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Subjecting Professional Baseball Clubs to the Antitrust Laws

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Subjecting Professional Baseball Clubs to the Antitrust Laws SUBJECTING PROFESSIONAL BASEBALL CLUBS TO THE ANTITRUST LAWS HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE EIGHTY-THIRD CONGRESS SECOND SESSION ON S. J. Res. 133 TO MAKE THE ANTITRUST LAWS APPLICABLE TO ,ROFESSIONAL BASEBALL CLUBS AFFILIATED WITH THE ALCOHOLIC BEVERAGE INDUSTRY MARCH 18, APRIL 8, MAY 25, 1954 Printed for the use of the Committee on the Judiciary * UNITED STATES GOVERNMENT PRINTING OFFICE ,52529 WASHINGTON 1954 COMMITTEE ON THE JUDICIARY WILLIAM LANGER, North Dakota, Chairman ALEXANDER WILEY, Wiscousin PAT McCARRAN, Nevada WILLIAM E. JENNER, Indiana HARLEY M. KILGORE, West Virgin& ARTHUR V. WATKINS, Utah JAMES 0. EASTLAND, Mississippi ROBERT C. HENDRICKSON, New Jersey ESTES KEFAUVER, Tennessee EVERETT McKINLEY DIRKSEN, Illinois OLIN D. JOHNSTON, South Carolina HERMAN WELKER, Idaho THOMAS C. HENNINGS, JR., Missouri JOHN MARSHALL BUTLER, Maryland JOHN L. McCLELLAN, Arkansas SUBCOMMITTEE ON ANTITRUST AND MONOPOLY LEGISLATION WILLIAM LANGER, North Dakota, Chairman ROBERT C. HENDRICKSON, New Jersey HARLEY M. KILGORE, West Virginiat EVERETT McKINLEY DIRKSEN, Illinois ESTES KEFAUVER, Tennessee CONTENTS Statement of- Page Barnes, Hon. Stanley W., Assistant Attorney General, Department of Justice ----------------------------------------------------- 2 Busch, August A., Jr., accompanied by John L. Wilson, Anthony A. Buford, Peyton Ford, H. Al. Stolar, Raymond E. Krings, and Jack C. Macheca -------------------------------------------- 95 Frick, Ford C ------------------------------------------------- 78 Garagiola, Joseph H., St. Louis, Mo ------------------------------ 42 Giles, Warren C ----------------------------------------------- 126 Johnson, Hon. Edwin C a United States Senator from Colorado .... 7, 68 Kintner, Hon. Earl W., g eneral Counsel, Federal Trade Commission- 33 Sullivan, Gael ------------------------------------------------ 128 I SUBJECTING PROFESSIONAL BASEBALL CLUBS TO THE ANTITRUST LAWS THURSDAY, MARCH 18, 1954 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The subcommittee met at 9: 30 a. m., pursuant to call, in room 424, Senate Office Building, Senator William Langer (chairman) presiding. Present: Senators Langer and Kilgore. Present also: Senator ATelker; Senator Johnson of Colorado; Tom Collins, professional staff member. The CHAnIRAN. The meeting will come to order. We have met to consider Senate Joint Resolution 133, to make the antitrust laws applicable to professional baseball clubs affiliated with the alcoholic-beverage industry. We will insert the resolution in the record at this point. (S. J. Res. 133 is as follows:) [S. J. Res. 133, 83d Cong., 2d sess.] JOINT RESOLUTION To make the antitrust laws applicable to professional baseball clubs affiliated with the alcohol-beverage industry Whereas baseball is America's national game, and has exemplified through the years the finest traditions of the combination of vigorous competition, athletic skill, and keen strategy; and Whereas baseball belongs to all the people of the United States, particularly the young people to whom it offers inspiration, teaches good sportsmanship, and boasts an outstanding record of honesty and integrity; and Whereas the recent Supreme Court decision in the baseball case decided in November 1953, placed baseball in a unique position with respect to the antitrust laws; and Whereas certain members of the alcoholic-beverage industry have acquired and are acquiring ownership or control of professional baseball clubs competing in organized baseball; and Whereas it appears that they are using professional baseball clubs as affiliates or subsidiaries to their main business of brewing and selling beer; and Whereas this unholy alliance engulfing our great game of baseball is having an unhealthy influence upon the youngsters of America who follow baseball with the closest interest and who emulate its heroes with youthful enthusiasm; and Whereas the possession by firms engaged in the alcoholic-beverage industry of equities in professional baseball clubs results in the exploitation of baseball exhi- bitions as sales vehicles for the promotion of the monopolization of the brewing business: and Whereas in the period from 1937 to 1953 the number of companies engaged in the brewing of beer declined from 700 to 300 although the national consumption of beer doubled, and the number of breweries continues to decline; and Whereas only 25 brewing companies now account for the major portion of all beer sales in the United States, and are progressively gaining a stranglehold on the industry; and 2 SUBJECTING PROFESSIONAL BASEBALL TO ANTITRUST LAWS Whereas the concentration of the beer business in the hands of a few large breweries and the destruction of the small local breweries are accelerated by the operation of professional baseball franchises as an adjunct of such monopolies; and Whereas professional baseball itself becomes a business instrumentality when it is employed as an adjunct to or as an affiliate of a