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Thursday, September 5
Updated: September 8, 10:29 PM ET
A contentious history: Baseball's labor fights

By Doug Pappas
Special to

The past 35 years of baseball labor relations have often been described as an unbroken streak of victories by the players over the owners at the bargainnig table. This view is too simplistic. More accurately, the players outnegotiated the owners for 10 years, then after a major arbitration victory made possible by those negotiations, have spent the past quarter-century trying, more or less successfully, to hold onto their gains.

Although the Major League Baseball Players Assocation (MLBPA) was formally recognized as the players' bargaining representative in 1954, the first collective bargaining agreement (CBA) was not negotiated until 1968. That first CBA followed the players' hiring of Marvin Miller to serve as the MLBPA's first full-time Executive Director. Miller's predecessor, Wisconsin judge Robert Cannon, had been so friendly to the owners that he was seriously considered for commissioner, but most owners wouldn't have offered Miller even a dinner invitation.

The first CBA, covering the 1968 and 1969 seasons, was a short, relatively innocuous document. The players won an increase in the minimum salary from $7,000 to $10,000, as well as larger expense allowances. More importantly, the deal brought a formal structure to owner-player relations, including written procedures for the arbitration of player grievances before the commissioner.

The next CBA, a three-year deal signed in 1970, built on this gain. For the first time, owner-player disputes not involving the "integrity of baseball" could be arbitrated not before the commissioner, an employee of the owners, but before a three-member arbitration panel with a neutral chairman selected jointly by the players and owners. Although the parties agreed to table discussion of the reserve clause while Curt Flood's antitrust suit against MLB worked its way through the courts, an impartial arbiter would ultimately award the players the free agency denied Flood.

During the 1973 negotiations, the players for the first time asked for free agency. They didn't get it -- but players with at least two full seasons in the majors won the right to have their salaries determined by an arbitrator. The three-year contract covering the 1973 through 1975 seasons also created "10 and 5" rights: the right of a 10-year veteran who had been with the same club for at least five years to veto a trade. Ron Santo of the Cubs soon became the first player to exercise this right.

The battle for free agency
Other players soon threatened to take the meaning of the reserve clause in their contract to arbitration. They refused to sign contracts for the ensuing season, allowing their club to renew their contracts but asserting that upon the expiration of the renewal term, the club would have no right to their services. Sparky Lyle played unsigned for the entire 1974 season before signing a contract on the last day of the season; Bobby Tolan actually executed his 1974 contract after the season. But in 1975, Andy Messersmith and Dave McNally refused to sign. Arbitrator Peter Seitz agreed with them that the reserve clause created only a one-year option, not the perpetual right to renew as the owners claimed.

Seitz's decision was handed down on the eve of negotiations for a new CBA. The owners were desperate; under Seitz's ruling, every player in the majors could become a free agent by simply playing unsigned for one season. They locked the players out of spring training 1976 and vowed not to open the gates until the players accepted major restrictions on the free agency they had just won. After several weeks commissioner Bowie Kuhn ordered the camps opened, permanently alienating many hard-line owners.

The parties finally reached agreement on a new four-year CBA in midsummer. Under it, all players with at least six years' experience could become free agents when their contracts expired. The MLBPA accepted two additional limits: a player could only file for free agency once every five years (thereby causing quality free agents to demand five-year contracts), and could negotiate with no more than 12 teams besides his former club. The 12 teams were determined by an annual draft of negotiating rights.

Despite these restrictions, free agency sent salaries skyward. The average player salary jumped from $51,501 in 1976 to $143,756 in 1980, when the parties had to negotiate a new CBA. In an attempt to limit free agency, the owners proposed that a team losing a quality free agent should be allowed to select a replacement from the signing club's major-league roster. When the players resisted, a midseason showdown appeared certain.

Hours before the strike deadline, the parties announced a four-year deal which resolved all issues except free agency. The owners and players created a joint committee to study the issue of compensation for free-agent signings. If the parties couldn't agree on a compensation formula by February 1981, the owners had the right to implement their own proposal -- but if they did, the players had the right to strike.

Summer of '81: The first big strike
Both sides held firm. The owners stuck to their demand for compensation in the form of a major-league player from the signing team. The players struck and 712 cancelled games later, the parties compromised on a form of indirect compensation: all clubs losing a Type A free agent could draft a replacement from the roster of any club eligible to sign Type A free agents, with such clubs allowed to protect only about two dozen players in their entire organization. The parties also agreed to extend the CBA through 1984.

The compensation scheme was a disaster. Fans couldn't understand how the White Sox claimed Tom Seaver from the Mets as compensation for losing Dennis Lamp to Toronto. George Steinbrenner couldn't understand how Oakland could draft top prospect Tim Belcher from the Yankees when Belcher hadn't even signed with the Yankees until after the deadline for the club to submit its list of protected players. During the 1985 CBA negotiations, the major-league compensation draft was quietly dropped.

