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ALLAN H. SELIG, Plaintiff-Appellee, V. UNITED STATES of AMERICA, Defendant-Appellant No

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ALLAN H. SELIG, Plaintiff-Appellee, V. UNITED STATES of AMERICA, Defendant-Appellant No ALLAN H. SELIG, Plaintiff-Appellee, v. UNITED STATES OF AMERICA, Defendant-Appellant No. 83-2330 UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT 740 F.2d 572; 1984 U.S. App. LEXIS 20104; 84-2 U.S. Tax Cas. (CCH) P9696; 54 A.F.T.R.2d (P-H) 5784; 16 Fed. R. Evid. Serv. (Callaghan) 196 July 27, 1984 PRIOR HISTORY: overhand pitching and the switch to a cork-center base- ball in 1911 were two of the final major steps toward the Appeal from the United States District Court for the game as we enjoy it today. Eastern District of Wisconsin. No. 81 C 334 -- John W. Reynolds, Judge. COUNSEL: David E. Beckwith, Foley The National Association of Professional Base-Ball & Lardner, E. Wisconsin Milwaukee, Wisconsin, for Players was born in 1871. In the first recorded profes- Plaintiff. sional game, the Kekiongas franchise of Fort Wayne de- feated Forest City of Cleveland, 2 to 0. Franchises cost Gayle P. Miller, Tax Div., Dept. of Justice, Wash- $10. Notably, the White Stockings of Chicago led the ington, District of Columbia, for Defendant. league throughout the season and appeared headed for JUDGES: Bauer and Coffey, Circuit Judges, and the pennant until an accident in Mrs. O'Leary's barn de- Fairchild, Senior Circuit Judge. stroyed their ball yard along with most of the city. Forced to play their remaining games on the road, the White OPINIONBY: BAUER Stockings lost three straight games and the flag to the OPINION: BAUER, Circuit Judge. Athletics of Philadelphia. The birth of the National League in 1876 spelled the end of the National Associa- The government asks this court to overturn the dis- tion. The new Chicago franchise ran away with the pen- trict court's ruling in favor of Plaintiff Allan “Bud” Selig, nant in the inaugural season. The American League be- part owner of the Milwaukee Brewers. The district court gan in 1901, the result of the nation's yearning for more held that Selig properly allocated $10.2 million of the baseball and the NL's reluctance to expand. Again, a $10.8 million purchase price of the Seattle Pilots to the Chicago franchise helped lead the way. The White Sox, value of the 149 players he bought. We affirm. headed by AL co-founder Charles Comiskey, won the I first-ever AL game and went on to win the league crown. In the first interleague World Series in 1903, Boston, led The theory of the game is that one side takes the to the pennant by Denton True “Cy” Young's3 32 wins, field, and the other goes in. The pitcher then delivers the beat Pittsburgh in a best five-out-of-nine series.4 ball to the striker, who endeavors to hit it in such a direc- tion as to elude the fielders, and enable him to run Baseball abounds with legendary players,5 teams, around all the base lines home without being put out. If and events. Some of the greatest memories include Willie 1 he succeeds a run is scored. This year the United States celebrates the centennial (1947). of a momentous event in its grand sports history: the 3 Y is for Young introduction of overhand pitching into major league The Magnificent Cy; baseball. Although organized baseball and the games People batted against him, 2 But I never knew why from which it derived had been played for many years, Ogden Nash 4 Baseball's first intracity World Series and greatest World Series upset occurred in 1906. The Chicago White Sox, who had strung together 19 1 Encyclopedia Britannica, 1890. victories to steal the AL crown from New York, stunned the mighty 2 In fact, archeologists have discovered etchings carved almost 4,000 Chicago Cubs, who reigned supreme in the NL from 1906 through years ago of women playing ball, and one prominent historian believes 1910 behind the tough defense of Steinfeldt, Tinkers, Evers, and that all modern ball games evolved from ancient religious rites intro- Chance, and who had won a league-record 116 games in 1906. duced 5,000 years ago or more. R. Henderson, Ball, Bat and Bishop 5 See Flood v. Kuhn, 407 U.S. 258, 262-63, 32 L. Ed. 2d 728, 92 S. Ct. Keeler's 44-game hitting streak in 1897; Jack Chesbro's Allan Selig and others organized the Milwaukee Brewers 41 wins in 1904; the 1907 batting title to Ty Cobb -- his Baseball Club, Incorporated in an effort to secure another first of 12; Christy Mathewson's 68 innings without franchise for the city. The organization negotiated unsuc- walking a batter in 1913; Babe Ruth