Major League Baseball Players example essay topic

Baseball was still a fledgling business back in 1890, but ramifications from a Federal Anti-Trust Law passed that year would perpetuate itself for the next one hundred years. The Sherman Anti-Trust Act of 1890 prohibited monopolies, and made the people responsible for monopolies guilty of a felony. Because of the broad and general language of the Sherman Act, the Clayton Act was enacted in 1914, it declared that "the labor of a human being is not a commodity or article of commerce" (web). Even with the passing of the Clayton Act of 1914, "All businesses engaged in interstate commerce are subject to the anti-trust laws, all businesses except one - Major League Baseball" (Baseballplayamerica. com 5).

Baseball would be ruled by court cases for years to come as salaries increased, along with the value of each franchise and Major League Baseball as a whole. Baseball's judicial exemption is quite an anomaly. It remains the only interstate commerce exempt from anti-trust laws. This exemption is a direct deduction taken from taxable income for a specific reason as allowed by the IRS.

This exemption went into effect in 1922 when the U.S. Supreme Court in the Federal Baseball Club of Baltimore vs. National League. The Federal Baseball Club of Baltimore argued that The National League was "conspiring to monopolize the business of baseball by inducing the other Federal League clubs to join the National League with the purpose of destroying the Federal League" (Baseballplayamerica. com 5). Oliver Wendell Holmes, an ex baseball player, ruled that "professional baseball is not a subject of interstate commerce and therefore is not subject to the anti trust laws". Major League Baseball's Anti-Trust Exemption coincides with something known as the "reserve clause".

The reserve clause was created in 1879 by Arthur So den, the owner of the National League's Boston franchise. The reserve clause is defined as; "Part of the MLB contract where the team reserved the right to contract with the player for the subsequent season" (web). This reserve clause bound players to a club until an owner decided to move him by trade or releasing him, thus leaving the player two options, play for the team or quit baseball. The reserve clause provided the owners privileges over the players. Many people compare the conditions of a baseball player in the late nineteenth century as highly paid slaves.

It allowed for owners to control many facets of the game. Owners controlled where franchises, both professional and minor league would be, but most of all they controlled players. They could trade players for other players, and could trade players for money, and the players would see no money in return other than what they were under contract for. When Leagues began implementing the reserve clause because it provided them with guaranteed players, as well as a salary cap, the players began to organize. The Brotherhood of Professional Base Ball Players was founded in 1885 and along with the union came a list of demands of the owners: "an end to the reserve system, an end to salary caps, an end to extra duties for players... and an end to player sales wherein one owner paid another and the player received nothing" (Zimbalist 5). Unfortunately for the owners many players opted to play for other teams in other leagues.

Many owners tried to go to court and prevent the players from leaving. The courts decided in favor of the players on the grounds that the contracts lacked mutuality. "That is, players could be dismissed by the clubs with ten days' notice but were obligated to play for the club for life. As they lacked mutuality, the contracts were not enforceable" (Zimbalist 6).

It is clear that if one person wields that such a concentration of power to one party would result in too much control over the other. In the late forties, after World War II, a league opened in Mexico that lured many Major League Baseball players away with more money. The commissioner of Major League Baseball imposed a five year ban on all U.S. players who jumped to the Mexican League. One man who did this was Danny Gardella.

Being offered more than double what the New York Giants were offering him, Gardella left to play in Mexico. After finding the conditions intolerable, he wished to return to the MLB. He was, however, blacklisted under the Chandler ruling. Gardella sued for three hundred thousand dollars. He lost the first ruling, but after one appeal The Second Circuit Court of Appeals found in Gardella's favor, ruling that "the advent of radio and television had clearly involved baseball in interstate commerce, and, hence, the sport was covered by the Sherman Act of 1890" (Zimbalist 13). The Court stated that the reserve clause is "shockingly repugnant, to moral principles that have been in America since the Thirteenth Amendment, condemning "involuntary servitude" for the "reserve clause" results in something resembling peonage of the baseball player" (Zimbalist 13).

