Atlantic Cities

Can San Jose Really Sue Its Way to a Major League Baseball Team?

Can San Jose Really Sue Its Way to a Major League Baseball Team?
Stephen Lam/Reuters

For one of America's ten largest cities, San Jose keeps an unusually low profile. It is the largest U.S. city without an NFL, NBA, or MLB team, that benchmark of big-city legitimacy ensuring daily attention on TV and in the sports pages.

Last week, San Jose moved to remedy that, filing a lawsuit against Major League Baseball for stalling the Oakland A's move to relocate to a plot of land just west of San Jose's Diridon Station.

San Jose wants the A's, and has reserved a discounted plot of public land for the team. The A's have been able to raise $500 million to build a new stadium there. As if on cue, a sewage backup problem at the aging Oakland Coliseum forced the A's and Mariners to share a locker room last week.

So what's the problem?

In the iron geography of baseball markets, San Jose belongs to the San Francisco Giants, a fact that both Wolff and the owners of the Giants knew when they bought their respective Bay Area teams. Without the approval of three-quarters of MLB franchises, only one baseball team is freely allowed to move to the south end of the bay, and it's the Giants.

The reasons for this are complex and not entirely consistent. Baseball, unlike the other major professional American sports, enjoys wide-ranging exemption from antitrust laws. This exception originates with a 1922 Supreme Court case, in an opinion delivered by former amateur baseball player Oliver Wendell Holmes, which established that baseball does not qualify as interstate commerce. That MLB teams travel across state lines to play, the court ruled, was merely incidental. Relevant decisions since then have modified, though not fundamentally altered, the MLB's exceptional position.

Thus, the MLB maintains control over franchise geography that is unparalleled in professional sports, preserving monopolies in some places and rivalries in others. An added irony in this case is that Oakland is actually much closer than San Jose to San Francisco.

Joe Cotchett, the lawyer representing the city of San Jose, thinks baseball's exemption is ludicrous. "This is all about economics," he told a local ABC affiliate. "And, you have a city like San Jose, the tenth largest city in the United States, cannot get a baseball club. I can name you other cities that are pulling for San Jose for the same reason. They want the right and the chance to bring a baseball team to their city, their county, whatever it might be."


Rendering for Cisco Field, San Jose. 360 Architects.

The MLB maintains it has a right to coordinate team locations. "The lawsuit is an unfounded attack on the fundamental structures of a professional sports league," the MLB said in a statement. (A's owner Wolff has said he is not in favor of legal action, despite his desire to move the team to San Jose.)

If the case winds up in the Supreme Court, the league's exemption might be evaluated on the nature of baseball competition. Ira Boudway, writing in Bloomberg Businessweek, puts it like this:

"...the argument will likely revolve around whether the Giants and A’s are more like McDonald’s and Burger King—genuine rivals duking it out for market share—or more like the Sharks and the Jets in West Side Story, pretend rivals in the same show who are duking it out for our entertainment and their shared profit."

But the whole situation is even weirder than that, because nobody believes that baseball is not interstate commerce. Not even the Supreme Court.

In fact, the Court has revisited baseball's peculiar status twice before, pointing out that its anti-trust exemption is an aberration and an anomaly. Despite that, they've punted on the issue, leaving it to Congress to change the law.

For this reason, it's unlikely that they'll revise the 1922 decision this time around or ever, says Daniel Lazaroff, a professor at Loyola Law School in Los Angeles. "I think that the plaintiffs are going to have a very difficult time overcoming baseball's antitrust exemption," he says. Sound or not, the exemption has stood for nearly 100 years and weathered three relevant Supreme Court decisions. In the meantime, an entire industry has developed around it.

How has it shaped baseball? At first glance, it might appear the answer is: not much. Baseball, football, and basketball share pretty similar distributions of teams. But whereas the NFL and NBA have only partial control over league geography (the NFL couldn't stop the Raiders from moving to L.A. in 1982, for example), the MLB's authority is much greater. The A's currently would require the support of 75 percent of owners to back a move.

That said, the MLB isn't exactly anti-mobility. Theoretically, the league could use its power to strip legitimacy from professional sports teams' favorite ultimatum, in which a franchise threatens to move unless a sizable amount of public money is forked over for stadium construction costs. Instead, the MLB seems to encourage the practice, so long as no one's market share is being violated.

As a result, America's professional sports leagues don't look very different from one another. Teams follow the money.

What the exemption really does is protect established franchises from competition. In the mid-'00s, for example, Baltimore Orioles owner Peter Angelos was worried the Montreal Expos move to Washington D.C. might cut into the Orioles' revenue base. The Expos did become the Washington Nationals, but Angelos leveraged his concern into a new television network, MASN, that carries the games of both teams but whose finances are remarkably, controversially favorable to Angelos and his Orioles.

With that precedent, it seems unlikely that San Francisco Giants majority owner Charles Johnson would settle for less. Even if San Jose is five times farther from AT&T Park than Oakland is, a new ballpark and a good team could pull much of Silicon Valley into San Jose's camp -- not to mention the Giants' territory that currently extends as far south as Monterey. It's not likely Oakland fans would switch to the Giants, either.

But San Jose is putting up a nice plot of land for a new baseball stadium. Even if the city's lawsuit goes nowhere, subsidized land downtown, a big TV deal, and a buzz-worthy ballpark are all things the MLB likes.

Top image: Stephen Lam/Reuters.

Henry Grabar is a freelance writer and a former fellow at The Atlantic Cities. He lives in New York. All posts »

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