Public Financing of Baseball Stadiums: Understanding Extortion and its Remedies

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2009
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Haverford College. Department of Political Science
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eng
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Haverford users only
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Abstract
Major League Baseball has become an immensely profitable business, due in large part to its exemption from federal antitrust laws. This exemption was granted in 1922, and in later cases, the Supreme Court has specifically asked for Congress to address the business practices of MLB through legislation. If Congress chose to eliminate MLB 's antitrust exemption, they could do so very easily. However, in the interest of solving a more definite problem, the exemption should be threatened, but maintained in exchange for greater regulation. The more definite problem is that of public subsidization of baseball stadiums. Since 1990, American cities have provided more than $3 billion in public money to finance the construction of new facilities for privately owned baseball teams. This exorbitant figure rose from bidding wars in which MLB clubs threatened to move to cities that did not have an MLB club. These subsidy negotiations are full of misrepresentations on the part of MLB, and are buttressed by an artificial scarcity of teams, a byproduct of the antitrust exemption. The proposed solution to this problem is a third party organization made of non-profit-motivated shareholders receiving greater access to the finances of MLB clubs and the related business interests of MLB owners. After investigating these finances, this third party would then make non-binding recommendations to the city government on how to proceed in the subsidization negotiations with MLB clubs.
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