On the eve of another congressional hearing on Major League Baseball, Rep. John Conyers Jr. of Michigan is trumpeting a growing sentiment to revisit baseball's antitrust exemption and predicting the demise of Commissioner Bud Selig.
"Selig is on the downside," Conyers said last week. "He's seen his best days. Baseball needs [to] level with Congress and the American people without acting like a bunch of rich, pompous, spoiled brats."
Conyers was a vocal critic of Selig the last time hearings were held, following the World Series. The ranking minority member of the House Judiciary Committee, he grilled the commissioner about Major League Baseball's rush to eliminate two franchises.
This week as baseball moves to the Senate side, Conyers isn't the only critic. There's a growing sense around Washington among both House members and senators that what remains of baseball's antitrust exemption following a 1998 modification deserves a new look. They wonder what baseball has done recently to confirm its status as the national pastime, and not merely another profit-making entertainment venture.
That question is what will drive these Senate Judiciary Committee hearings, which are scheduled to begin Wednesday. "My understanding is that it's going to be a legal examination of the exemption, and the arguments for and against," said Larry Lucchino, part of the new Red Sox ownership group and a former Padres and Orioles minority owner and executive.
How baseball allowed the exemption to be put on the legislative table is a study in bad public relations. Consider that Conyers, a 19-term Democrat with a strong interest in labor issues, began last year's hearings merely looking to slow the headlong rush toward contraction until he could determine if it was in the public interest. Having heard and digested Selig's sworn testimony, he now wants to get rid of baseball's exemption from antitrust laws, and Selig, too.
"It wasn't any brilliant cross-examination that we did," Conyers said of Selig's November testimony, which rivaled Casey Stengel's from a previous generation for artistic obfuscation. "He talked himself into damaging not only his case, but his own reputation. He has said more to hurt baseball than anyone else in America."
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Congressional testimony from MLB Commissioner Bud Selig (left) in November helped push Rep. John Conyers Jr. (right) into opposing the exemption. “ He talked himself into damaging not only his case, but his own reputation,” Conyers said. |
"I heard the commissioner on NPR, and I heard him testify under oath," said first-term Democratic Rep. Betty McCollum. "He said baseball is just like any other business. Well, then, commissioner, baseball must be treated like any other business."
McCollum happens to represent St. Paul, Minn., which stands to lose the Twins if Selig's contraction plans ever get enacted. You'd expect her, and the rest of the Minnesota delegation, to support more governmental oversight of MLB, and they do.
On the Senate side, Minnesota's Paul Wellstone has authored a bill stripping MLB of the antitrust exemption. Faced with the imminent demise of the Twins, it was the least he could do.
But it isn't just Minnesota anymore. In Washington, legislators tend to have their fingers to the wind, and a stiff wind is beginning to blow. With Enron developing into a full-sized scandal, nobody wants to be caught mindlessly defending big business at the expense of the little guy. It is interesting to see that the co-sponsors of a bill similar to Wellstone's on the House side include Utah's Jim Matheson, Oregon's Earl Blumenauer, two Kansas Democrats, and South Dakota Republican John Thune, none of whom has a big-league team at risk.
One lesson of the Enron scandal is that close ties to the president weren't enough to save the company. And the moral support of the former Texas Rangers' managing general partner might not save baseball's antitrust exemption, nor his friend Selig, either.
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Sen. Mike DeWine of Ohio, a huge baseball fan, may be a player in MLB’s future. |
Conyers believes that baseball must somehow be held accountable to the American people, which it currently isn't because of a 1922 Supreme Court case. That case essentially said that baseball was a sport, not a business, and wasn't bound by restraint of trade laws that govern other businesses, including the other three major sports leagues.
This is important to baseball's owners because it means they can operate the sport, in effect, like branch offices of a single company, rather than 30 competing entities bound by laws that govern restraint of trade. That means they can expand, contract, move teams and decide to share or not share revenue without the threat of losing a lawsuit. "If they're any other business, they can't secretly meet and decide to eliminate a couple of teams unilaterally," Conyers said. "General Motors cannot meet with Ford and decide to eliminate Chrysler. That's collusion."
Dissatisfied with the commissioner's responses under oath the first time, and smelling blood besides, Conyers has repeatedly asked his committee chairman, Republican James Sensenbrenner of Wisconsin, Selig's home state, to hold additional House hearings. Sensenbrenner, who has known Selig since childhood, maintains that nothing has changed since the last hearings.
To Conyers, at least two events of note have occurred since Selig performed his oratorical tap-dance in the plush leather chair of the committee room. First, the secret loan that Selig obtained from Twins owner Carl Pohlad back when Selig was still the owner of the Brewers was revealed. Not only is that loan a clear violation of baseball's bylaws, it made Selig's determination to contract the Twins, essentially buy out Pohlad's team for $50 million more than its book value, smell even fishier than it did already.
The day details of the loan became public, Conyers put one and one together and called for Selig's resignation. "His integrity, his veracity, has been seriously compromised," Conyers reiterated last week. "So I want to tell you, it's just a matter of time with him."
Since the House hearings, too, the Red Sox franchise and other component parts sold for in excess of $660 million, and that wasn't even the highest bid. Today, Conyers asks his fellow congressmen to examine the ownership group that was awarded the Red Sox, despite the presence of higher bids.
