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Department of Justice seeks to limit MLB’s antitrust exemption

Mike Florio breaks down Commanders owner Daniel Snyder's decision to decline the House Oversight Committee's request for him to testify as congress continues investigating his team.

Although it involves a different sport and a much broader exemption from the federal antitrust laws, any effort by the federal government to restrict the Major League Baseball antitrust exemption should trigger at least a blip on the NFL’s radar screen.

Via the New York Times, the Department of Justice has submitted a filing in a case not directly involving the federal government regarding the scope of the antitrust exemption. The DOJ’s filing calls it an “aberration,” broader than the exemptions for other American sports leagues.

The underlying lawsuit relates to the elimination of more than 40 teams in the in a recent consolidation of Minor League Baseball. MLB has defended the case by citing the antitrust exemption.

For the NFL, the antitrust exemption applies only to broadcast deals. And it continues to be one of the main leverage points that Congress has over the NFL. The exemption allows the NFL to sell TV rights as a group, forcing networks to accept games involving the popular teams and the unpopular ones.

Without the exemption, each team would market the rights to its home games individually. Some teams (like the Cowboys) would generate billions more than others (like, well, they know who they are).

The broadcast antitrust exemption (here’s a great look at how it came to be) applies to what the Sports Broadcasting Act of 1961 calls a “sponsored telecasting” of games. That two-word phrase becomes potentially critical to the league’s pivot toward streaming -- starting with the exclusive Thursday night Amazon contract.

At some point, Congress may need to expand the exemption. Or maybe it won’t, forcing the NFL to deal with potential antitrust liability as it inevitably expands the practice of disseminating broadcast rights to companies that will broadcast the games over the Internet.

Regardless, the entire issue of antitrust exemption continues to be a potent advice for allowing sports leagues to behave like one combined business, even if they are in reality groups of separately-owned concerns.