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How Free Agency Changed the Course of Baseball’s Labor History

Jon Shelton

Labor rights in baseball have been utterly transformed since the sport's Golden Age, much to the benefit of players. (Picture above, from left: Babe Ruth, Carl Reynolds and Lou Gehrig)

As every fan of Major League Baseball knows, we’ve officially entered hot stove season.” The hot stove is the time between the end of the World Series and the beginning of the next year’s spring training. For devout baseball fans like me, it is an excruciating time of year because there is no action. Over the past generation, however, hot stove time has become a lot more interesting than it used to be. That’s because of the advent of free agency.”

During hot stove season, teams seeking to improve on their weaknesses, satisfy a rabid fan base or just keep together a championship-caliber core, bid on those players who are available on the open market. The best players have already come off the board and have already signed lucrative deals. The two top pitchers on the market — David Price, who recently signed with the Boston Red Sox, and Zack Greinke, who signed with the Arizona Diamondbacks —got contracts of seven years for $217 million and six years for $206 million, respectively.

Most recently, the Chicago Cubs signed away the Gold-Glove winning right-fielder Jason Heyward from its arch-rival St. Louis Cardinals. The Cubs will pay Heyward $184 million over the next eight years in the hopes of ending their 107-year World Series drought. (Each of these three contracts would entail much more money than the entire budget of the Scranton, PA school district, where teachers recently went on strike for two weeks for tiny raises).

These three men are better at throwing (Greinke and Price) and catching and hitting a baseball (Heyward) than virtually everyone else in the world. Fans in many cities are understandably excited about the possibility of seeing them play for their favorite team. All three of these players have overcome insanely high odds to top the level of competition at each stop along the way, and they are truly elite.

The salaries these players get — in terms of the value they add to the teams who employ them — are not unrealistic. And yet, every year fans complain about their outrageous salaries and their impact on prices for tickets and beers at the game (really, where else does a Miller Lite cost $9?). Oddly, few ever seem to complain about the owners’ profit margins.

Many people who rabidly follow these negotiations, however, know very little about the longer history of labor in baseball. What follows here is an examination of that history, and what it can tell us about the broader political-economic structure of the world in which we find ourselves.

A long history of restrictions on players

In terms of labor policy, sports don’t work the way virtually every other occupation in the U.S. does. The big four professional sports — baseball, football, basketball and hockey — have all effectively created cartels in order to restrict the bargaining power of individual players. In baseball, when an American player is drafted (the rules are different for international players at the moment), an individual franchise holds the rights to that player for a full year. The only leverage a player has is to go back into the draft the next year, and when he signs with the team that drafted him, that team can then control his labor for up to 13 years.

After four seasons in the minor leagues, the player must either be added to the 40-man roster or other teams get a crack at the player through something called the Rule 5 draft; once added to the 40-man roster, the player can only be optioned” to the minors for a total of three years. Once added to the major league (or 25-man) roster, a player starts to accrue service time. After a total of six seasons of major league service,” the player is guaranteed free agency. The better players move through the system more rapidly, make the majors more rapidly and accrue service time more rapidly. Theoretically, a player drafted and signed as a college senior could go well into his thirties without any say in where he plays.

Conditions used to be even more restrictive than this, however. In fact, for much of the history of professional baseball, once a player signed an initial contract with a Major League team, that team effectively owned his labor for the rest of his life.

After the sport’s explosion of popularity in the 1870s, professional baseball teams began instituting something called the reserve clause” in their contracts. Each contract after that point included a clause giving the team an option to renew the contract for the next year; if the club picked up the option, the contract was renewed, and it too contained an option. The system continued perpetually. Teams could sell or trade the player’s contractual rights, with no input from the player. In fact, the player’s only leverage was to refuse to play — and of course, there literally was no other game in town.

Today is the 40th anniversary of an arbitrator’s decision effectively overturning the perpetuity of the reserve clause and making free agents of two players — the Dodgers’ Andy Messersmith and the Montreal Expos’ Dave McNally. This effort did not come out of nowhere, however: it took union organizing to overturn the previous state of perpetual serfdom.

A challenge to owners’ control

During the height of the Gilded Age, players organized for a brief taste of freedom in 1890, when they actually formed a union called the Brotherhood of Professional Baseball Players, as well as their own league, the Player’s League, and played games for an entire season. Most of the National League’s best players jumped to the league, which was designed to distribute the profits directly to the players. But the league was short-lived and folded after a year.

That was the most significant challenge to the owners’ almost total hegemony — until the 1960s when baseball players forged a more lasting union response to the reserve clause. A significant moment occurred in 1966 when veteran union negotiator Marvin Miller, a previous top-level negotiator for the United Steelworkers (USW), was elected President of the Major League Baseball Players’ Association (MLBPA). Miller worked aggressively with the players to get the owners to agree to a collectively bargained contract, and the first one was signed in 1968. Importantly, the next contract in 1970 secured the impartial binding arbitration that would ultimately take down the reserve clause.

Further important groundwork, however, came when the St. Louis Cardinals traded All-Star outfielder Curt Flood to the Philadelphia Phillies along with catcher Tim McCarver (better known to most casual baseball fans as one of the most popular color commentators of all time) and two others for slugger Dick Allen and three other players. Flood, like Jason Heyward, was a Gold-Glove winning elite outfielder and solid hitter, but because of the reserve clause, made pennies compared to what Heyward will get in his contract.

Flood, also because of the reserve clause, had no recourse when the Cardinals traded him to the Phillies. Flood really didn’t want to go to Philly for several reasons: first, the Phillies were terrible, having lost almost 100 games (the gold standard of bad in baseball) in 1969, whereas the Cardinals had been to the World Series as recently as 1968; and second, Philadelphia was a notoriously tough place to play for African-American ballplayers.

