Tuesday, June 18, 2013

Cartels, Monopolies, and Anti-Trust, Oh My! San Jose Sues MLB

As Neil deMaus tweeted, "this should be all kinds of entertaining."

Breaking news out of California: the City of San Jose is suing MLB over its failure to relocate the A's.  Sure, the A's already have their hands full with all sorts of other crap, but this lawsuit is much more about MLB and its monopoly over where its franchises can play.

I've written before about MLB's sacred anti-trust exemption and how it allows the league to pretty much defy basic economics and do whetever the heck it wants with its franchises.  But now, this lawsuit threatens to thrusting that antitrust exemption back under the legal microscope:
The lawsuit claims Major League Baseball and its commissioner, Bud Selig, have violated state and federal laws regarding unfair business practices and anticompetitive conduct. It also challenges the exemption to antitrust laws that the U.S. Supreme Court upheld for Major League Baseball in 1922.

"This action arises from the blatant conspiracy by Major League Baseball to prevent the Athletics Baseball Club from moving to San Jose," the suit says. "This action challenges - and seeks to remedy - defendants' violation of state laws and use of the illegal cartel that results from these agreements to eliminate competition in the playing of games in the San Francisco Bay Area."
For all the Rays fans thinking Tampa Bay's Stadium Saga may end up in court, keep a close eye on all this action in that other Bay Area...MLB has a lot on the line.


  1. Noah, you know darn well MLB can't let these teams move anywhere, because a dumb move can cost it's league billions in the long run. It's like what if Joe Maddon took over ownership, and wanted to move the Rays to Hazleton, you can't have that, and you know so (or maybe you "Don't KNoah", lol). As for the A's move, if San Jose is tech. the Giants "market", then they shouldn't be aloud to move there. I would assume there's lines drawn on the map indicating teams territories. But, why San Jose, why cut the fan base of yours cities pop. in half? I mean I know the San Fran Bay Area is big on baseball like it is the NE, and can support 2 teams, but wouldn't you want to move to Portland (which has a good media market, and size) or San Antonio that is 7th in pop. & growing fast, duh!
    And, the Rays Republic has nothing to worry about, we're rooted here w/ a ever growing fan base, and MLB likes us here w/ having 2 of the top 20 media markets in the US, and are more dominate then the Marlins in 5 of the top 62 in the US, while having a fast growing population...

  2. There are lines on a map. Which is why a Rays move to Charlotte (Braves & Nats), Las Vegas (LAD/LAA), or San Antonio (Rangers & Astros) would be so complicated.

  3. Noah, Oakland and the Rays have nothing in common other than terrible stadiums.

    These rights in question which were given to SF by Oakland in the mid-80s, split a shared market into 2 defined regions. This was based on the Giants trying to move to SJ. There is no question the Bay Area can support 2 teams. SF is being obstinate. Its obvious they want to keep the status quo or push Oak out of the market, because they think they can. OAK to SJ is bound to happen. There is no way they leave for another market altogether. Its just a question of when and for how much compensation OAK will have to give SF. You realize if this was still a shared market this would have already happened. But unfortunately that SJ-SF territory has been reaffirmed and is worth something, even though OAK gave it up for nothing.

    Oakland has private financing lined up to build a new ballpark in SJ. Do you really see Bud turning his back on that?

  4. If the SF bay area "can" support 2 franchises, why then in almost all the years since '68 have the attendance #'s for one franchise been significantly better than the other? I have lived there and been involved in the baseball biz there and it's not financially strong enough for 2 MLB franchises, no matter how close one of them moves to silicon valley. Finley would have done better
    in his original choice in '67 - Seattle.

    A'z want to get out of the weak east bay to cash in on the Santa Clara co. market that the Giants have carefully cultivated. Only unknowing fans assume that the Gi-ants are being "obstinate". These are businesses and Baer knows how much of his business will be lost and the expense of relocating a highly successful Cal. league franchise (80% owned by the Gi-ants) to a lesser market will cost if the A'z actually move. The Gi-ants have a mortgage to pay every year.

    The Gi-ants and their partners Comcast SportsNet are perfectly happy with the secondary status of the A'z in Oakland and they're not gonna let the A'z have SJ free and clear. Would YOU let a business competitor move to a better location that you have control of that will diminish you business? Of course not, that's what Baer is doing.