hitting 29 home cessfully for the purchase of the Chicago White Sox. runs in 1919, 54 in 1920, 59 in 1922, and 60 in 1927 -- In the meantime, the American League voted to add all league records; Jim Bottomly hitting in 12 runs in a 9- two expansion teams to begin play in 1969. The league inning game in 1924; Ruth calling his shot in the 1932 awarded the franchises to organizations in Kansas City Series; a 1940 Opening Day no-hitter for Bob Feller; Joe and Seattle. Among other expenses, the Seattle Pilots and DiMaggio's remarkable 1941 season:.357, 30 home runs, the Kansas City Royals each paid $5.25 million for thirty 125 RBI, and the 56-game streak; Enos Slaughter scoring players ($175,000 each) acquired from the ten other AL from first on a single to break an 8th-inning tie in the teams through an expansion draft, and $100,000 for their seventh game of the 1946 Series; Connie Mack bowing franchises. In anticipation of getting its franchise, the out in 1950 after 50 years as the Athletics field general; Seattle organization bought the Seattle Angels, a AAA “the catch” by Willie Mays robbing Vic Wertz in the minor league club, and signed a working agreement with 1954 Series; Roger Maris's 61st home run in 1961; the another minor league club in Newark, New York. perfect Sandy Koufax on September 9, 1965; Hank Aaron's momentous blast on April 8, 1974; and countless The Seattle Pilots played ball from April to Septem- others. And true baseball fans know of the ill-fated ca- ber 1969, but sunk into financial difficulties with oper- reers of Ray Chapman and Wally Pipp.6 ating expenses of more than $3.7 million. As a result, the Pilots' owners decided to sell the team. Selig learned of II the Pilots' financial plight and contacted the team own- A tonic, an exercise, a safety-valve, baseball is sec- ers. By September 1969, the parties tentatively agreed ond only to Death as a leveler. So long as it remains our that Selig would buy the Pilots, including 149 players, national game, America will abide no monarchy, and for $10.8 million. anarchy will be too slow.7 The deal was conditioned on Selig's organization The first franchise shift of this century occurred (the Brewers) securing league approval to move the team when the Boston Braves moved to Milwaukee in 1953. from Seattle to Milwaukee. That approval did not come The Braves were a financial success, drawing more than immediately. Instead, the American League first tried to two million fans each year from 1954 to 1957. This save the Pilots with league money. The league's efforts prosperity contributed to the development of baseball on failed, and Seattle, at the suggestion of the Brewers' law- television. The Braves won the World Series in 1957 yers, petitioned for bankruptcy in March 1970. (defeating the almost invincible New York Yankees), and Meanwhile, the Brewers and the Pilots on March 8 repeated as pennant winners in 1958. signed a written contract for the purchase and sale of the The Braves' fortunes changed, however, in the early Pilots for $10.8 million. The deal was stymied by the 1960's. Attendance and the team's standings slid. New league's continued reluctance to approve the move to owners acquired the team in 1962, but, although atten- Milwaukee. The bankruptcy court rescued the deal, how- dance rose, the team finished in sixth place in 1963 and ever, by ordering the sale of the Pilots by April 1, 1970, fifth in 1964. The Braves moved the team to Atlanta, and on that day the transaction was completed. The Mil- Georgia, in 1966, leaving Milwaukee without a major waukee Brewers played their first game six days later. league franchise. The State of Wisconsin's efforts to stop The contract between the Pilots and the Brewers al- the move failed. See State v. Milwaukee Braves, Inc., 31 located $100,000 of the purchase price to equipment and Wis. 2d 699, 144 N.W.2d 1, cert. denied, 385 U.S. 990, 17 supplies, $500,000 to the value of the franchise including L. Ed. 2d 451, 87 S. Ct. 598 (1966).8 In 1965, Plaintiff league membership, and $10.2 million to the player con- tracts. The $100,000 allocation is not contested. In the 2099 (1972). fall of 1970, the Brewers solicited four separate apprais- 6 Ray Chapman, star shortstop of the Cleveland Indians, was killed by a als of their 149-man roster as of April 1, 1970. The ap- pitch thrown by Carl Mays on August 17, 1920. Wally Pipp, complain- praisals established an average value of $10,043,000, and ing of a headache, was replaced at first base by Lou Gehrig on June 2, the Brewers' financial officer decided to retain the $10.2 1925.
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