9 Wake Forest L. Rev. Online 76
Jaclyn Malmed*
I. Introduction: America’s Pastime
Baseball is America’s pastime, but it may
not be America’s future. As baseball’s primary audience begins to age, the
sport’s viewership and fan base have steadily diminished.[1]
While experts speculate a number of
reasons that contribute to declining viewership, including the cost of attending
an actual game and the drawn-out length of the games (on average, over three
hours),[2]
a primary reason for the decline in ratings may be Major League Baseball’s
inability to attract younger viewers. However, the younger generation may be tuning
out not because they want to, but because Major League Baseball (“MLB” or “the
League”) is forcing them to. Due to MLB
“blackout restrictions,”[3]
young, cord-cutting fans may struggle to follow their favorite teams,
ultimately resulting in lost viewers and harming MLB’s business.[4]
Historically, MLB contracted with
local cable television networks, providing them with the rights to exclusively
air their home team’s games in specified territories.[5]
While contracting to restrain trade and
business is, by definition, a violation of the Sherman Antitrust Act,[6]
MLB has been granted what has come to be known as the “baseball exemption.” In 1922, the Supreme Court determined that
professional baseball is not interstate commerce, and the League has thus been exempted
from traditional antitrust considerations.[7]
MLB’s coveted exemption, however, may
be the cause of the loss of viewership plaguing its business. Because the exemption allows for local
networks to exclusively air the games of certain baseball teams, MLB has
enforced “blackout restrictions” of game viewings in specified territories.[8]
This means that for fans to watch home
games in predefined territories, they must do so via cable television networks.
For Millennial cord-cutters,[9]
blackout restrictions prevent the legal viewing of home team, in-market games,
and even prevent fans from watching games that by most standards would not be
considered local.[10]
This forces Millennial fans to either
purchase expensive cable television packages, forgo watching games, or turn to
illegal means, such as illegal internet streaming, to be able to watch blackout-restricted
games. Recently, a class of baseball
fans attempted to challenge the legality of the blackout restrictions and
baseball’s exemption generally, which ultimately ended in a settlement before
the court could rule on whether television broadcasting and blackout
restrictions are subject to antitrust law.[11]
This Article contends that in order to
avoid a continuing decline in viewership and to prevent illegal viewing of MLB
games, the baseball exemption should be eliminated altogether, or at the very
least, MLB broadcasting activities should not be considered part of the exemption.
Part II of this Article gives an
overview of the “baseball exemption” to the Sherman Antitrust Act and an
overview of the exemption’s origins. Part
III looks at the recent settlement in Garber
and the threats to baseball’s exemption regarding broadcasting and blackout
restrictions,[12]
as well as the likely future interpretation of the baseball exemption. Part IV argues that even if the exemption is
still valid, Major League Baseball should reconsider its blackout restrictions
and internet streaming system in an age of cord-cutters or risk a sharp decline
in business and possible increase in internet piracy.
II. Calling Balls and Strikes: The Baseball Exemption and the Sherman Antitrust Act
The baseball exemption is a unique exclusion
from the Sherman Antitrust Act that protects baseball activities from being
subject to antitrust laws.[13]
While the exemption was granted by the
Supreme Court in 1922, the validity of the exemption becomes increasingly questionable
with each new court decision addressing the issue.
a. Loading the Bases: The Development of the Baseball Exemption
With the goal of preventing restraints
on trade, promoting competition to keep prices low, and protecting consumers, the
Sherman Antitrust Act (the “Act”) was enacted by Congress in 1890.[14]
The first two sections of the Act
outline the ways in which entities are prohibited from creating restraints on
trade.[15]
Section One of the Act prevents contracting
to create a trust or conspiracy that would restrain trade between the states.[16]
Section Two of the Act prohibits the
creation or formation of monopolies that would restrain trade amongst the
states.[17]
Thus, all forms of contracting in restraint of trade, or creation of monopolies,
would be a violation of the Act.
