Why does baseball have an antitrust exemption?

Peanuts, Cracker Jacks and a century-old exemption from antitrust law — all part of America's pastime.  

It's been more than 100 years since the Supreme Court unanimously ruled that professional baseball is exempt from the Sherman Antitrust Act, a law from 1890 aimed at limiting monopolies and protecting competitive business practices. 

So why did the court give baseball a free pass? A quick look at the the sport's history helps explain.  

Before what we know as today's version of Major League Baseball, there were other professional baseball leagues, including the Federal League. Its teams played games for just a few years, from 1913 until 1915. But it's where hall of famers, like Mordecai "Three Finger" Brown and Joe Tinker got their starts.  

After the league folded, most of the teams were bought by American League and National League owners, except for one team — the Baltimore Terrapins. Its owner sued the American and National Leagues, alleging they teamed up to monopolize baseball. 

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He initially won a court ruling, but after a reversal, the case landed at the Supreme Court.  

In Federal Baseball Club v. National League, Justice Oliver Wendell Holmes wrote in the court's decision that baseball games were "purely state affairs," even though states crossed borders to play other teams. 

The Sherman Antitrust Act focused on policing interstate commerce. That meant baseball was exempt in the eyes of the court. No other American sports league has the same exemption.  

In practice, this means Major League Baseball acts as a monopoly. 

For years, it had tighter control over player pay and today it has control over Minor League operations and league expansion, including adding new teams or teams moving cities.  

In cases since 1922, the court has noted baseball is now an interstate business but it has kept the antitrust exemption in place, citing precedent.