The Reagan administration told Congress yesterday that it doesn't object to granting antitrust immunity to professional sports league efforts to prevent team relocations.
The Justice Department, reversing its previous policy, "would not . . . oppose an antitrust exemption for league decisions to block franchise relocations," Charles F. Rule, acting chief of the department's antitrust division, said at a Senate Judiciary Committee hearing.
The department, however, opposes four proposed bills that would grant limited immunity from the antitrust laws to pro leagues, Rule said.
His statement represents a break with the Justice Department's previous position, which held that a league's decision to block a team relocation should be fully subject to federal antitrust laws -- meaning that a federal court would decide if such an action hurt competition.
"At times, however," he said, "courts and government enforcers have inappropriately applied the antitrust laws in a way that interfered with, rather than protected, the marketplace, with the result that the antitrust 'cure' was worse, in terms of the marketplace, than the competitive 'disease' at which it was aimed.
"Such is necessarily the case with efforts by the courts to second-guess a league's decision concerning franchise relocations."
The Justice Department believes that the league, not a federal judge, is best qualified to determine what actions are in the best interest of its members, he said.
"Professional sports have become so popular precisely because the entrepreneurs who own teams have been able to respond to market forces," he said.
"Indeed, professional team sports in this country represent a triumph of capitalism. We would be unwise to ignore the importance of private economic decision making in that success."
He said the Justice Department opposes the four proposed Senate bills because none deals exclusively with team relocation.
The department objects to proposed antitrust exemptions for league revenue pooling or league actions regarding the selection and termination of team owners.
Sen. Howard M. Metzenbaum (D-Ohio) sharply criticized the Justice Department's reversal: "This administration claims to be for free enterprise and competition. If so, it should be endorsing legislation to repeal existing antitrust immunities and bring real competition to the business of professional sports."
Congress and the Supreme Court have granted several antitrust exemptions to professional sports. Major league baseball is entirely immune from federal antitrust laws. Separate exemptions allowed the American Football League and the National Football League to merge, and allowed the NFL to sell exclusive television rights to its members' games.
"According to today's Justice Department testimony, the NFL -- which is the country's only legalized, unregulated monopoly -- is a 'model of capitalism,' " Metzenbaum said in a statement after the hearing.
"This is repugnant to my understanding of capitalism and the free enterprise system. I am confident that Congress will reject the Justice Department's view on this issue."
One of the proposed bills already has been passed by the Senate Commerce Committee and has been referred to the Judiciary Committee before going to the Senate floor. Sponsored by Sens. Thomas Eagleton (D-Mo.) and John Danforth (R-Mo.), the legislation would grant limited antitrust exemptions in the areas of franchise relocation and revenue sharing to football, basketball, hockey and soccer leagues. It would also allow a league to select or terminate a team's ownership by majority vote.