In 1922, the Supreme Court determined that “baseball
activities” were exempt from antitrust restraints and were therefore not
subject to antitrust laws via its ruling in Federal Baseball.[18] There, the Baltimore Terrapins, a baseball
club then competing in a league (the Federal League) independent of the
still-extant National League and American League,[19]
alleged that the two leagues were colluding in an anticompetitive manner by inducing
all of the other Federal League teams to leave that league, thereby effectively
destroying the Federal League.[20]
But the Supreme Court created what would
become known as the baseball exemption by holding that baseball was not even
interstate commerce at all; if baseball was not interstate commerce, the
business of baseball could not violate federal antitrust laws.[21]
According to the Court, the business of
baseball was “giving exhibitions,” which constituted “purely state affairs,”
and any accompanying interstate travel to play such exhibitions was merely
incidental to the state exhibitions.[22]
Because antitrust laws could only be
constitutionally applied to interstate commerce, the business of baseball was
safe from antitrust regulation.
Later decisions, both from the Supreme
Court and lower courts, have expressed skepticism as to the exemption’s
validity and have debated which activities are essential to the business of
baseball and which are tangential (and thus subject to antitrust regulations). The Supreme Court in Toolson v. New York Yankees[23]
refused to revisit the issue of whether baseball amounted to interstate
commerce. Instead, the Court held that
any decision to overturn Federal Baseball
and invalidate the exemption should be left to Congress, and Congress had never
expressed an intention to consider baseball interstate commerce.[24] Further, in a final Supreme Court decision
addressing the baseball exemption, the Court admitted that baseball is, in
fact, interstate commerce,[25]
but it again refused to invalidate baseball’s exemption.[26]
The reasoning mirrored that of Toolson, suggesting that Congress had
not intended to invalidate the baseball exemption because they had not taken
any action to do so.[27]
While the Court stated that the emergence
of radio and television broadcasting did not require the court to overrule the
baseball exemption, the exemption has never been held to actually apply to television broadcasting.[28]
To the contrary, a decision from the
Southern District of Texas held that the exemption was inapplicable to radio
broadcasting, reasoning that broadcasting was “not central enough to baseball”
to be included in the exemption and ultimately that anticompetitive radio
broadcasting violated antitrust law.[29]
While Congress has not directly
addressed the validity of baseball’s exemption, the Sports Broadcasting Act of
1961[30]
may provide insight into Congress’s intent with respect to broadcasting
restrictions. The Sports Broadcasting
Act provides for antitrust exemptions to telecasting of competitions in
specified professional sports, including baseball.[31]
However, Congress excluded from this
statute certain agreements related to territorial broadcasting restrictions,
which suggests that Congress may have intended to subject these restrictions to
antitrust law.[32]
The exemption is also unique to
baseball, as no other professional sport enjoys a similar privilege. Indeed, subsequent courts have acknowledged
the holding of Federal Baseball
should be limited to its facts and have held that the exemption was not meant
to apply to other sports.[33]
It is unclear what specifically
separates the exhibition of baseball games from other sporting events, but no
other professional sport enjoys a blanket immunity in the same way baseball
has.[34] In fact, the exemption has been explicitly
rejected for boxing,[35]
football,[36]
hockey,[37]
and golf.[38]
b. Seventh Inning Stretch: How MLB Blackout Restrictions Affect Viewership
In order to reach a larger audience
and to transition into the modern internet age, MLB began to allow fans to
stream games on MLB.tv in 2003.[39]
However, MLB’s antitrust exemption
allows the League to contract with both local and national television networks
to ensure that such networks have exclusive rights to broadcast certain games.[40]
The blackout restrictions predate the
days of cable to a time when MLB contracted with local broadcasters to create
exclusive contracts within teams’ “home territories,” with the alleged purpose
of encouraging local fans to attend the games in person rather than listen to
or watch the games at home.[41]
MLB’s use of two different types of
blackout restrictions limits and burdens users of the MLB.tv streaming
services. First, national blackout restrictions
apply to games for which MLB has granted an exclusive broadcast license to a
national network.[42]
Thus, if national networks such as ESPN
or Fox obtain a license to air a game, that particular game will be unavailable
on MLB.tv.[43]
Second, live games are unavailable for a
viewer located in a team’s home territory.[44]
Such viewers are restricted from
watching both home and away games that feature their regional home team.[45]
Further, while an out-of-state fan
(often referred to as an out-of-market viewer) would typically have the
opportunity to watch her home team because she is not physically located in the
restricted region, she would be unable to watch the game if her team is playing
an away game against a team that is regionally restricted.