    It's not how much Wolff "will have" to compensate Larry Baer but how much will be imposed on the A'z and Bud (and knowledgeable pro sports people there) know that the Gi-ants dominate that market as no other MLB franchise does in a shared area does.

    In the late 80's the A'z thought that the Gi-ants in the south bay before the 'net explosion, with previous weak ownership and dearth of transit they would languish in SJ and the A'z would have the entire (at the time more prosperous) north bay and peninsula to draw from.
    Local (and current) owners were found only after CBS threatened to spend significantly less on the next TV contract if the Gi-ants moved to St. Pete - this was documented in "Stadium for Rent". Those new owners took an aggressive stance on coming up with a new situation in SF while 2 different A'z owner regimes sat on their hands and slid towards irrelevancy - which is where they are now.
    Wolff says that he has "financing lined up", but there has been no evidence in writing to support that and now that Sacramento is laying claim to local redevelopment funds that were earmarked for land acquisition he and the SJ politicians are getting edgy. Seeing how Wolff does business, there's a good chance that a bait and switch coming in the future, his pal Bud wants to
    keep private financing of mallparks to a minimum.
    I know it's hard to come up with nothing more than assumptions from 2,900 miles away, so here's are important facts from someone who was there until recently. No more e'quakes and unbelievable taxes...

  5. In regards to SF dominating the market. This is a product of the beautiful downtown ballpark the Giants built. Prior to that the A's largely out drew the Giants. Really the Giants owe their success to MLB, who stepped in and lined up another ownership group to prevent the team from moving to TB, that then went and built that great ballpark.

    As for the tough-noogies approach to the A's giving up the territorial rights to SJ because they thought they'd control SF and Oak, its very self-serving. Which I don't blame Baer at all for trying to get what he can for it. But essentially Giants had better owners to begin with, the Bay Area would still be a split market. The A's would be building their SJ stadium right now. Just because Haas didn't give the rights up for altruistic purposes doesn't mean the A's should languish in purgatory indefinitely.

    I think MLB knows this and knows that it is in the best interest of the league to have a team in SJ, than Oakland or any other potential market.

  6. Read this again - this is why MLB "stepped in", don't give them too much credit - Local (and current) owners were found only after CBS (Larry Baer was their point man w/MLB) threatened to spend significantly less on the next TV contract if the Gi-ants moved to St. Pete - this was documented in "Stadium for Rent".
    "...built that great ballpark..." - you mean mallpark.
    "...Just because Haas didn't give the rights up for altruistic purposes doesn't mean the A's should languish in purgatory indefinitely..."
    Ever hear of common law marriage? Lew-Lew & Co. knew about the SC county situation when they bought in, they should have stood up at their first owners meeting and said "all bets are off".
    Instead they sat on their hands and want the Gi-ants to give 'em a get-out-of-jail-free card. A"$ do everything on the cheap (still making a profit) and they want to drag the Gi-ants down to their level.
    MLB does just fine with the situation as-is or this would have been finished by now.
    BTW - there's no other "potential market" available or that place would have been used as leverage by now. Some owners have learned from the St. Pete threat mistake.
    You're thinking like a fan, to really understand all this - try thinking like an owner.

  7. I understand all of this. There is no other viable market. Oakland questionable as a viable market as well. SJ is a viable market. Yes as an owner SJ has value. A price can always be put on something. See the Expos move to DC. Even closer to BAL, and that was not even a 2 team market to begin with.

    Haas screwed up in granting territory changes without any conditions.
    MLB screwed up by reaffirming those territory changes.

    Baer would be conceding something valuable. The only question here is how valuable, and when MLB will push this change through. Whether they decide to wait how ever long it takes for Baer to try to sell his team, with MLB forcing the change on the new owner, and covering the cost difference ala (HOU to the AL). Or do they broker some sort of settlement, between the A's and MLB, and the Giants. A third option would have been to restructure the ownership agreement to put more of the A's revenue sharing payouts onto the Giants, to at least motivate them to make a change.

    A's to SJ happens. When and what compensation the Giants/Baer get, TBD. You said yourself, there's no where else to go.