In 1985 the owners targeted salary arbitration as well as free agency. They proposed to raise the threshold for arbitration eligibility from two to three years, and to limit arbitration raises to 100 percent of the player's previous salary. The owners also demanded that clubs with above-average payrolls be barred from signing any free agent for more than the major-league average salary. Again, rather than accept the owners' demands the players struck. The strike ended two days later, with the owners dropping restrictions on free-agent signings and arbitration raises in return for the players accepting a three-year eligibility requirement for arbitration. The parties signed a five-year deal covering the 1985 through 1989 seasons.

Negotiations for a new deal in 1990 took place against a backdrop of three years of owner collusion. Unable to limit free agency at the bargaining table, from 1985 through 1987 the owners simply agreed among themselves not to sign one another's free agents, in violation of a no-collusion clause in the CBA. After losing three separate arbitrations on the issue, the owners ultimately agreed to pay the players $280 million for wages lost as a result of collusion.

Despite, or perhaps because of, their loss of the collusion grievances, the owners were in no mood to compromise. They opened the 1990 talks by proposing to eliminate salary arbitration in favor of a wage scale for all players not yet eligible for free agency, offering a "revenue participation" plan which would have operated as a de facto salary cap, and vowing to lock out the players until they accepted major restrictions on arbitration and free agency. The players responded by demanding that players with between two and three years' major-league service once again be eligible for salary arbitration.

When the 32-day lockout ended, the owners had abandoned all of their demands. They even agreed to expand arbitration to include 17 percent of the players with between two and three years' service file for arbitration, and to accept a treble-damage penalty if they were ever again found to have colluded.

Labor's darkest days: World Series cancelled
Hard-line owners fumed. Blaming commissioner Fay Vincent for the settlement, they vowed to do better next time. Shortly after helping to force Vincent from office in September 1992, White Sox owner Jerry Reinsdorf explained the owners' new labor strategy: "You do it by taking a position and telling them we're not going to play unless we make a deal, and being prepared not to play one or two years if you have to."

In June 1994 the owners proposed a salary cap that would have limited the players to 50 percent of total industry revenues. The players, who were then receiving about 58 percent of revenues, had no interest in accepting a collective 15 percent pay cut. They struck on August 12, believing that as in the past, a deal could be struck in time to complete the season. Several weeks later the players proposed greater revenue sharing and a small tax on high-payroll clubs. The owners stood firm, adhering to their demand for a salary cap and canceling the rest of the season.

The stalemate continued through the 1994-95 offseason. After the owners withdrew their salary cap proposal in favor of a steep luxury tax, the parties moved in tiny steps toward one another. But the owners blundered by unilaterally eliminating salary arbitration and free agency, claiming that they weren't mandatory subjects of collective bargaining. When a federal judge disagreed, forcing the owners to operate under the old rules until a new CBA could be signed, the players returned to work.

Even with the federal court injunction in place, the parties played the 1995 and 1996 seasons without a labor agreement. The CBA signed in November 1996 was far more favorable to the owners than the status quo, providing for greatly increased revenue sharing and a luxury tax on the five highest-payroll teams in 1997-99.

The owners, led by commissioner Bud Selig, prepared for the 2001-02 negotiations with unusual foresight. Instead of talking about the need to cut player salaries, the owners spoke in terms of "improving competitive balance." The commissioner's hand-selected "blue ribbon economic panel" recommended greater revenue sharing and a higher luxury tax in a report released with great fanfare by MLB. Except for the aborted attempt to contract by two teams, most of the owners' opening offer in the 2002 labor talks was taken directly from the blue ribbon panel report.

Thanks largely to their advance planning, the owners secured a significant public relations advantage over the players. Although the players had almost no demands of their own and would have been happy to renew the old CBA for another five years, fans and the media talked incessantly about the "greedy players" while largely treating the givebacks demanded by the owners as moderate, reasonable proposals to improve the game.

Last week's deal largely splits the difference between the owners' and players' proposals. Because of the parties' opening positions, though, the battle was fought almost entirely on the owners' turf. The only real question was how far the players would yield. The combination of greater revenue sharing and a luxury tax on high-payroll clubs seems certain to inhibit large-market clubs from spending money, while with no requirement that revenue-sharing recipients reinvest the money in their teams, low-payroll clubs are unlikely to increase their payrolls by an equivalent amount. Whether the result will be greater "competitive balance," only time will tell.

You can check out more work from the team of writers of the Baseball Prospectus at Doug Pappas can be reached at Baseball Prospectus is a registered trademark of Prospectus Entertainment Ventures, LLC.

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