III. Three Strikes You’re Out: Garber’s Threat to Baseball’s Antitrust Exemption
a. The Garber Settlement and the Effects on Blackout Restrictions
While MLB has enjoyed its carve out
from antitrust law for nearly a century, MLB television broadcasts have
recently come under fire as violating antitrust law. In 2014, the Southern District of New York
refused to dismiss a class action lawsuit regarding MLB blackout restrictions.[46]
The plaintiffs consisted of a class of
fans who alleged, in part, that MLB’s blackout restrictions were
anticompetitive, violated antitrust law, and constituted a conspiracy to charge
high prices for viewing games.[47]
In rejecting MLB’s motion for summary
judgment, the court expressly stated that territorial broadcast restrictions are
not meant to be included in the baseball exemption and that such restrictions are
subject to antitrust law.[48]
The decision in Garber hinged on the fact that Federal Baseball has been limited to its facts,[49] which discussed only those parts of baseball which were not considered interstate commerce—the actual exhibition of baseball games.[50] Acknowledging that television broadcasting is “by nature” an interstate industry, the court threatened that, should the case go to trial, the baseball exemption may be limited or even overturned.[51]
Perhaps because MLB feared a close
scrutiny of its antitrust exemption, the League settled with the class of fans
before the case could go to trial.[52] With the judge in Garber clearly willing to consider broadcasting beyond the scope of
the baseball exemption, it seems likely that MLB’s broadcasting policies would,
in fact, be held to violate antitrust laws.[53]
As a result of the settlement agreements,
MLB agreed to lower prices for MLB.tv subscriptions and to provide an option
for fans to purchase less expensive, single-team options that allow viewers to
purchase access to games only for a selected team, rather than for the entire
league.[54]
The settlement, however, does not
address the validity of MLB blackout restrictions. Because the issue of the baseball exemption
was never actually reached in Garber,
MLB retained its ability to enforce territorial blackout restrictions. Thus, regardless of the newly available
services resulting from the settlement, local fans must still purchase regional
cable packages in order to watch geographically restricted programming.[55]
b. The Future of the Baseball Exemption
Because the settlement prevented the
issue from reaching court, the question remains: is the baseball exemption a
valid exemption from antitrust law? This
will likely depend on a reviewing court’s interpretation of the purpose of the
exemption.
If a court were to revisit the
baseball exemption in the context of its original purpose, then the exemption
is likely no longer relevant. The court
in Federal Baseball made its decision
based on the idea that baseball was not interstate commerce and therefore not
subject to antitrust regulation.[56] Some scholars, including Supreme Court
Justice Samuel Alito, have suggested that this decision was not an outlier when
it was issued, considering the 1922 Court’s narrow, “limited” view of the
commerce clause power.[57] However, that rationale does not endure
today. Even if baseball was strictly a
state affair in 1922, the business of baseball has grown through endeavors such
as merchandise licensing and sales, a system of trading players between teams,
major league teams contracting with minor league teams to create a “farm
system,” and national broadcasting of games and events.[58] Courts after Federal Baseball have acknowledged that the business of baseball
can certainly be defined as interstate commerce.[59]
But even after its acknowledgement that
baseball is interstate commerce, the Supreme Court has not invalidated the
baseball exemption. Subsequent decisions
found that Congress’s intent was clear from its decision not to respond to Federal Baseball and decided that any
changes to the exemption should come directly from Congress.[60] However, this reasoning may have simply been
a way for the Court to avoid invalidating the long-established exemption and its
reluctance to create “retroactivity problems.”[61] It is not clear if a modern court would feel
similarly reluctant to take responsibility for undoing an exemption that has
been relied upon for nearly a century.
