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Over the next few weeks, I’ll be emailing out sections of a larger story, titled “Labor peace is a lie.” Here’s part two, on free agency, collusion, and the strikes of the 1980s. If you missed any of the other five parts, you can find them here.
Free agency, and owners’ rights to players
Building on the work of Curt Flood before them, players in 1975 finally, officially, challenged for free agency. In the previous CBA negotiations in ‘73, players broached the free agency topic, but came away with a sort of pseudo-arbitration instead, as they were allowed to negotiate their salaries in front of arbitrators after they had two full seasons in the majors.
It would not be long before players took things a step further, as Flood had before. They allowed their teams to renew their contracts, but did so while saying that the reserve clause Flood had challenged that owners clung to did not give teams perpetual rights to a player’s services, but a one-year option. If the player allowed a contract to be renewed once but did not sign, they would then be free to sign elsewhere in the future. While teams did not agree, arbitrator Peter Seitz did, and suddenly, there was chaos.
This decision was reached literally right before the MLBPA and owners began to negotiate the next CBA prior to the 1976 season, and Seitz’s decision made it so that every single player in baseball could become a free agent in a year by refusing to sign a contract for the upcoming season. The owners were not thrilled about this, and locked the players out of spring training to force negotiations and avert this version of free agency. This lockout did not last long, as commissioner Bowie Kuhn intervened so negotiations could go on while games were being played, making it even clearer the owners weren’t going to just be able to walk away from this one unscathed and fully in control like they were used to.
The result of negotiations were similar in some ways to what you see in today’s game — six years of time in the majors earned a player free agency once their contracts were over— and very different in others, like a limit on how many teams could bid for one player (12, chosen by lottery) and how often a player could file for free agency (once every five years).
As Doug Pappas noted at ESPN in his early aughts history of baseball’s labor fights, player salaries grew enormously in spite of these restrictions, as they were no longer the perpetual property of the teams that signed or traded for them. Disagreements over how to deal with this new reality would inevitably lead to the 1981 strike by the MLBPA.
Compensation, and the 1980’s strikes
Disagreements over how to compensate teams that lost a free agent led to the 1981 strike, and all the eventual compromises to rectify the situation did were confuse everyone: if you think the qualifying offer system is bad and confusing, it’s a vast improvement over the early 1980s setup in which a team that lost a free agent could draft a player from the team they lost the free agent to as compensation. This system was disposed of in 1985 or the next round of collective bargaining, but the owners’ new targets caused a second strike by players: the owners wanted to change the arbitration years from two years of service to three, put a cap on arbitration raises, and force teams with above-average payrolls to sign free agents for no more than the league-average salary.
This strike doesn’t get the attention of the ‘81 or 1994 strikes, but that’s mostly because it was two days long. History shouldn’t forget it, though:The owners quickly backed off of every position except for bumping arbitration from two seasons to three seasons, and the players acquiesced to this one demand in order to maintain a compensation-less free agency. There were serious downsides to this single concession, though, as it began teams’ focus on inexpensive, pre-arb players by widening the available pool of them: while the ‘85 strike might seem like near-shutout victory for the players, in the long run, ownership has also significantly gained from it. Look around you now, two offseasons into teams’ new strategy of publicly saying free agents are a poor investment, and it’s easy to see how.
This two-day strike, despite its swift conclusion, was also the start of maybe the most contentious labor period in baseball history: it didn’t take 30-plus years for the concession to harm players.
Collusion and the 1990 lockout
Peter Ueberroth took over as MLB commissioner before the 1985 season, and with his appointment began the era of collusion in Major League Baseball. Ueberroth took over as commish at a time when MLB’s profits had tripled to $625 million over the previous eight years, and went up further thanks to his negotiating of a lucrative, $1.8 billion national television deal with CBS. With concerns that all of this money would eventually dry up, however, Ueberroth whipped the owners into a frenzy over fiscal responsibility, and organized a detailed plan of collusion to be used in the offseasons following the 1985, 1986, and 1987 seasons.
The reality was that free agency wasn’t going anywhere, and the salaries were continuing to rise. Profits were rising, too, but fear of changes in the economic market, fears stoked by Ueberroth, caused owners to buy-in to the idea that they should be more selective with their spending — they way owners became more selective with their spending was by promising not to sign other teams’ free agents, and by agreeing to a set maximum contract length for the free agents they did sign. When that failed, for their last trick, owners attempted to use an information bank to share all the details of offers they were making, so no one would pay more than this purposefully deflated market required.
Collusion was the only alternative they could see after negotiations to bring down the cost of free agency had failed — collusion failed, too, ended up costing owners $280 million awarded by arbitrators, and served to infuriate the players by the time the next collective bargaining was supposed to occur in 1990.
The owners’ response to the players’ justified anger was to lock them out of spring training while demanding serious concessions from the MLBPA in negotiations. The owners wanted pay-for-performance, revenue-sharing, and a salary cap to all be instituted, and while there was potential for revenue-sharing to be a positive for players in the end, that was unknown at the time, and both a salary cap and pay-for-performance were obviously and severely limiting for the players.
The owners also demanded that the players accept changes to both arbitration and free agency that would limit what players earned, and planned on keeping the lockout going until the players caved. Instead, it was the owners that ended up ending the lockout, and only after everything they demanded was refused and dismissed. In fact, they actually ended up expanding arbitration so players would earn more, helping to create the super-two system that’s in use today.
Have you noticed a trend here? The owners are continually attempting to scale back what players have earned in their play, and earned in collective bargaining. For them, it’s not about trying to find new ways to improve their relationship, or, as one would expect of baseball’s ruling class, limiting what players can win in negotiations. Their strategy is far harsher and more severe than that, as it involves straight-up eliminating the gains of players, and trying to get baseball into a time machine set for the pre-union days.
The players held together and fought back each time, and really with just the one notable concession over the course of decades. Yes, that concession remains a problem in the present, but considering the onslaught from ownership, it’s still an impressive feat that they held it to just the one.
Things would change with the rise of Bud Selig and the 1994 strike, as ownership would eventually learn the art of subtlety.
The third part of this story will focus on Bud Selig’s transition from owner and ringleader to commissioner and ringleader, as well as the 1994 strike.
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