The One Law Professor Not Afraid To Defend Baseball’s Antitrust Exemption

Prof. Nathaniel Grow

The Legal Blitz caught up with Nathaniel Grow, an Assistant Professor of Legal Studies at the University of Georgia’s Terry College of Business. Grow, a cum laude graduate of Michigan Law School, teaches Legal and Regulatory Environment of Business and won the 2011 Outstanding Teacher Award from UGA. Prior to entering academia in 2009, Grow spent five years as an associate at Crowell & Moring, LLP in DC. His research is mainly in the areas of sports law, antitrust and intellectual property. Grow’s work has appeared in the Harvard Journal of Sports & Entertainment Law, American Business Law Journal and the U.C. Davis Law Review. All of Grow’s scholarly papers can be found here.

Your upcoming article is titled “In Defense of Baseball’s Antitrust Exemption.” You’ve written on this subject in the past too. So what sparked you to take the unique approach of defending MLB’s well-known and at times controversial exemption?

I approached this topic wanting to see whether MLB really operated any differently than the other major professional sports leagues, despite its antitrust exemption. I knew that the antitrust exemption hadn’t been treated kindly in the academic literature, but it nevertheless seemed to me that the differences between MLB’s operations and those of the other leagues were relatively minor. As I further explored the topic, the more I concluded that my initial inclination was correct, and ultimately argued that the exemption has had a minimal negative impact on the public.

Did you experience any particular challenges in writing this article, especially since academia is typically on the other side of the fence?

Whenever you question the common wisdom on a topic you want to make sure that you are thinking through all of the potential objections that those on the other side of the issue might raise. In that regard, preparing to write this article required that I take quite a bit of time reviewing the voluminous existing literature considering the exemption, not only from a legal perspective, but also from fields like economics and political science. Ultimately, though, I think that my article does a fair job of responding to all of the criticisms that have been levied against the exemption.

Congress has threatened MLB before with taking away the exemption. Do you think it will ever actually happen? What are some consequences if it did?

It’s a good question. Given that the exemption has survived this long, I think that the only way Congress would step in now and fully revoke the baseball exemption is if MLB engages in such blatantly anticompetitive conduct that Congress has no choice but to act. Because MLB greatly values its antitrust immunity, I don’t think that it will do anything that would risk Congress actually revoking the exemption.

With respect to what would happen if the exemption were revoked, I argue in my article that repealing the exemption would provide negligible benefits to the public. Specifically, MLB’s operations are substantially the same as those of the other major professional sports leagues, all of which are subject to antitrust law. While I acknowledge that each of the sports leagues engages in some anticompetitive practices, antitrust liability has done little to curb these practices. Therefore, I believe little benefit would be obtained by revoking the exemption.

On the flip side, however, I believe that some harm could be done by revoking the exemption. My article argues that Congress has routinely used the threat of revoking the baseball exemption to pressure MLB to provide valuable concessions to the public, many of which would not have been obtained simply by applying antitrust law to MLB. For example, although courts have never required sports leagues to expand against their will under antitrust law, Congress has been able to obtain this very same benefit from MLB by threatening baseball’s exemption. Specifically, every instance of expansion in MLB history has immediately followed a threat by Congress to repeal the exemption. By revoking the exemption, Congress would lose the ability to obtain these concessions from MLB. Moreover, the continued vitality of the minor leagues would potentially be threatened absent the antitrust exemption, a development which could negatively effect millions of baseball fans around the country.

This summer was the summer of professional sports labor unrest. Football got a deal done, do you think the NBA will salvage its upcoming season?

It’s tough to tell. The differences between the players and the NBA seem to be more significant than those in the NFL dispute. But both sides also have a lot to lose if the NBA misses an entire season. If I had to hazard a guess, I’d anticipate that the lockout costs the NBA some games, but not the entire season.

You’ve written a lot about antitrust matters. One issue that comes up every year is the BCS. Will the BCS format ever change? Do you think the government would ever step in to dismantle the BCS?

I think that it is inevitable that the BCS will eventually change. There is simply too much money to be made from a playoff. Whether that happens in 2014 or sometime further in the future is the tougher call in my mind. As for whether the government would ever intervene, that will be interesting to watch. Utah’s Attorney General insists he will file an antitrust suit against the BCS this fall, while the U.S. Department of Justice continues to investigate the system. If the DoJ filed suit, I expect the BCS would voluntarily modify its system rather quickly. Whether it would do the same in response to a suit by Utah is less clear to me.

How do you think the American Needle decision will impact the NFL long-term?

Ultimately I don’t think American Needle will have much of an effect on the NFL. American Needle effectively reaffirmed the status quo with respect to the antitrust regulation of the NFL, so I don’t anticipate much changing in the aftermath of the decision (I discuss this more in a forthcoming law review article titled “American Needle and the Future of the Single Entity Defense under Section One of the Sherman Act.”

After Michigan, you went to Crowell & Moring and now teach at UGA. What has the transition been like from student to a firm associate to a professor in such a short period of time?

I enjoyed my time at Crowell & Moring, but ultimately decided that academia was a better fit for me, given my interests. Both my parents were professors, so that helped ease the transition for me.

How did you get involved in sports law? Were you always interested in sports?

I’ve always been a sports fan, but my interest in sports law really comes from the fact that I believe sports leagues present a number of challenging and interesting issues under antitrust law. While I certainly have favorite teams that I follow, I personally don’t watch sports as often as most people would suspect given my research interests.

Finally, you’ve got the Big Ten, SEC and MAC covered, so who is winning the BCS title this year?

Another tough call. Given the SEC’s recent dominance, the smart money would appear to be on an SEC team winning the title yet again. Alabama is the conference favorite, but it wouldn’t surprise me to see another team come up from the pack to take the title, like Auburn did last year. It will be interesting to see how things unfold.

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