After Garber, it seems clear that animus exists toward the current
exercise of the baseball exemption. And
while some have argued that the antitrust exemption enhances consumer welfare
by creating a “competitive balance,” the exemption is actually harming fans by
allowing MLB to overcharge them for the ability to watch games and by preventing
them from watching some games entirely—an essential experience of a baseball
fan.[62] However, the future of the baseball exemption
may depend on the willingness of the next reviewing court to overturn a century
of history rather than rely on the outdated intent of the original rule.
IV. Reviewing the Play: The Shift to “Cord-Cutting” and Internet Streaming May Harm Major League Baseball
The chain of events in Garber that lead to a settlement
suggests that MLB broadcasting is interstate commerce and contracting to create
territorial broadcast restrictions is a restraint of trade in violation of
federal antitrust law. But the
settlement also suggests that future judicial evaluation of the baseball
exemption may be difficult to achieve. Because
courts appear to agree that Federal
Baseball should be construed narrowly and that professional baseball likely
constitutes interstate commerce, MLB should consider nonenforcement of the
antitrust exemption in relation to blackout restrictions in an effort to
protect its business from a surge of illegal internet streaming.
In the age of “instant” and endless
choices, Millennial cable television subscribers are sharply declining in numbers.[63]
Millennials are leaving behind paid
cable television subscriptions at an increasing rate in favor of streaming
subscriptions that offer benefits such as lower per-month costs and premium
on-demand content.[64]
The trend towards “cord-cutting” appears
to be accelerating—households with cable television declined from ninety
percent of households in 2010 to seventy-seven percent in 2018 with no
indication of a reversal.[65]
While Major League Baseball may have
previously enjoyed legitimate advantages via the antitrust exemption, that
exact exemption may be harming its business. The shift to cord-cutting resulted in a
decline in cable television subscribers, and with it a decline in viewership of
cable television networks. In fact, fans’
inabilities to watch baseball games via streaming services and the high cost of
cable subscriptions is contributing to the overall decline in Americans’
interests in watching baseball.[66]
It would be beneficial for MLB to
reevaluate its system of contracting with local cable networks in order to
attract younger fans, increase business, and detract from the harm that has
been caused by cord-cutting.
MLB blackout restrictions also
encourage illegal viewing and internet piracy. Because of cord-cutting fans’ inability to
watch local games, regardless of whether they are willing to pay for MLB.tv
packages, many will search for illegal, pirated streams of live games, which
diverts both dollars and ratings from MLB.[67]
In 2014, MLB acknowledged that it had
lost millions of dollars to piracy.[68]
Unless effective action is taken against
piracy, individuals who illegally stream live sporting events will likely
continue to avoid paying for legal viewing services in the future, which could
result in a large loss of potential revenue for the League.[69]
Targeting and removing illegal
streaming sites is often difficult because of the nature of such sites.[70]
While MLB may be dedicated to finding
and removing illegal streaming sites, elimination of one site often leads to
the creation of others, making it nearly impossible to completely eradicate
illegal streams.[71]
Further, other fans use Virtual Private
Networks (“VPNs”) to skirt blackout restrictions. While a fan who uses a VPN still pays for the
MLB.tv package, the VPN tricks the MLB.tv service into believing that the fan is
in a different geographical location; the service therefore applies the wrong
blackout restrictions and allows the fan to watch games that should be
restricted.[72]
While MLB punishes violators of
streaming policy through fines and suspension of service,[73]
this only addresses a portion of the problem.
Regardless of the League’s dedication to eliminating piracy, total
elimination has proven nearly impossible in other industries, and MLB should
instead consider how to adapt despite the existence of illegal streaming.
While no other sport or area of the entertainment industry is entitled to similar antitrust exemptions, MLB may look to the movie and music industries as a positive example of how abandoning the antitrust exemption may curb the effects of piracy.[74] Following a surge of digital piracy in 2005 and endurance of a sharp economic blow, the movie industry ventured into the business of online streaming via services such as Hulu and Netflix.[75] These endeavors helped to offset the costs of piracy and boosted revenue by offering competitive pricing and superior service.[76] While piracy has not been eliminated, the movie industry has effectively offset much of the negative effects of piracy, evinced by a continuous increase in gross revenue.[77]
Similarly, the music industry was
plagued by the online sharing of pirated music.[78]
In response to the widespread illegal
sharing of pirated music that took place in the early twenty-first century,[79]
the music industry responded by adapting to consumer preferences, with Apple
allowing for the purchase of individual music tracks and the industry’s
eventual venture into music streaming services such as Spotify and Apple Music.[80]
As a result, the music industry saw an outcome
similar to the movie industry’s outcome: the effects of piracy were offset,
leading to an increased profit from listeners and a decrease in illegal
downloads.[81]
MLB should consider emulating the music
and movie industries’ willingness to adapt in order to balance saving its business
and offsetting the effects of illegal internet streaming, or risk facing the
consequences that these industries avoided.
