Baseball Not A Business – Just a Money Maker

in Business

Baseball does not have to follow antitrust laws that most businesses in the United States have to follow.

On May 29, 1922, the United States Supreme Court ruled that organized baseball did not violate antitrust laws, as alleged by the Baltimore franchise of the defunct Federal League in 1915.

The Supreme Court held that organized baseball is not a business, but a sport.

baseball businessCourts have since been reluctant to overrule the decision, making baseball the only professional sport in the country to enjoy an antitrust exemption.

The  reason is simple, it is money.

Baseball owners enjoy not accurately reporting the business of baseball.

While the baseball players union has made some progress into baseball’s antitrust exemption, with the adoption of a collective bargaining agreement, baseball is still a sport in the eyes of the law.

As a result, owners reap significant profits.

The average major league baseball team rose 16% in value during the past year.

The average value is now $605 million. Cable television channels are feeding all major league baseball teams obscene revenue streams. all but two major league baseball teams rose in value in 2011.

The exceptions were the New York Mets, whose value fell 4% to 719 million and the Tampa Bay Rays lose value slipped 2% to 323 million.

Will Lawmakers Ever Take Away Baseball Antitrust Exemption

Lawmakers have threatened in the past to remove baseballs antitrust exemption, but mostly it’s a political chip that gets played from time to time. Baseball makes money, lots and lots of money. That makes the “business of baseball” a very powerful entity.

This not news in baseball circles. No one wants to kill the golden goose.

So when your hear about your favorite team not making money, keep in mind they don’t really have to open their books for anyone. a sure sign that they are, is that teams keep doling out multi-year, multimillion dollar deals for players.

Albert Pujols signed a 10 year $240 million deal this past off-season.

The Chicago Cubs hired Theo Epstein away from the Boston Red Sox for $18.5 million as a president of the club, in order to make those multimillion dollar deals with players.

Baseball may not be a business in the eyes of the law, but in the eyes of anyone else that’s looking, they are made they are a money maker.

The Top 5 Teams In Terms of Value for 2011

1.New York Yankees $1.85 Billion

2.Los Angeles Dodgers $1.4 Billion

3.Boston Red Sox $1 Billion

4.Chicago Cubs $879 Million

5.Philadelphia Phillies $723 Million



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