Monopsony

1. Monopsony • Demand for any one product comes from one buyer. • If you are the sole buyer of a good or service, you are operating as a monopsony • Baseball is the biggest monopsony in the American business system

2. Monopoly • A market with only one seller of a unique good or service. • Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs • Baseball is NOT a monopoly

3. Labor Market • “Any place or situation in which employers are trying to hire workers and workers are trying to find jobs. • The “labor market” refers to the available workers employed and unemployed. • In the game of baseball, the players are laborers (Jackie Robinson) and the owners and managers are the market that purchases their labor (Branch Rickey)

4. Cartel • Organization of producers or suppliers who make agreements with one another on how to run their business. • Baseball organizations only compete against each other. Make the rules about the competition. • The game of baseball is a government sanctioned Cartel.

5. Post WWII Race Relations • Segregation of public places in the south, very common • Jim Crow laws adopted in the south • Baseball segregated • Owners don’t want to lose fans • Select players won’t play with African Americans • This leaves an untapped Labor Market in the form of Professional African American Baseball Players.

6. Jackie • Major League Debut: April 15, 1947 • Ran track, played football, basketball, and baseball- varsity letters in all four • Played for the Kansas City Monarchs • Active member of the NAACP • Minor Leagues 1946 • Brooklyn Dodgers 1947 • Becomes the “biggest attraction in Major League Baseball

7. Repercussions • Having a winning team draws in fans • Addition of African American players adds talent, which leads to more wins, which leads to more fans. • By 1959, every team in MLB has at least one African American player