V. Conclusion
The baseball exemption to antitrust
law is nearly a century old and is becoming increasingly outdated as the
business of baseball grows to encompass more than simple state affairs. Since the exemption was created in 1922,
baseball has grown its business through merchandise licensing deals, trading of
players across teams and through minor league systems, and broadcast of games
that has the ability to reach a national audience. Interstate commerce is no longer incidental to
the game: it is central to the game.
While the baseball exemption has been
heavily criticized over the years, and narrowed by subsequent courts, the
exemption is still valid and exercised by Major League Baseball. Through its antitrust exemption, MLB has
created anti-competitive contracts that give local cable networks an exclusive
license to broadcast regional games, thus creating blackout restrictions that
prohibit local fans from viewing games in any manner other than through an
expensive cable television subscription.
Regardless of the validity of the
baseball exemption, MLB as a business is suffering harm as a result of its
blackout restrictions. Baseball has seen
a decline in viewership, attributed to a growing disinterest of younger fans
and an increasingly aging fan base. The
issue, however, appears to be more intricate than simply an aging fan base. Younger audiences are more likely to be
“cord-cutters,” viewers who abandon traditional cable subscriptions for
internet-based streaming options. Because
of the limitations of the blackout restrictions, fans are either not watching
games or turning to illegal means to watch the games. Specifically, fans who would have paid to
watch a game, had it been available in their area, are instead turning to
illegal live streams or VPNs to watch the game.
To curb the effects of piracy and boost
its suffering ratings, MLB should reconsider the outdated baseball exemption. While it is unlikely that MLB would be willing
to part completely with its exemption, the League should at least consider
abandoning its blackout restrictions to adapt to a change in viewership.
* J.D. (2019),
Wake Forest University School of Law. Jaclyn
Malmed is a former Executive Editor of the Wake
Forest Law Review. Jaclyn would like
to thank her family and friends for their support during the publishing process
and Wake Forest Law Review Executive
Online Editor Samuel Gilleran for his aid during publication and his excellent
suggestions. Jaclyn would especially
like to thank her brother, Eric Malmed, for his helpful comments and for
sharing his love of baseball with her.
[1] Brad Tuttle, 9 Reasons It’s Hard to Be a Baseball Fan
Today, Time (Apr. 6, 2015),
https://time.com/3772690/enums/.
[2] Id.
[3] “Blackout Restrictions” refers to geographic and
territorial broadcasting restrictions, which grant an exclusive license to
local cable TV networks and prevent online or paid TV subscribers from viewing
specific games. See Alexandra DeSanctis,
Major League Baseball’s Ridiculous Blackout Policy, Nat’l Rev. (Apr. 13, 2018, 6:30 AM), https://www.nationalreview.com/2018/04/major-league-baseball-blackout-rules-alienate-fans/.
[4] MLB restrictions prevent
viewers in specified areas from watching games if their region is “blacked
out.” Blackout Restrictions, MLB.tv,
https://www.mlb.com/live-stream-games/subscribe [https://web.archive.org/web/20180504172635/https://www.mlb.com/live-stream-games/subscribe] (last visited Oct. 25, 2019). This also affects viewers who wish to view
their home team online while physically located in any region their home team
is or will be playing. See id.
[5] Id. (noting territories
are determined based on teams’ home locations).
[6] See 15 U.S.C. §§ 1–2 (2012).
[7] See Fed. Baseball Club, Inc. v. Nat’l League of Prof’l Baseball
Clubs, 259 U.S. 200, 208–09 (1922).
[8] See Blackout Restrictions,
supra note 4.
