Last year, several baseball fans sued MLB, MLB Advanced Media, Comcast and several of its regional sports networks (RSNs), and DirecTV and several of its RSNs, claiming that the Blackout Policy violates federal antitrust law. The plaintiffs allege two types of antitrust violations. First, that MLB’s division of the United States into exclusive broadcast markets reduces competition because RSNs need not compete with each other to broadcast games in their local markets. And second, that MLB has monopoly power over the rights to broadcast out-of-market games and it uses that power to limit out-of-market viewing to either Extra Innings or to MLB.tv. The lawsuit contends that absent these restraints, RSNs would compete with each other to broadcast “out-of-market” games in other parts of the country, making games more accessible and more affordable.At first blush you might think, “How can a lawsuit like this succeed? MLB has an antitrust exemption.” To an extent, it does. But that exemption is court-created and it dates to the early 20th Century and has origins in the reserve clause. MLB has been careful in recent years not to exert the exemption to justify collective decision-making, for fear Congress would overturn the courts and eliminate the exemption completely.MLB did try to have the case tossed out soon after it was filed. But the presiding judge — U.S. District Judge Shira Scheindlin in New York — rejected those arguments and found the plaintiffs had stated plausible antitrust claims. You can read a copy of the court’s decision here.
