Unlike other professional sports organizations, Major League Baseball (MLB) benefited from an antitrust exemption throughout the 1900s. The exemption has been curtailed in recent years, and likely will be completely eliminated in the next several decades. The exemption comes from a 1922 decision of the U.S. Supreme Court. The 1922 decision stated that MLB was not subject to antitrust law, because it was a game and not interstate commerce.
In the late 1800s and early 1900s, National League (NL) baseball owners benefited from a "reserve clause," in which players could be sold and traded, but were not able to sign with other teams of their own volition. Basically, if an owner wanted to keep a player for his entire career, the player had no say in the matter. Players lamented the practice in those days, well over half a century before full-fledged free agency began. When the American League (AL) and NL combined in 1903, the newly formed MLB adopted the reserve clause.
Federal courts expanded regulation of interstate commerce throughout the 1900s, but baseball remained largely exempt from antitrust law. On two occasions, in 1953 and 1972, the Supreme Court heard arguments attacking the antitrust exemption. The court followed precedent from the 1922 decision (stare decisis), even though the court viewed the 1922 reasoning as spurious.
About three years after the 1972 decision, players were able to eliminate the reserve clause through collective bargaining, which paved the way for free agency. Following the baseball strike of 1994, the antitrust exemption was repealed in part, when it came to labor matters. But baseball remains exempt from antitrust law in regard to a few matters. For one, minor league players are tied to the MLB franchise that signed them much like players were under the reserve clause.