[9]
See Toni Fitzgerald, Portrait of a Cord Cutter: Who’s Doing It and
Why, Forbes (June 29, 2019,
7:22 PM), https://www.forbes.com/sites/tonifitzgerald/2019/06/29/portrait-of-a-cord-cutter-whos-doing-it-and-why/
(noting that cord-cutting is often associated with the “Millennial” and “Gen Z”
generations, contributing to the idea that a required cable subscription will
weed out younger viewers).
[10] See Blackout Restrictions,
supra note 4. A fan located in Winston-Salem, North Carolina,
using a paid MLB.tv subscription is restricted from viewing all games played by
the Atlanta Braves, Baltimore Orioles, Cincinnati Reds, and Washington
Nationals. See id. (enter zip code 27109 in
the “Check your local restrictions” tool); see also infra note 41
(explaining that none of these teams would be considered local in any
meaningful sense, and restrictions of out-of-state teams do not further MLB’s
policy of encouraging fans to attend games live).
[11] William F. Saldutti IV,
Comment, Blocking Home: Major League
Baseball Settles Blackout Restriction Case; However, a Collision with Antitrust
Laws Is Still Inevitable, 24 Jeffrey
S. Moorad Sports L.J. 49, 63–68 (2017).
[12]
While the court in Flood v. Kuhn
recognized that “[p]rofessional
baseball is a business and it is engaged in interstate commerce,” an
in-depth discussion of whether certain business divisions of professional
baseball are considered interstate commerce is beyond the scope of this
Article. See Flood v. Kuhn, 407 U.S. 258, 282
(1972).
[13] Saldutti, supra note 11, at 56–58.
[14] Jacob M. Ware, Note, Intentional Pass: Analyzing Baseball’s
Antitrust Exemption as Applied to Broadcasting Agreements in Laumann v.
National Hockey League, 49 Ga. L. Rev.
895, 903 (2015).
[15]
15 U.S.C. §§ 1–2 (2012).
[16] Id. § 1.
[17] Id. § 2.
[18] Fed. Baseball Club, Inc. v.
Nat’l League of Prof’l Baseball Clubs, 259 U.S. 200, 208–09 (1922).
[19] These leagues, together, are
the predecessors of the MLB organization. See
Nathanial Grow, Defining the “Business of
Baseball”: A Proposed Framework for Determining the Scope of Professional
Baseball’s Antitrust Exemption, 44 U.C.
Davis L. Rev. 557, 566–67 (2010).
[20] Fed. Baseball Club, Inc., 259 U.S. at 207.
[21] Id. at 208–09.
[22] Id.
[23] 346 U.S. 356 (1953).
[24] Id. at 357.
[25] Flood v. Kuhn, 407 U.S. 258,
282 (1972) (“Professional baseball is a business and it is engaged in
interstate commerce.”).
[26] Id. at 284.
[27] Id. at 283.
[28] Gary Roberts, On the Scope and Effect of Baseball’s
Antitrust Exclusion, 4 Seton Hall J.
Sport L. 321, 327–28 (1994).
[29] Henderson Broad. Corp. v.
Houston Sports Ass’n, 541 F. Supp. 263, 265 (S.D. Tex. 1982).
[30] 15 U.S.C. § 1291 (2012).
[31]
Id.
[32] See 15 U.S.C. § 1292 (2012); Laumann v. Nat’l Hockey League, 56 F.
Supp. 3d 280, 295 (S.D.N.Y. 2014). The
court in Garber, discussed in greater
detail in Part III of this paper, relied on this exemption in determining that
broadcasting was not included in the baseball exemption.
[33] See Radovich v. Nat’l Football League, 352 U.S. 445, 451 (1957) (“[W]e
now specifically limit the rule there established to the facts there involved, i.e., the business of organized professional baseball.”).
[34]
See Carl W. Hittinger & Adam D. Brown, Antitrust Law Looms over
Sports Contracts Analysis, Pitt. Post-Gazette (Feb. 14, 2011, 12:00 AM), https://www.post-gazette.com/business/legal/2011/02/14/Antitrust-law-looms-over-sports-contracts-analysis/stories/201102140219.
