Week 2 Discussion - SPMT410

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W2: Sports Monopoly Please read the sources in the Week 2 Content section. Once you have read these resources, using the respective number for each question, please answer the following: Does the monopoly power wielded by professional sports leagues hurt the fans, players, citizens, local economies, or the sport? What solutions could be used? Hello Class, I do believe the monopoly power wielded by professional sports leagues to be negative. I believe there is enough to go around when it comes to sports and I believe a competition of sports leagues that provides the same product would be beneficial in helping local economies. We have seen start-up football leagues like the United States Football League (USFL) and the Extreme Football League (XFL) try to compete with the National Football League (NFL) for ratings. However, their seasons take place during the NFL’s offseason and recently the USFL and XFL merged into the United Football League. Football has always been king of TV ratings and for sports gambling, you are starting to see more start-up leagues for Football compared to other sports. Major League Baseball’s monopoly power is more unique than others as they have a stranglehold on the game of baseball in the United States. In 1922, MLB was granted a special provision as the Supreme Court ruled in favor of MLB in the Federal Baseball Club of Baltimore V. National League. The Sherman Antitrust Act did not apply to MLB and that baseball was a state affair and not an interstate commerce. “While teams had to travel between states to play each other, this was considered incidental and not a major part of business” (Deshingkar, 2022). Recently, Senator Bernie Sanders has been trying to do away with the MLB’s special monopoly that would allow for MLB to have open competition with other baseball leagues. The “Save American Baseball Act” is about giving families the ability to enjoy a game at the ballpark without breaking the bank for tickets. Even with minor league teams around the U.S., MLB still has full control all over the states. All other sports leagues are not afforded the same provisions as MLB has had for over a century. MLB basically can control their players and would hold all the cards in a potential battle with the MLB Players Association. Other leagues would have to compromise with their league's Players Associations as a way to keep them from jumping to other leagues. Much to my previous discussion, removing the protection that MLB has had for so long could, in turn, help MLB and the sport, which would force MLB to implement a salary cap that would give lower payroll teams a chance to compete with the top-earning teams. A salary cap would

keep the top-earning teams from spending millions on players since players would be able to make more money off their contracts if the special provisions were eliminated. We could see parity in the sport of baseball and would help increase revenue and TV ratings as more fans would want to tune in. - Gerardo Resources: Dator, J. (2022). Bernie Sanders’ attempt to end MLB’s monopoly, explained. SBNation. https://www.sbnation.com/mlb/2022/3/23/22992836/bernie-sanders-mlb-antitrust- monopoly-explained Deshingkar, A. (2022). “Nobody Can Start A League to Compete With MLB”- Atlanta Braves Star Makes A Bold Claim On MLB “Hurting The Game.” Essentially Sports. https://www.essentiallysports.com/us-sports-news-mlb-baseball-news-nobody-can-start- a-league-to-compete-with-mlb-atlanta-braves-star-makes-a-bold-claim-on-mlb-hurting-the- game/ Replies: Hello Thomas, Great job on this week’s discussion. I do see the monopoly power that major sports leagues have as a negative. MLS, NFL, NBA, and MLB are the major sports leagues in America and have exclusive broadcasting rights that bring the power to phase out other teams. Granted, only the MLB is not subject to the same Antitrust Act as the other leagues are and are the only baseball entity in America. We have seen upstart leagues like the UFL this upcoming spring, however, history shows that those leagues don’t last long. I do think that newer leagues can create a competitive balance as players will be able to get compensated fairly or otherwise leave for a different league. Baseball has long needed parity in the league and it has much to do with revenue. Smaller market teams stand little to no chance against the top-earning teams but if MLB had to compete with another league it would be forced to create a salary cap to create parity in the league so that fans of MLB don’t jump ship. - Gerardo

Hello Alex, Good job on this week’s discussion. I fully agree that the monopoly power of sports leagues in America impacts fans, players, and the community alike. Fans have to deal with high ticket prices that just keep on increasing, players are constantly at battle with their sports teams to get bigger contracts, and the community must foot the bill to help build stadiums, or many other communities lose out on possibly having a sports team. MLB has a special provision that allows the MLB to have major control over all baseball entities in America. No baseball league can start up in America as opposed to the other 3 major sports leagues. Parity in baseball would help increase fan loyalty and we wouldn’t be seeing empty stadiums throughout the season for those low revenue teams. It’s why the NFL is king of the major sports leagues, the turnaround on playoff teams changes every year and on any given Sunday a bad team can beat a good one. - Gerardo

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