This decision, in effect, reversed the Holmes decision of 1922, and the commissioner at the time, Happy Chandler, gave amnesty to all players who had jumped to the Mexican League. In 1951 their were hearings before the Subcommittee on the Study of Monopoly Power of the House of Representatives. At the time their were only a few antitrust cases against Major League Baseball as well as only three bills that would have legislated antitrust exemption to baseball, as it had to all others. Owners and old players testified that the reserve clause was necessary to preserve competition balance in the game. Few people seemed to realize that as long as player sales were allowed and there were teams willing to pay more for a player than another team, they were going to acquire him, regardless of whether there was a reserve clause or not. In 1953 George Toolson was a minor leaguer in the New York Yankees farm system.

After the Yankees reassigned him, he refused to report. Toolson accused the owners of "restraining players from selling their talent to owners that offered the highest price" (baseballplayamerica. com 5). While many felt that the Holmes decision of 1922 was no longer good law due to the Gardella case of 1948. The Court however reaffirmed the Holmes' decision. Although this decision seemed rather small, it placed the burden of the reserve clause, as well as the anti-trust exemption, in the hands of legislation. The opinion read "We think that if there are evils in this field which now warrant application to it of the antitrust laws it should be the legislation" (Zimbalist 15).

This made it evident that when it came to baseball's anti-trust exemption, the Congress and the Supreme Court were battling back and forth towards whose responsibility it was. Further proof that the upholding of Holmes' decision was ridiculous was that in 1957 the Supreme Court declared football subject to antitrust statutes and state that baseball's exemption was "unreasonable, illogical, and inconsistent" (Zimbalist 15). Curt Flood was an All-Star outfielder for the St. Louis Cardinals in the 1960's. He had played his entire career in St. Louis and had many friends and business interests located in St. Louis.

At the end of the 1969 season Flood received notice that he had been traded to the Philadelphia Phillies for Richie Allen. Flood wrote a letter to Commissioner Bowie Kuhn stating "After twelve years of being in the Major Leagues, I do not feel I am a piece of property to be bought and sold irrespective of my wishes" (Zimbalist 18). This plea was rejected by Kuhn and Curt Flood filed a suit against Major League Baseball asking for three million dollars, triple damages, and free agency. After a first round loss, Flood appealed, the appeals court decision read "If baseball is to be damaged by statutory regulation, let the congressman face his constituents the next November and also face the consequences of his baseball voting record" (Zimbalist 19).

The courts, almost ignorantly, forget that it was not Congress, but themselves that were to blame for Major League Baseball's anti-trust exemption. The decision to uphold the Holmes' decision stare dec isis, stating that too many long term commitments had been made relying on the 1922 decision, came under fire. Many people believed that the Supreme Court made a mistake the first time in 1922, and now continue to make the same mistake because Congress chooses to do nothing about it. Although it ended in defeat for Flood, his case against Major League Baseball changed the way players looked at their contracts and the way the players association dealt with the owners.

With the basic agreement of 1970, The Player's Association began to chisel away at the reserve clause. They succeeded in raising the minimum salary to fifteen thousand dollars, reducing the maximum salary cut to twenty percent, and most importantly they achieved the right to arbitration outside the commissioner's office. Two years later was the first industry wide players's trike. It dealt with the pension plans of the player's they struck for thirteen days. Another basic agreement was worked out after the strike, with free agency at the top of the wish list of the players' agenda. For the first time in Major League Baseball history the owners offered to "end the reserve clause for players with five years of major league service if their team offered them less than a thirty thousand dollar salary and for players with eight years of service if their team offered them less than forty thousand dollars" (Scully 29).

This offer eventually became the arbitration rule which said that any player with two years and one day of major league service can go before an impartial arbitrator and attempt to resolve the dispute with the owner. Arbitration is frowned upon by owners not only because they lose money, but many times they create unhappy players, which is never good for team chemistry and team success. Another achievement of the basic agreement was the 10 and 5 rule, which is also known as the Flood Rule. It stated simply that any player with ten years of major league service with five years or more with one team had the right to veto any trade. This gave players the right to control where they played for the first time since 1879.

In 1974 Catfish Hunter, a relief pitcher for the Oakland Athletics, signed a two year deal with Charlie Finley, the owner of the Oakland franchise. The deal they inked included a provision which put half of Hunter's salary into an insurance company fund. When Finley failed to do so, Hunter sued, stating that since Finley violated the contract, Hunter was no longer bound by it. The courts agreed, and shortly after Hunter signed a multiyear contract with the New York Yankees, becoming the only player in Major League Baseball with a multiyear contract. (Zimbalist 21). After Hunter signed with the New York Yankees, two players, Dave McNally of the Montreal Expos, and Andy Messer smith of the Los Angeles Dodgers, felt dissatisfied with their contracts and decided not to resign.