[35] United States v. Int’l Boxing
Club, 348 U.S. 236, 242 (1955).
[36] Radovich, 352 U.S. at 447–48.
[37] Laumann, 56 F. Supp. 3d at
297.
[38] Flood v. Kuhn, 407 U.S. 258, 282–83
(1972) (citing Deesen v. Prof’l Golfers’ Ass’n of Am., 358 F.2d 165 (9th Cir.
1966)).
[39] Ben Popper, The Changeup: How Baseball’s Tech Team Built
the Future of Television, Verge, https://www.theverge.com/2015/8/4/9090897/mlb-bam-live-streaming-internet-tv-nhl-hbo-now-espn (last visited Oct. 25, 2019). MLB’s first venture with streaming packages
began in 2002. See id.
[40] Saldutti, supra note 11, at 63–64.
[41] Id. at 64. The blackout restrictions are no longer
effective for this purpose. See id.
Blackout restrictions often apply to
both the region a viewer is physically located and surrounding areas. As noted above, a viewer in Winston-Salem, North
Carolina, is restricted from viewing games of the Cincinnati Reds, Washington
Nationals, Atlanta Braves, and Baltimore Orioles. See supra note 10. “It is not feasible” for fans to travel to
view games in each of these areas at the frequency with which they may stream
games over the internet. See Saldutti, supra note 11, at 64.
[42] Nathan M. Hennigan, Blackout or Blackmail? How Garber v. MLB Will Shed Light on Major League Baseball’s Broadcasting Cartel, 8 Brook. J. Corp. Fin. & Com. L. 158, 174
(2013).
[43] Id.
[44] Id. at 175.
[45] Id.
[46] Laumann v. Nat’l Hockey League,
56 F. Supp. 3d 280, 307 (S.D.N.Y. 2014).
[47] Id. at 285; see Garber v. Office of the Comm’r of
Baseball, 120 F. Supp. 3d 334, 336 (S.D.N.Y. 2014); Saldutti, supra note 11, at 65–67. Because the claims in Garber and Laumann were
similar, the court consolidated the decision. Laumann, 56 F. Supp. 3d at 280.
[48] Laumann, 56 F. Supp. 3d at 295.
[49] Radovich v. Nat’l Football
League, 352 U.S. 445, 451 (1957).
[50] Fed. Baseball Club, Inc. v.
Nat’l League of Prof’l Baseball Clubs, 259 U.S. 200, 208–09 (1922).
[51] Laumann, 56 F. Supp. 3d at 295.
[52] Saldutti, supra note 11, at 68.
[53] Laumann, 56 F. Supp. 3d at 295.
[54] Major League Baseball Settles Lawsuit over Television Blackouts, Sports Illustrated (Jan. 19, 2016), https://www.si.com/mlb/2016/01/19/garber-case-settlement-tv-packages.
[55] Sharon B. Hodge, After Settlement, MLB Remains Vulnerable to
Antitrust Challenges, Legal Newsline
(May 2, 2016), https://legalnewsline.com/stories/510720144-after-settlement-mlb-remains-vulnerable-to-antitrust-challenges.
[56] Fed. Baseball Club, Inc. v.
Nat’l League of Prof’l Baseball Clubs, 259 U.S. 200, 208–09 (1922).
[57]
Samuel A. Alito, Jr., The Origin of the
Baseball Antitrust Exemption, 34 J.
Sup. Ct. Hist. 183, 193 (2009).
[58]
Id.; see Grow, supra note 19,
at 610–11.
[59]
See, e.g., Flood v. Kuhn, 407 U.S. 258, 282 (1972) (“Professional
baseball is a business and it is engaged in interstate commerce.”).
[60]
Id. at 273–76; Toolson v. New York Yankees,
Inc. 346 U.S. 356, 356–57 (1953).
[61]
Flood, 407 U.S. at 283.
[62]
The Second Circuit reasoned that the collection and even distribution of
profits from the sale of all MLB licensed merchandise created a procompetitive
balance by distributing profits from the sales to smaller-market teams. See Allan H. (“Bud”) Selig & Matthew
J. Mitten, Baseball Jurisprudence: Its Effects on America’s Pastime and
Other Professional Sports Leagues, 50 Ariz.
