.6 515.7 911.5
Radio and television 0 884.5 3,365.5
Concessions (net) 582.8 850.3 2,936.3
Other 733.4 776.0 1,969.6
-------- -------- --------
Gross receipts 10,519.5 12,113.3 32,035.5
-------------------------------------------------
* Data unavailable for 2 clubs: Chicago, American League, and Pittsburgh, National League.
The fastest-growing source of revenue for major league clubs is radio and television. Receipts from these media of interstate commerce were nonexistent in 1929. In 1939, 7.3 percent of the clubs’ revenue came from this source, and in 1950, this share rose to 10.5 percent.
Portrayed in absolute terms, the growing importance of radio and television becomes even more pronounced. Receipts rose from nothing in 1929 to $884,500 in 1939 and $3,365,500 in 1950. Reported income from primary radio and television contracts for 1951 indicate that this sharp increase is continuing. . . . To this must be added $110,000 for the sale of radio and television rights to the 1951 all-star game and $1,075,000 for the sale of similar rights to the 1951 world series.
Id. at 5-6.
4. National League of Professional Baseball Clubs v. Federal Baseball Club, 50 App.D.C. 165, 169, 269 F. 681, 685.
5. 259 U.S. at 208-209.
6. See brief for appellants in the Court of Appeals, pp. 45-67; brief for defendants in error in this Court, pp. 45-66.
7. See brief for appellants in Court of Appeals, pp. 68-72; brief for defendants in error in this Court, pp. 66-72.
8. Hart v. Keith Vaudeville Exchange, 262 U.S. 271, 274, and see North American Co. v. Securities and Exchange Comm’n, 327 U.S. 686, 694.
9. In opposing approval of four exclusionary bills then pending, the Subcommittee did not take the stand that organized baseball and other comparable sports, although constituting interstate trade or commerce, already are exempt from the broad coverage of the Sherman Act. On the contrary, it said:
Four bills have been introduced in the Congress, three in the House, one in the Senate, intending to give baseball and all other professional sports a complete and unlimited immunity from the antitrust laws. The requested exemption would extend to all professional sports enterprises and to all acts in the conduct of such enterprises. The law would no longer require competition in any facet of business activity of any sport enterprise. Thus, the sale of radio and television rights, the management of stadia, the purchase and sale of advertising, the concession industry, and many other business activities, as well as the aspects of baseball which are solely related to the promotion of competition on the playing field, would be immune and untouchable. Such a broad exemption could not be granted without substantially repealing the antitrust laws.
Id. at 230.
10.
The reserve clause is popularly believed to be some provision in the player contract which gives to the club in organized baseball which first signs a player a continuing and exclusive right to his services. Commissioner Frick testified that this popular understanding was essentially correct. He pointed out, however, that the reserve clause is not merely a provision in the contract, but also incorporates a reticulated system of rules and regulations which enable, indeed require, the entire baseball organization to respect and enforce each club’s exclusive and continuous right to the services of its players.
H.R.Rep. No. 2002, 82d Cong., 2d Sess. 111. See also Section VII, The Reserve Clause, id. at 111-139, and Gardella v. Chandler, 172 F.2d 402.
In No. 18, the following specific allegations appear, and those in No. 23 are comparable:
XI
That the Defendants, and each of them, have entered into or agreed to be bound by a contract in the restraint of Interstate Commerce; that said contract is designated as the Major-Minor League Agreement, dated December 6, 1946, and provides in effect that:
1. All players’ contracts in the Major Leagues shall be of one form, and that all players’ contracts in the Minor Leagues shall be of one form.
2. That all players’ contracts in any league must provide that the Club or any assignee thereof shall have the option to renew the player’s contract each year, and that the player shall not play for any other club but the club with which he has a contract or the assignee thereof.
3. That each club shall, on or before a certain date each year, designate a reserve list of active and eligible players which it desires to reserve for the ensuing year. That no player on such a reserve list may thereafter be eligible to play for any other club until his contract has been assigned or until he has been released.
4. That the player shall be bound by any assignment of his contract by the club, and that his remuneration shall be the same as that usually paid by the assignee club to other players of like ability.
5. That there shall be no negotiations between a player and any other club from the one which he is under contract or reservation respecting employment either present or prospective unless the Club with which the player is connected shall have in writing expressly authorized such negotiations prior to their commencement.
6. That, in the case of Major League players, the Commissioner of Baseball, and, in the case of Minor League players, the President of the National Association, may determine that the best interests of the game require a player to be declared ineligible, and, after such declaration, no club shall be permitted to employ him unless be shall have been reinstated from the ineligible list.
7. That an ineligible player whose name is omitted from a reserve list shall not thereby be rendered eligible for service unless and until he has applied for and been granted reinstatement.
8. That any player who violates his contract or reservation, or who participates in a game with or against a club containing or controlled by ineligible players or a player under indictment for conduct detrimental to the good repute of professional baseball, shall be considered an ineligible player and placed on the ineligible list.
9. That an ineligible player must be reinstated before he may be released from his contract.
10. That clubs shall not tender contracts to ineligible players until they are reinstated.
11. That no club may release unconditionally an ineligible player unless such player is first reinstated from the ineligible list to the active list.
* * * *
XIII
That, by reason of Plaintiff’s being placed and held on said ineligible list as hereinabove set out and the making of the aforementioned contract by the Defendants, the Defendants, and each of them, have refused, since the 25th day of May, 1950, and still do refuse, to allow Plaintiff to play professional baseball, and that Plaintiff has thereby been deprived of his means of livelihood, all to the Plaintiff’s damages in the sum of $125,000.00.
The complaint also contains a separate cause of action alleging that the defendants, by virtue of their agreements, have entered into a combination and conspiracy in the restraint of trade or commerce among the several states, and another cause of action alleging that the defendants have, by their agreements, combined to monopolize professional baseball in the United States.
11. E.g., Congress has expressly exempted certain specific activities from the Sherman Act, as in § 6 of the Clayton Act, 38 Stat. 731, 15 U.S.C. § 17 (labor organizations), in the Capper-Volstead Act, 42 Stat. 388-389, 7 U.S.C. §§ 291, 292 (farm cooperatives), and in the McCarran-Ferguson Act, 59 Stat. 34, 61 Stat. 448, 15 U.S.C. (Supp. V) § 1013 (insurance). And see Apex Hosiery Co. v. Leader, 310 U.S. 469, 501, 512.