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December 20, 2002

Franchise Location

Relocation Under the Major League Rules

by Doug Pappas

Major League Baseball's governing documents aren't intended for public consumption. But when I recently spent two quality hours with a 1999 edition of the Major League Agreement and Major League Rules, I took detailed notes of certain key provisions. I don't think any of these sections have been amended since then.

Orioles' owner Peter Angelos has repeatedly warned MLB against moving the Montreal Expos to Washington, D.C. or northern Virginia. But can he stop the move? That may depend on where the club would play.

Angelos' rights are derived from the Major League Rules. Rule 52 allows Angelos to block any other franchise from playing within 15 miles of the Orioles' territory. This territory is defined to include Baltimore, Anne Arundel, Howard, Carroll and Harford Counties in Maryland -- but not the D.C. suburbs of Montgomery and Prince George's Counties. However, my unscientific measurement on a Rand McNally road atlas suggests that when measured from the corner of Anne Arundel County closest to the District of Columbia, the Orioles' 15-mile zone of protection extends almost exactly to Washington's RFK Stadium. It doesn't include southern or western Washington, or the Virginia suburbs. As a result, the Orioles' rights may depend on which of the proposed stadia is actually built.

Several other clubs' territories raise interesting possibilities. In metropolitan Los Angeles, the Dodgers and Angels share Orange, Ventura and Los Angeles Counties -- but not Riverside or San Bernardino Counties east of Los Angeles, with a combined population in excess of 3,200,000. Parts of New Jersey are also open to invasion: Philadelphia's territory is limited to Gloucester, Camden and Burlington Counties, while the Mets and Yankees have the rights to Bergen, Hudson, Essex and Union Counties.

While New York's and southern California's clubs share a common territory, the San Francisco Bay area is divided unevenly. The Giants' territory includes San Francisco, Marin, San Mateo, Santa Cruz and Monterey Counties, while Oakland's is limited to Alameda and Contra Costa Counties. Moreover, the Giants have the right to exclude other major league teams -- though not minor league teams -- from Santa Clara County, the heart of Silicon Valley. If the Athletics want to move south, they'll have to buy off the Giants.

More generally, the Major League Agreement provides that franchise moves require the approval of 3/4 of all clubs in the affected league, plus a majority of the clubs in the other league. A club in one league can move into the territory of a club in the other league, so long as (a) 3/4 of the affected league's teams consent; (b) the two parks are at least five air miles apart, unless the two clubs mutually agree to waive this requirement; (c) the newcomer pays the existing club $100,000, plus half of any previous indemnification to invade the territory; and (d) the move leaves no more than two clubs in the territory. These requirements date to late 1960, when they were adopted to govern the expansion Los Angeles Angels' move into the territory claimed by the Dodgers in 1958.

If you and your rich friends think these rules are too restrictive, there's another option: start your own officially recognized major league. Major League Rule 1(d) allows any group of eight clubs to apply for major league status if it meets the following criteria:

  • Evidence of financial soundness;
  • Population of 15,000,000 in the eight cities;
  • Ballparks seating at least 25,000 fans in each city;
  • Average paid attendance of 3,500,000 over the three previous seasons;
  • A balanced schedule of at least 154 games;
  • Acceptance of the major league minimum salary, with no maximum salary;
  • Agreement to become parties to the Major League Agreement and the Professional Baseball Agreement (which governs the relationship between the majors and the minors);
  • Acceptance of the Uniform Players' Contract used by MLB; and
  • Agreement to join the major league players' pension plan, or to create a comparable plan.

A new league can apply for major league status if it meets all of these requirements except for paid attendance.

As the reference to a 154-game schedule suggests, these standards date to the 1950s, when they were adopted to ease Congressional pressure on MLB to expand. At the beginning of the decade, the Pacific Coast League was threatening to declare itself a third major, while 10 years later the well-financed Continental League threatened the MLB duopoly until the AL and NL expanded into its best markets. The attendance and population requirements are low enough that a determined group of AAA owners could meet them.

Two years ago, MLB's "Blue Ribbon Panel Report" rejected suggestions that MLB ought to contract by two or more teams, instead recommending "strategic franchise relocations" to better markets. Commissioner Selig's handpicked "independent" members suggested that struggling teams might consider moving "to a very large market already occupied by one or more high-revenue clubs." Although a third team in metropolitan New York would do more than any luxury tax to reduce the Yankees' revenue advantage, the Major League Rules effectively preclude this option. Similar rules in other sports have been successfully challenged under the antitrust laws -- if Washington, D.C. doesn't get the Expos, perhaps MLB's ludicrous exemption will finally be repealed. I'm not holding my breath...

Doug Pappas is an author of Baseball Prospectus. You can contact him by clicking here.

Related Content:  Peter Angelos,  Los Angeles,  Rulebook

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