Both of these practices – the reserve clause and the chasing-off of a competitor league – struck a number of stakeholders and observers as classic monopoly behavior that should have been illegal. The clause severely curtailed competition for talent and thus allowed teams to save money on player salaries. At this time, MLB also had a reserve clause that bound players to their teams for their whole careers, so long as the team didn’t cut the player. The NL and AL owners banded together to push the Federal League out of business by buying up its teams and paying Federal League owners to cease their operations. In 1913, 10 years after the AL-NL merger, a competitor circuit called the Federal League emerged. Its intended use was to prevent businesses from making anti-competitive agreements and monopolizing industries – except, as it turns out, the industry of the national pastime. That year, Congress passed and President Benjamin Harrison signed the Sherman Antitrust Act, which became the bedrock of anti-monopoly law in the United States. But the business story of America’s dominant baseball league starts in 1890. M ajor League Baseball formed upon the merger of the National League and American League in 1903.
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