So Flood refused to play, turning down a $100,000 salary and challenging the case in the courts. Crucially, Miller secured the backing of the union, which paid Flood’s legal fees, and got the former U.S. Supreme Court Justice and labor lawyer Arthur Goldberg to argue the case in front of the Supreme Court.

Among other interesting aspects of the case, Flood cited the 13th Amendment — Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction” — in his challenge. Ultimately, Flood’s appeal would be denied by the Supreme Court in the case of Flood v. Kuhn (1972). The 5-3 majority decision, written by Justice Harry Blackmun, began with a litany of legendary baseball players and ultimately concluded that baseball was too crucial to American identity for the Supreme Court to mess with it.

Baseball’s 99 Percent

Even after a defeat based on some of the most tortured Supreme Court logic between Dred Scott and Citizens United, the publicity around the case began to put cracks in the legitimacy of the reserve clause.

After the 1974 season, Dodgers’ star pitcher Andy Messersmith asked the team’s owner Walter O’Malley for a no-trade clause in his contract, and O’Malley refused. As a consequence, Messersmith refused to sign a new contract and played the 1975 season under the contract the team had automatically renewed. Miller wanted to use Messersmith as a test of the reserve clause, and he also recruited pitcher Dave McNally — having sat out the 1975 season due to injury — as insurance.

The arbitrator — Peter Seitz — affirmed the union’s interpretation of the reserve clause — that playing for a year without signing a new contract would make the player a free agent. Federal courts upheld Seitz’s decision, and after the league feared what might happen when all players could freely bargain, they negotiated a contract with the union that became the bedrock for current labor relations.

In the years since, star players have used this leverage to get very rich — Miami Marlins’ star slugger Giancarlo Stanton just played last season under the first year of a 13-season deal that pays him $325 million through 2027 (or more each game than Flood made his last season in the majors), and undoubtedly all major league players have benefited. The minimum salary now for a full year is over $500,000 — five times as much as what Curt Flood made when traded to the Phillies, and about the same as what $100,000 is in today’s terms.

We should recognize this as a victory over the perpetual serfdom that existed before the demise of the reserve clause. This victory was only possible because of the players’ solidarity in forming the union. We should also be mindful, however, that the new baseball economy echoes larger, troubling economic trends in the years since the 1970s.

First, baseball’s labor structure is reminiscent of the labor structure in the U.S. writ large, where the highest-paid 1% have seen their wages sky-rocket while the majority of workers have seen wages stagnate since the 1970s. In baseball, things have worked largely the same way as the incredibly high-paid players like Stanton contrast starkly with the legions of minor league baseball players, most of whom make sub-poverty wages and never make it to the majors. But the minor league system is just as integral for developing players capable of playing at the elite level necessary for Major League Baseball to be so lucrative as Walmart’s lowest-paid associates” are to that company’s profit margins.

Furthermore, though many players are talented, the only players who really get huge contracts are those who run the gauntlet of injuries possible under the strain of a serious baseball career that typically begins in one’s teens. Indeed, for pitchers in particular, no amount of talent can overcome the fact that throwing a baseball overhand is an unnatural motion, and this motion leads to a large portion of young pitchers getting reconstructive elbow surgery (what has been called in the past few years an epidemic”). Though many pitchers do recover, there is still — as there is in our economy writ large — a great deal of luck separating those who get an absurdly lucrative payday from those who end up getting almost nothing but some good bar stories when their playing career is over.

Second, the reason the world’s best baseball players are able to make such lucrative salaries is not primarily because of free agency. It is because baseball’s revenues — through ticket prices and television contracts — have skyrocketed, and teams have more dollars to compete with each other for the best talent. There are a number of reasons for this development, but a good deal of it has to do with the neoliberal development that has taken hold of so many American cities. The story of the last 40 years is also the story of municipal governments facilitating new profit-making opportunities for individuals and corporations (or as Bernie Sanders, in his recent speech on democratic socialism, channeling Martin Luther King, Jr., called it socialism for the rich and rugged individualism for everyone else”).

Baseball is no exception. Since the 1990s, just about every MLB franchise has built a new stadium, and virtually every franchise financed it with the help of millions of dollars in public subsidies and/​or tax breaks (This piece from NPR in 2011 documents some of those efforts). It goes without saying that the arguments made by the owners for the public funds is that the sports franchise represents a key part of the city’s civic and economic life. And yet the profits go directly into the pockets of the owners, not to the city. Sometimes, the detriments of these policy priorities can be dramatically apparent, as in my home state of Wisconsin, where the legislature’s last budget cut $250 million for higher education while subsidizing the Milwaukee Bucks’ new basketball arena at just about the same figure.

And baseball owners are raking it in. According to Forbes’ most current list of the value of baseball franchises, exactly half of the thirty teams are worth over $1 billion, and every franchise’s value grew by at least 20% last year. Just as a not atypical example, the current owner of the St. Louis Cardinals — Bill Dewitt — purchased the team in the mid-1990s from Anheuser-Busch for $150 million. Twenty years later, the team is worth almost 10 times as much (an estimated $1.4 billion). It goes without saying that that is a dramatic increase.

The anniversary of the demise of the oppressive reserve clause is cause for celebration for those who care about labor rights in sports and society as a whole. But we should also realize the ways that the trajectory of the new baseball labor structure resembles some of the most pressing political economic problems facing Americans today.

Jon Shelton is an assistant professor in the Department of Democracy and Justice Studies at the University of Wisconsin-Green Bay. He has written for Dissent and Truthout, and is at work on a book on the relationship between urban teacher strikes, labor politics and American culture entitled Against the Public’: Teacher Strikes and the Decline of Labor-Liberalism, 1968-1981.
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