St. L.J. 1171, 1189 (2018).
This arguably promotes fans’ expectations that each team has the ability
to win a championship, thereby promoting “fan welfare.”
[63] Brad Adgate, Cord Cutting Is Not Stopping Anytime Soon,
Forbes (Dec. 7, 2017, 11:41 AM), https://www.forbes.com/sites/bradadgate/2017/12/07/cord-cutting-is-not-stopping-any-time-soon.
[64] See id.; Robert Briel, Tivo
Research Shows Reasons for Cord-Cutting, Broadband
TV News (June 15, 2017, 8:56 AM), https://www.broadbandtvnews.com/2017/06/15/tivo-research-shows-reasons-for-cord-cutting/.
[65] Dennis Restauro, The Rapid Decline of Cable TV,
Grounded Reason (Jan. 31, 2019), https://www.groundedreason.com/the-rapid-decline-of-cable-tv/.
[66] See Chris Morran, MLB to Offer In-Market Streaming Starting in
2017 (But You’ll Still Need Cable), Consumerist
(Jan. 19, 2016, 3:21 PM), https://consumerist.com/2016/01/19/mlb-to-offer-in-market-streaming-starting-in-2017-but-youll-still-need-cable/; Tuttle, supra note 1.
[67] Josh Peter, Digital Pirates Steal Signals, Money from
Leagues, USA Today (Oct. 8,
2014, 8:47 AM), https://www.usatoday.com/story/sports/2014/10/07/television-pirates-pay-per-view-ufc-nfl-nba-nhl-mlb/16871583/.
[68] Id.
[69]
See Ass’n of Internet Security Prof’ls,
Illegal Streaming and Cybersecurity Risks 15 (Autumn 2014) (unnumbered
working paper), https://cryptome.org/2014/09/illegal-streaming-malware-epoch-times-full-14-0923.pdf
[https://perma.cc/DFH7-SNQM].
[70] For example, popular websites,
including reddit.com,
provide message boards where users can post streams to individual games. See Reddit:
r/MLBStreams, https://www.reddit.com/r/MLBStreams/ (last visited Oct. 25, 2019). Multiple new links are provided for each
individual game, making it nearly impossible for MLB to eliminate every pirated
stream. See ausar999, Comment to It’s
Opening Day! Get Ready to Stream!, Reddit:
r/MLBStreams (Mar. 29, 2019, 6:32:20 PM), https://www.reddit.com/r/MLBStreams/comments/b6ie4v/its_opening_day_get_ready_to_stream/ejlf1eb/.
[71] Gregory Day, Competition and Piracy, 32 Berkeley Tech. L.J. 775, 819 (2017)
(“The leagues have described fighting illicit sites as a game of
‘whack-a-mole,’ claiming every time one site is eliminated, another arises.”)
[72] Jacob Bogage, Fans Still Can’t Stream Nats or Orioles
Games. They Aren’t Happy About It., Wash.
Post (Apr. 5, 2018, 7:00 AM), https://www.washingtonpost.com/news/dc-sports-bog/wp/2018/04/05/cord-cutters-still-cant-watch-nats-or-orioles-games-they-arent-happy-about-it.
[73]
Lee Rood, Baseball Blackouts: Who’s
Responsible for Viewing Hell?, Des
Moines Reg. (May 5, 2015, 10:02 AM), https://www.desmoinesregister.com/story/news/2015/05/04/baseball-blackouts-responsible-viewing/26888559/.
[74] Day, supra note 71, at 819.
[75] Id.
[76] Id. at 817.
[77] Id.
[78] Josh Matthews, Comment, Sports Broadcasting Blackouts: A Harbinger
of Change in a Rapidly Evolving Media Landscape?, 18 Hous. Bus. & Tax L.J. 202, 219–21
(2018).
[79] Id.
[80] See Molly Hogan, Note, The
Upstream Effects of the Streaming Revolution: A Look into the Law and Economics
of a Spotify-Dominated Music Industry, 14 Colo.
Tech. L.J. 131, 142 (2015).
[81] Id.
