Monday, October 23, 2006

The Good News a new MLB labor accord, the Bad News a new MLB labor accord

Sunday evening hours before game two of the 2006 World Series the Associated Press reported Major League Baseball owners (the management side) had reached a new five year labor agreement with the Major League Baseball Players Association. Give Bud Selig and the owners credit, beaten by the players eight straight times, the owners waved the white flags before this even became a scuffle. Clearly when it comes to who’s running Major League Baseball, it’s the players, not the ones who pay the bills – the owners. Put in simpler terms – it’s a great day to be a fan of the New York Yankees or the Boston Red Sox. It’s a terrible day if you’re a fan of the Kansas City Royals or the Pittsburgh Pirates.

Sunday evening had to be great for Marvin Miller, alive and doing very well at the ripe old age of 89. Miller who must be recognized with enshrinement into the Baseball Hall of Fame became Major League Baseball’s first executive director in 1966. During a remarkable 16-year career Miller changed how the business of baseball was conducted, taking the players from an ownership philosophy of indebted servitude to the free market system ruling how franchises are built. When the new five-year collective bargaining agreement is announced in the coming days when the World Series shifts to St. Louis for games three, four and five the document will be remarkably similar to the CBA the two sides agreed to in 2002.

Optically the Lords of the Diamond will suggest we have ‘peace in our time’. The first CBA was negotiated in 1968. Eight work stoppages have highlighted how each CBA was negotiated since that fateful first agreement, except the four year agreement the two sides agreed to at Noon on August 30, 2002.

While there wasn’t a work stoppage when the last agreement was signed, one of the lasting images from August 30, 2002 is waiting to see if the Boston Red Sox would board their buses at Fenway to travel to a Cleveland for a weekend series against the Indians. The Red Sox where scheduled to depart at 7:30 AM but delayed their departure fearing all would be for naught, with Major League Baseball facing their ninth work stoppage. CNN had a camera fixed on the Yawkey Way on the Red Sox clubhouse. The Red Sox delayed their departure first for a few minutes, then for several hours as a nation held its breath – would the Red Sox emerge from their clubhouse and board charted busses to take the team to the airport, or would MLB face a ninth work stoppage that many observers believed would cripple the sport. Coming less than a year after the terrible events of September 11, 2001, many pundits believed if MLB forced fans to endure another work stoppage the game would go down for the count.

The fractured relationship between Major League Baseball and the MLBPA resembles a train wreck – with the owners being their own worst enemies each and every time.

Through it all Miller’s resolve remains a guiding force with the MLBPA. Miller became the first MLBPA executive director in 1966 after a 16-year career with the United Steelworkers of America. Miller brought not only determination and an understanding of what it would take to build a level playing field between owners and players, but a mindset that didn’t exist in sports in 1966. In the mid ‘60’s Major League Baseball teams ‘enjoyed’ the reserve clause, a contractual obligation that tied a player directly to the team he signed a contract with for his entire playing career. If slavery had been abolished, no one had bothered to inform MLB team owners. Similar working conditions existed in every sport – players where slaves to owners. Marvin Miller changed had sports operated. Marvin Miller made sports into a business.

His first Basic Agreement, signed in 1968, doubled pension levels, raised salary minimums, and addressed a variety of player complaints about working conditions. These gains and new licensing arrangements which directly benefited players, plus Miller's frequent tours of training camps and open-door policy at his New York office, soon overcame player resistance - even in the face of the owners' persistent efforts to label him a "labor boss" and a communist.

A year later, Miller found a baseball player who was tired of being treated like a second class citizen. Curt Flood the longtime all-star centerfielder for the St. Louis Cardinals was traded to the Philadelphia Phillies. Flood, an African-American had no interest in playing for a team in Philadelphia a city he believed was racially divided in 1969. Flood met with Miller in New York, telling Miller he refused to be traded against his will to a team and city he didn’t want to play in. Miller supported Flood, telling him it would be a tough uphill battle. Curt Flood was set to challenge MLB’s reserve clause, the cornerstone of player contracts.

Flood and Miller firm in their resolve did not win their fight. After a series of appeals, the case, technically a challenge to baseball's longstanding exemption from the anti-trust laws, reached the U.S. Supreme Court. In June 1972 the Court ruled, in a 5 to 3 decision, in favor of the owners. Once again, professional baseball's uniquely paternalistic system of labor relations was upheld.

Flood sat out the entire 1970 season. The Phillies traded Flood to the Washington Senators in a five-player trade, and signed a $110,000 contract with Washington. He ended his career with 13 games for the Senators in 1971 in which he batted only .200 and had lackluster play in center field.

