FACT: The professional sports industry is a self-regulating monopoly.
Monopoly. Antitrust. Restraint of trade. For years those loaded words have been lobbed like mortar rounds at the oak-paneled bunkers of sports management. Monopolistic control is the cornerstone on which the sports industry has been built and from which all of its benefits, both financial and competitive, are derived. Moreover, it is the only self-regulated monopoly in America. Unlike the broadcasting and airline industries, whose monopolistic practices are regulated by the Federal Communications Commission and the Federal Aviation Administration, respectively, the sports business has been left to referee itself.
To understand how and why this comfy arrangement has come about takes some hacking through legal and political thickets, but the trip is worth it. Suffice it to say that this Fact is so crucial to Moneyball that the fan should forget the boom-a-lackas and concentrate on a new mantra: mo-nop-o-ly, mo-nop-o-ly.
Many owners, ever protective of their Boardwalks and Park Places, strive mightily to convince the public that they are playing some other game. They have their own chants. Jerry Hoffberger does whole oratorios, equating his needy Orioles with the Baltimore City Orchestra as a community cultural asset. In Gene Klein's rhapsody, his San Diego Chargers are not engaged in anything so crass as turning a buck; they are, he says, celebrating an "art form." Usually, though, the monopolists fall back on a classic all-purpose fudge that was first used in baseball: "It is too much of a sport to be a business and too much of a business to be a sport."
The sports industry is indeed schizoid. While, financially speaking, General Motors does not care one toot if it drives Ford into the emergency lane, the Montreal Canadiens have a lot to lose by overwhelming the Washington Capitals on the ledger books as well as on the ice. Rivals in combat, they are also partners in a group venture called the NHL.
Just as you cannot be a bully if there is no one to pick on, a team obviously cannot flourish if it drives all or most of its rivals out of business. So the big guys theoretically have to pull their punches; they slap the little guys around just enough to keep them in their places, but not so hard as to put them away for good. Unless, of course, some pipsqueak rival league tries to invade the big guys' turf. Then, watch out, because that's when the heavyweights in the established league go for the clubs and tire chains.
Thus the owners are tugged in two directions at once. To keep their cross purposes from clashing requires a pliancy and objectivity that few of them possess. To protect themselves from one another, therefore, the owners operate as a cartel, an economic entity in which a group of firms (teams) within the same industry (league) make agreements on matters of mutual interest (rules, expansion, promotion, schedules, etc.). Such agreements are illegal in most other U.S. businesses, because they tend to lead to nasty things like collusion, price-fixing and restraint of trade.
Unregulated as they are, owners ask that the public accept their actions as being in good faith. Critics like Ohio Congressman John Seiberling are unwilling to grant that acceptance. An antitrust lawyer and one of the many federal legislators who have introduced bills that would put an end to the owners' monopolistic privileges, Seiberling says, "Whenever artificial barriers are created to the normal forces of the marketplace and free enterprise, the American people end up paying a higher price and getting less of the commodity."
All of which gives rise to the big question about the sports industry: is it a sport and, therefore, something so unique that its survival requires special hands-off treatment under the law; or is it a business and, therefore, something so commercial that it should be subject to the same restraints imposed on other profit-making enterprises? Asked that very question during a congressional hearing, Bowie Kuhn, scrambling like a runner caught between third and home, concluded, "We are a sports business."
Baseball has good reason for wanting to have it both ways. By a venerable decree of the United States Supreme Court, it is the only professional sport that is exempted from antitrust laws. Because the reasons for this singular honor have long confounded the nation's legislators and the Justice Department's lawyers, pro football, basketball and hockey have also benefited, by default, from the same exemption. Explains Congressman Frank Horton of New York, a member of the 1976 House Select Committee on Professional Sports, "Basically, all four sports enjoy an immunity—baseball because it is immune by judicial decision, and the others because the executive branch and the Justice Department just have not really followed up and tried to enforce the antitrust laws...."