The clubs then decided to exercise a right they had to renew a player's contract for one year without their signature. By stating that they were no longer bound by their club "they were assaying an unprecedented challenge to the reserve clause in baseball based on literal interpretation of the renewal provision" (Zimbalist 27). This case went before Peter Seitz, the same man who headed the arbitration panel for the Oakland A's against Catfish Hunter. Seitz ruled that players were "free to bargain with other clubs once their contracts expired" (Zimbalist 27) and that their needed to be a better procedure of free agency in baseball. After the fiasco of a lockout by the owners, they agreed to grant free agency to any player with six years of major league playing time. Due to this change in the reserve clause, which had all but been destroyed by now, "the average salary tripled from 1976 to 1980" (Scully 32) due to the bargaining for players between teams.

Throughout the 1980's and into the 1990's Major League Baseball has seen its fair share of labor disputes. The Major League Baseball Players Association (MLBPA) and the owners of the franchises began trading strikes and lockouts back and forth. In 1981 the players had their strike. It began half way through the season and ended before the end of the season. Free Agency became the key to nearly every strike and lockout.

Disagreements between owners and players on compensation for free agency led to disputes. Free Agency dulled in the mid-80's, this was because the owners agreed that the signing of a free agent meant that a first round draft pick would be given to the team losing the player in the following amateur draft. This angered many players because it kept teams from bidding on players, thus preventing them from selling themselves to the highest bidder and making more money. The MLBPA, upset by this lack of free agency, filed their first of three grievances of collusion. After being found guilty of collusion, the owners locked out the players in 1990 during spring training, but reached an agreement before the season began. This agreement brought about a minimum salary of one hundred thousand dollars, they asked to introduce a salary cap, thus creating a competitive balance in the game, but eventually decided to back off of the salary cap in exchange for better arbitration rules.

This decision, many believe, now haunts baseball because of exorbitant salaries, and a widening gap between low and high market baseball teams. The new agreement, would last until December 31, 1993. The most infamous strike in Major League Baseball history was the strike in 1994. This strike remains engrained in my memory, as an eleven year old baseball fan, I did not understand why their wasn't any baseball.

I can still remember commercials by Nike, asking the players to play. This strike nearly ruined baseball forever. The owners once again suggested a salary cap to even the playing field, but it was rejected once again. Eventually a collective bargaining agreement was reached, with the agreement lasting into the new millennium (Zimbalist). Major League Baseball's Anti Trust Exemption resurfaced for perhaps the last time in 1998. A bill was passed by Congress limiting the powers of the owners and allowing players to use the court system, rather than strikes or boycotts, to solve labor disputes, thus lifting the anti-trust exemption from labor relations in baseball.

It still leaves owners the power of location, of both minor and major league franchises. President Bill Clinton signed the Curt Flood Act of 1998 on October 27, 1998, stating "This legislation is the successful culmination of bipartisan efforts to treat employment matters with respect to Major League Baseball players under the antitrust laws in the same way such matters are treated for athletes in other professional sports" (web). With the passing of this Act, The Holmes decision of 1922 was finally put to rest, thus ending 75 years of exemption from anti-trust laws. As one can imagine, there are still a number of problems within Major League Baseball. While revenue is only a problem for a few teams, the major problem many believe, are expenses.

These expenses are the player's salaries, which are now out of control. Since the end of the strike, salaries have sky rocketed. Kevin Brown, now a pitcher for the Los Angeles Dodgers, became Major League Baseball's first one hundred million dollar man, signing a 7 year, 107 million dollar deal before the 1998 season. Following in his footsteps were players like Derek Jeter, Manny Ramirez, and Jason Giambi, all signing one hundred million dollar contracts for their respective teams. These salaries, in many people's eyes, are ridiculous. They are being paid exorbitant amounts of money to play a boy's game.

The dagger in the hearts of baseball fans around the world was the signing of short stop Alex Rodriguez by the Texas Rangers to the tune of ten years, two hundred and fifty two million dollars. This free agent signing was like a red light to owners and players around the league, it became clear proof that something was out of control. I remember coming home from school winter of my senior year, going on my computer, heading to my favorite website (web) and seeing Alex Rodriguez's face next to the heading: "252 Million Dollar Man". I will never ever forget the feeling I felt. It was at this moment that I realized the business of baseball had surpassed the game of baseball. Paying somebody that much money is beyond ridiculous, twenty five million a year is fifty times more than the president makes.

