An administration official urged Congress to end baseball's antitrust exemption and the National Football League was described as rich and powerful monopoly that has eliminated the economic rewards for winning as a House subcommittee opened hearings yesterday on the application of antitrust laws to professional sports.
Abbot B. Lipsky Jr., deputy assistant attorney general in the Justice Department's antitrust division, told the House Judiciary Committee's subcommittee on monopolies and commercial law that the department historically has held that professional sports teams are businesses and, as such, should be held fully accountable under the antitrust laws, as is any other industry.
"We see no economic or other justification for special treatment of baseball," Lipsky said. "It has been the position of the antitrust division for some time that baseball's exemption is an anachronism and should be eliminated. I reaffirm that position today."
Ed Garvey, executive director of the National Football League's players association, told the committee that the resources of the NFL are so vast that collective bargaining "does not necessarily promise protection for the athlete-employe" and said that in recent years the ability of free agents to move from one team to another has been effectively held at zero.
Garvey and Lipsky were the leadoff witnesses as the subcomittee began three days of hearings aimed at compiling a comprehensive record on current applications of federal antitrust laws to professional sports and a complete set of recommendations for treatment of professional sports under those statutes.
Rep. Peter W. Rodino Jr. (D-N.J.), the subcommittee chairman, said that among the issues to be explored will be "baseball's exemption from the antitrust laws, league restraints on purchase and sale of sports franchises, denial of expansion franchises to interested investors and cities, league or club control of stadiums, restraints that intrude on newly formed leagues, territorial restrictions and limitations on the movement of franchises, controls on a player's entry into a league and freedom of movement among teams, and the antitrust aspects of television contracts and sports broadcasting."
He said the subcommittee would attempt to steer clear of issues that are a subject of negotiation in the major league baseball strike, which enters its 34th day today, nor would it interfere with the antitrust suit in Los Angeles challenging the NFL's refusal to permit the Oakland Raiders to move to Los Angeles.
But the baseball strike did cast a shadow on the hearings, and Rep. Robert McClory (R-Ill.) attempted to question Lipsky on ways to settle the strike. But Rodino would not permit that line of questioning.
Illustrating his remarks with charts, Garvey told the committee yesterday that the NFL grosses $400 million a year and that profits to the owners total $142 million.
But because so many revenues are shared equally by all NFL clubs -- television revenues are pooled, proceeds from playoff games are shared and gate receipts are split 60-40 percent between the home and visiting teams -- financial incentives for owners to win are sharply curtailed, Garvy said. This, in turn, reduces player mobility, Garvey argued, because it takes pressure off the owners to go after top players.
Of 139 free agents in 1980, he said, only three moved from one club to another, and none moved when compensation by the signing club was required.