MLB’s commissioner at the time was Bowie Kuhn. Much of Kuhn’s professional career was spent working for Major League Baseball. Elected commissioner in 1969, Kuhn’s 15-year tenure as MLB commissioner was preceded by 20-years as MLB’s legal counsel. Whether it was Bowie Kuhn’s philosophy or Marvin Miller’s determination, the two men where on a collusion course from day one. Kuhn is almost 6’6, Miller 5’5. Both men saw themselves as saviors for the game, just different sides of the game.

In 1972 baseball players went on strike for the first time in professional sports history. The strike began on April 1 and ended 13 days later. 86 games where lost, and the business of sports changed forever. Ownership was delivered a message – push the players far enough, and labor will refuse to work under those conditions.

A year later, a lockout ensued (17 days of spring training where lost) but arguably the most significant change in how contracts where negotiated took place -- salary arbitration.

In 1975, pitchers Andy Messersmith of the Los Angeles Dodgers and Dave McNally of the Montreal Expos, whose 1974 contracts had been renewed without their signatures or consent, filed grievances against the unilateral renewal procedure. In effect, it was a challenge to the Reserve Clause, with the owners, as usual refusing to negotiate. Peter Seitz's arbitration decision in the case, delivered on December 23, 1975, upheld the players. The 1976 Basic Agreement included a guarantee of "the right of players under their present contracts to become free agents" after serving six years with the team that first signed them. Miller was immediately hailed as baseball's "Great Emancipator."

In 1966 the average MLB salary was $17,000, ten years later in 1976 (the last year without free agency, but with salary arbitration in place) the average salary increased to $51,501. Five years later in 1980, the average salary increased to $143,756 in 1980. Bowie Kuhn and baseball owners had, had enough; they had the determination to destroy the players association led by Marvin Miller. Miller and union leaders general counsel Donald Fehr, former counsel Richard Moss, led the players in a strike that began on May 29, 1981 and ended on August 1, 1981. The CBA – the players won everything they wanted before the strike began, the owners lost.

Miller retired in 1983, Fehr took over, and nothing has changed. The owners continued to embarrass themselves and succeeded in bringing the sport into disrespect.

Kuhn left MLB in 1985 replaced by Peter Ueberroth. Ueberroth, served as the head of the 1984 Los Angeles Olympics Organizing Committee. The 1984 Olympics where a watershed moment in sports history, under Ueberroth’s leadership the Games became a money-making machine. MLB owners jumped at the opportunity to replace Kuhn with Ueberroth.

Beginning in 1986, under the guidance of Ueberroth, owners tried collusion to stem the increase in player salaries. Teams agreed not to bid on one another's free agents. The strategy worked, for awhile. During the next two seasons, player salaries grew at lower rates and high profile free agents routinely had difficulty finding anybody interested in their services. The players filed a complaint, charging the owners with a violation of the labor agreement signed by owners and players in 1981, which prohibited collusive action. They filed separate collusion charges for each of the three seasons from 1985-87, and won each time. The ruling resulted in the voiding of the final years of some players contracts, thus awarding them "second look" free agency status, and levied fines in excess of $280 million dollars on the owners. The result was a return to unfettered free agency for the players, a massive financial windfall for the impacted players, a black eye for the owners and the end of the line for Ueberroth.

Bart Giamatti replaced Ueberroth. Giamatti, a lifelong Red Sox fan who understood the heart and soul of baseball died less than a year after being hired, and 10-days after banning Pete Rose from the game for life for betting on baseball. Giamatti was replaced by Fay Vincent. Vincent hired in 1989 was fired in 1992, setting up the Bud Selig era.

The former owner of the Milwaukee Brewers, a used car salesman by trade, on September 9, 1992 Selig was Chairman of the Major League Executive Council – de facto commissioner. Selig served a dual role as President of the Milwaukee Brewers Baseball Club and Chairman of the Executive Council until his appointment as Commissioner on July 9, 1998.

Selig’s ‘reign of terror’ as commissioner was highlighted by the 1994 strike that began on August 12, 1994 and ended on March 31, 1995. The 1994 World Series was cancelled. The owners started 1995 spring training using replacement players, another disaster for ownership.

On March 29, the players voted to return to work if a U.S. District Court judge supported the National Labor Relations Board's unfair labor practices complaint against the owners (which was filed on March 27). By a vote of 26-2, owners supported the use of replacement players. The strike ended when federal judge Sonia Sotomayor issued a preliminary injunction against the owners on March 31. On Sunday, April 2, 1995, the 232 day long strike was finally over. Judge Sotomayor's decision received support from a panel of the Court of Appeals for the Second Circuit, which denied the owners' request to stay the ruling.

Tuesday’s Insider will look at MLB and labor since 1995. For Sports Business News this is Howard Bloom. Source cited in this Insider Report: ESPN.com, Wikipedia, the free encyclopedia, MLB.com, The Economic History of Major League Baseball and Guide to the Marvin J. Miller Papers

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