One of the new owners, John Henry, seemed stuck with the Florida Marlins, another team baseball has hinted may be headed for contraction. Henry had done everything to make his market viable, according to Selig, which basically meant proposing that taxpayers help him fund a new stadium, then wringing his hands when they demurred. After paper losses of millions of dollars, Henry desperately needed an exit strategy.
As it turned out, he exited right out the front door, while sneaking back into the owner's club through the side door. Now he has the Red Sox, who also want a new, publicly funded stadium, as well as their lucrative NESN television network. He remains a Selig loyalist, and it isn't hard to imagine why.
Another of the new Red Sox owners is George Mitchell, once the Senate majority leader, who helped craft MLB's blue ribbon report that claimed baseball was in so much trouble. This guy literally wrote the book on baseball's troubles, then bought his way in. "Sounds like he took his own advice pretty seriously," Conyers snickered. "I'd like to call George Mitchell to Washington to explain. That would be an nice conversation."
As the baseball issue moves to the Senate side — the gentlemanly side, by reputation — don't expect Patrick Leahy, the Vermont Democrat chairing the proceedings, to be nearly as harsh as Conyers, an extremist by nature who doesn't waste time on the margins of too many issues.
Still, baseball is taking the threat seriously, according to Lucy Calautti, MLB's Washington lobbyist. "When baseball made this tough decision to pursue contraction — a decision it had to make — we knew it would be controversial," Calautti said. "And, let's face it, that's the reason these hearings are being held. It's not because we want to share more revenue. It's because we made the tough economic decision to contract."
Though she labors in relative obscurity, Calautti might well be pinpointed as the single reason that the antitrust exemption has survived this long. A Washington-based employee of the Cleveland law firm Baker & Hostetler LLP, Calautti isn't an attorney, but she's praised by legislators and staffers of both parties as one of the smartest and ablest lobbyists around. She's also well-connected in the Senate, which comes in handy. She's the longtime chief of staff for North Dakota Sen. Byron Dorgan, a Democrat, and she's married to the state's other senator, Democrat Kent Conrad.
Calautti perceives any public exposure as an opportunity to spread the message, even when the tin-tongued Selig is the messenger. The message she's helping to craft for this week is all about competitive imbalance. "We see this as an opportunity to talk about what really needs to be done to make our industry economically healthy," Calautti said. "About the economic imbalance between the have and have-nots, between a Kansas City and a New York, and how we want to make things better for smaller and medium-market clubs."
Like a campaign speech, it is designed to spin the opposition's message, which in this case is that baseball's rich get richer, while the poor get richer, too. Even the owners who can prove an operating loss gain tens of millions of dollars in equity growth.
Calautti, who grew up "in the shadow of Shea Stadium, a Queens girl riding the No. 7 train," is struck by what she sees as the lack of partisanship on this issue. While she knows of sentiment on both sides of the aisle to act against the antitrust exemption, she's quick to point out that her side has strong support among not only the typically pro-business Republicans, but pro-labor Democrats, too.
It doesn't hurt baseball's cause that the Democrat who owns a big-league franchise, Herb Kohl of the NBA's Milwaukee Bucks, sits on the Senate Judiciary Committee. And it also doesn't hurt that President Bush is a former member of the owners' club, though Calautti says she has not yet had any contact with the White House.
"Baseball invokes the strongest passions in people," Calautti said. "Members of Congress are baseball fans, and they view this issue passionately. Soccer just decided to contract two clubs, and no one noticed." She believes that after detailed hearings and some harsh rhetoric, no action will be taken. "I don't think the members of Congress will make that mistake," she said.
As usual in such matters, the most probable scenario lies somewhere between the two extremes. Selig probably won't be gone by Opening Day, but this time Congress may not sit back and do nothing, either.
Keep your eye on Sen. Mike DeWine, a Republican from Ohio and a huge baseball fan. In November 2000, DeWine's Senate Judiciary Subcommittee on Antitrust, Business Rights and Competition held a hearing on baseball. Selig testified, as did Mitchell, but so did George Will and Bob Costas, showing a willingness on DeWine's part to get deeper than the official story.
At that time, a full year before the specter of contraction was introduced to the American public, DeWine articulated his concerns about baseball's lack of accountability. "As with any major multibillion-dollar enterprise, the federal government has a role, albeit a delicate one, in making sure that businesses are run in a manner that is consistent with the law and is good for the consumer," he said.
DeWine isn't likely to embarrass Selig, but he doesn't want to stand by idly and watch his favorite sport ruin itself. "I am concerned about the future ability of Ohio's teams, the Cleveland Indians and the Cincinnati Reds, to compete with big-money teams like the Yankees, the Braves and the Diamondbacks," DeWine said. "Building new ballparks ... is a short-term fix. They do not solve revenue disparities in the long term."
And if baseball is foolish enough to lose even a week of the season to a labor stoppage, whether by lockout or strike, the consequences on Capitol Hill may be severe. In that case, the conflation of MLB into Enron is completed. The sport becomes shorthand for duplicity, irresponsibility, and just not getting it.
"There's a steady drumbeat going already, and if there was to be a lockout, that steady drumbeat would grow to a roar," Conyers said.
Other sports don't have repeated work stoppages, he points out. "Only baseball. And only baseball has an antitrust exemption. What does that tell you?"
Bruce Schoenfeld (schoenfeld@prodigy.net) is senior correspondent for SportsBusiness Journal.