Another major problem in baseball is the lack of an even playing field. "A much higher degree of revenue sharing and higher salary restraint would help to even the playing field" (web). Revenue sharing could help smaller ball-clubs make more money, during televised games, rather than the home team receiving nearly all the money made, it should be split somewhat evenly among the teams. That way when the Royals visit the Yankees, The already wealthy Yankees don't make all the money, and the Royals see a little cash flow.

It is clear that something needs to also be done about the Free Agent market; it is now 25 years old and needs to be fixed, because it has become unfair to smaller market teams. Sandy Alderson, Vice President of Baseball Operations for Major League Baseball puts it best: "The case is competitive balance, the average fans don't care whether a team is losing money, don't care about the level of debt, and don't care about contraction, except in cases they " re directly affected. What they do care about is competitive balance. Ultimately, we have evolved to the point where some of these systematic problems that exist in baseball have created situations in which most teams aren't competitive and can't be competitive and won't be competitive unless the system itself is changed (web) Over the past six months, contraction has made headlines in Major League Baseball. Commissioner Bud Selig made a proposition where two of the thirty major league franchises would be contracted. The two franchises targeted were perennial losers, the Montreal Expos, and the Minnesota Twins.

The contracts on both of their stadiums were running out, and both teams were failing to see substantial profit. All the players on these teams would be placed in a contraction draft, allowing the team with the worst record the previous season to select first and obtain the player and their contract. Contraction, however, encountered many road blocks on the way to its eventual demise. One such legal injunction forces the Minnesota Twins to play in the Metrodome in Minneapolis, Minnesota for the 2002 season. Many owners are optimistic about contraction saying that after two teams are dismissed from Major League Baseball, that "relocation and eventually a salary cap will take place" (web). With the start of the 2002 season, contraction has taken a back seat to the season at hand, but contraction is not unbelievable, Selig says, "It is still on the table because owners wanted it" (web).

The Major League Baseball Players Association disagrees entirely with contraction, two fewer teams results in fewer jobs. It will affect players in the majors as well as in the minors, as well as management in both. "Major League Baseball will continue to flounder in the absence of strong leadership in the form of a respected commissioner with some power" (web). Many people believe that placing an ex-owner at the helm of baseball operations was a terrible idea. Many commissioners have brought success to baseball as a sport and a business, in my eyes, and the eyes of many others, Bud Selig has disgraced baseball as both. It is clear that the union of players and the owners are going to kill the game of baseball if things continue the way they are going, "The only solution is to adopt a broadly based organizational form that reflects the reality of shared power while giving voice to other parties who can provide long-term perspective.

Baseball desperately needs a strong Commissioner reporting to a broadly based Board of Directors. The Commissioner must be something more than a chairman of the owners' committee" (web). Many problems exist in Major League Baseball, since it's inception it has gone from being a heart felt game played by boys and men, and has become a multi-billion dollar business around the world. It is still America's Pastime regardless of contractual problems and greedy athletes and owners. For baseball purists it is sad because "the last of the owners for whom baseball was a livelihood is now gone, replaced by tycoons using their fortunes to indulge their sporting fantasies, or by corporations, increasingly in media, who recognized teams as valuable assets" (web). For capitalists baseball will continue to be a marketplace where talent equals money for the players, and money for the team.

The economy of baseball has been shaped over the last one hundred years by court cases and congressional hearings. From the Sherman Act until the Curt Flood Act, baseball has undergone some serious changes, some for better, and some for worse. William Douglas, one of the dissenters in the 1953 George Toolson vs. New York Yankees case said it best, "This is not a romantic history baseball enjoys as a business. It is a sordid history" (Zimbalist 19).

1) web 2) web 3) web 4) web 5) web 6) web 7) web 8) web 9) web 10) web 11) web 12) web 13) Scully, Gerald W. The Business of Major League Baseball. 1989, University of Chicago Press. Chicago and London 14) Zimbalist, Andrew. Baseball and Billions: A Probing Look Inside the Big Business of Our National Pastime. 1992, HarperCollins Publishers, New York, NY..