business such as the alcoholic- beverage business, for the purpose of expanding that business, promoting its sales, or increasing its profits; and Whereas Ford Frick, Commissioner of Baseball, whose function It is to protect the great public interest in professional baseball, recently stated, "I believe that all men in baseball, players and operators alike, must give more thought to their public responsibility and less to their selfish interest"; and Whereas Commissioner Ford Frick, when speaking of the Supreme Court de- cision of November 9, 1953, said the decision "does not mean that baseball is granted a license to do as it pleases"; and Whereas George Trautman, president of the National Association of Profes- sional Baseball Clubs, stated that everyone in baseball has the responsibility "to guard the game, its spirit, its mighty contribution to succeeding generations of our youngsters as clean recreation, as a teacher of fair play, and as an example of fair, yet earnest competition"; and Whereas the public interest demands that baseball, because of its unique role in the American way of life, be fully protected from any exploitation for selfish business purposes; and Whereas the Supreme Court on November 9, 1953, in Toolson against Yankees, held "that if there are evils in this field [professional baseball] which now warrant application to it of the antitrust laws it should be by legislation": Now, therefore, be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That any professional baseball club engaged in competition in organized baseball which is owned directly or indirectly, in whole or in part, by any individual or organization engaged in the production or sale of any alcoholic beverage is hereby declared to be subject to the antitrust laws, as such laws are defined by section 1 of the Clayton Act (15 U. S. C. 12). The CHAIRMAN. Mr. Barnes wants to testify first. He has another appointment. Mr. COLLINS. Judge Barnes, would you go ahead, please? We are considering Senate Joint Resolution 133, a resolution making the antitrust laws applicable to professional baseball clubs affiliated with the alcoholic-beverage industry. STATEMENT OF STANLEY W. BARNES, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF JUSTICE Mr. BARNMES. Mr. Chairman, I have received a letter from you dated March 16, 1954, and I can answer part of the questions therein. Do you desire me to answer those first? The CHAIRMAN. Whatever you wish to do, Mr. Barnes. Suit your- self. Mr. BARNES. All right. That letter, requesting testimony relative to this bill, says: It is hoped that your testimony will include a discussion of the scope of the Supreme Court's decision in the so-called Baseball case and the Shubert and the International Boxing Club cases. The baseball cases are pretty well known. In the earlier baseball case, Federal Baseball Club versus National League, the distinction that is essentially relied upon by the Supreme Court, differentiating baseball from other forms of business, is in the last paragraph, wherein the Court states that the distinction insisted upon is that the transportation across State lines is a mere incident and not the essenial thing in baseball and, hence, rules that it is per- SUBJECTING PROFESSIONAL BASEBALL TO ANTITRUST LAWS 3 sonal effort which produces baseball, and personal effort not'related to production is not a subject of commerce, and transportation does not make it part of commerce. The so-called second baseball case, the Toolson case, is, of course, very limited in its scope and points out that by reason of the first baseball case Congress has had the opportunity or a period of many years to determine whether or not such business, that is, baseball, should be legislated upon as to whether or not it comes under the antitrust laws, and points out that during the 30 years since the first decision Congress acted on the understanding that baseball was not subject to existing antitrust legislation. Parenthetically, it might be pointed out here that it is my under- standing that several bills have been introduced in the Congress dur- ing thtat period which contemplated the exemption of baseball from antitrust impact, which would indicate that, to some Members of Con- gress, at least, baseball during that period of time was subject to the antitrust laws; otherwise there would have been no point in the con- sideration of such bills proposing to exempt them. The Court in the second baseball case, Toolson versus New York Yankees, states that it does not reexamine the underlying issues, but affirms, on the authority of the previous decision, that Congress had no intention of including the business of baseball within the scope of the Federal antitrust laws. I won't go into the minority opinion of two Justices who hold to the contrary. As a result of that Toolson case, Judge Knox, an eminent jurist of our New York area, on his own motion-and I think that is impor- tant-brought up the matter of the impact of the baseball case upon the so-called Shubert case, which technically is United States against Lee Shubert, pending on appeal now from the southern district of New York Civil No.
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