Friday, November 19, 2010

MLB Armageddon 2011 (nope) – labor peace rules the day


Major League Baseball ended four days of meetings in Orlando, a precursor to next month’s annual Baseball Winter Meetings, scheduled for December 6-9 at Walt Disney World Swan and Dolphin Resort near Orlando, Florida. Both the National Football League and the National Basketball Association are looking at major work stoppages that could begin early in 2011 for the NFL. Former MLB Players Association executive director Donald Fehr is expected to be confirmed as the new ED for the National Hockey League Players Association as early as today (Friday). While labor uncertainty may be the biggest sports story in 2011, Major League Baseball looks forward to smooth sailing when it comes to their relationship with the MLBPA in the coming years.

The current MLB CBA expires on December 11, 2011. Two key MLB officials made it clear they believe MLB will not be facing any real labor related issues in the near future.

"I can't forecast what's going to happen," MLB commissioner Bud Selig commented according to MLB.com following Thursday’s ownership meetings. "But given the history you see a huge difference. I give [MLB's executive vice president of labor relations and human resources] Rob Manfred and [union executive director] Michael Weiner credit for a constructive relationship. It isn't Marvin [Miller] vs. Bowie [Kuhn] and all the anger.

"Both sides will be very intense and have things that they want, but when you think about what went on for years nobody could have ever dreamed that we'd have 16 years of labor peace, given that we had work stoppages in 1972, '76, '80, '81, '85, '90 and '94. In American labor history it's probably as bad a relationship as ever existed."

The major reason MLB has enjoyed 16 years of so called labor peace, in the eight work labor stoppages that Selig alluded to – MLB ownership (management) lost each and every time to the MLBPA.

Year Stoppage Days Games Key Issues
1972 Strike 14 86 player pensions, binding arbitration
Work stoppage lasted from April 1 - 12
Result: Players union and owners reach accord on a new collective bargaining agreement. Owners eventually agreed to add an additional $500,000 to the pension fund. Players forfeit payment for games missed during strike, but gain the right to salary arbitration.
1973 Lockout 12 0 salary arbitration
Work stoppage lasted from Feb. 8 - 25
Result: Camps open late but season starts on time with a new three-year collective bargaining agreement. Owners raise their contribution to the pension plan and increase minimum salaries from $13,500 to $15,000 in the first year and to $16,500 in the third year.
1976 Lockout 17 0 free agency, re-entry draft
Work stoppage lasted from March 1 - 17
Result: Federal judge John Oliver issued order making pitchers Andy Messersmith and Dave McNally free agents, upholding a ruling made the previous year by baseball arbitrator Peter Seitz. Commissioner Bowie Kuhn orders camps opened and a new Basic Agreement is negotiated.
1980 Strike 8 0 free agent compensation
Work stoppage lasted from April 1 - 8
Result: Final eight days of spring training lost, but season starts on time and a four-year agreement is reached, with a clause allowing the free agency issue to be re-opened in 1981.
1981 Strike 50 712 free agent compensation
Work stoppage lasted from June 12 - July 31
Result: Players' strike cancels 712 games. Owners lose right to have clubs directly compensated for the loss of free agents. Owners win right to retain players for six years and to be compensated with other players, as well as amateurs from the draft.
1985 Strike 2 0 salary arbitration
Work stoppage lasted from Aug. 6 - 7
Result: Owners agree to contribute $33 million for the next three years to the pension fund and $39 million in 1989. The players' minimum salary increases from $40,000 to $60,000.
1990 Lockout 32 0 salary arbitration, salary cap
Work stoppage lasted from Feb. 15 - March 18
Result: Camps open late. Owners raise their annual pension fund contribution to $55 million. Salary arbitration eligibility agreed to for 17 percent of the players with between two and three years of experience. The minimum salary increases to $100,000.
1994-95 Strike 232 938 salary cap, revenue sharing
Work stoppage lasted from Aug. 12 - March 31
Result: Postseason is cancelled. Judge's ruling ending labor dispute orders that 1995 and 1996 seasons must be played under previously existing labor conditions. New agreement is signed in March of '97 with implementation of a luxury tax on big-market owners for overspending.

Rob Manfred, Major League Baseball's executive vice president of labor relations and human resources addressed the league’s 30 general managers Tuesday, pretty much offering what Selig suggested on the issue of labor, MLB and the MLBPA.

"From the Commissioner's perspective, having input from people who are in charge of on-field operations is essential," Manfred said. "It's a crucial part of our preparation process. We spent the entire day on that topic and that preparation effort and I suspect that the bulk of [Wednesday] will be spent on the same general area."

Several general managers speaking at this week’s meetings in Orlando concurred with Selig’s and Manfred’s views on the current state of MLB labor relations.

"Of all of the sports, I'd say we are the least likely to experience a work stoppage," said Sandy Alderson, a Major League Baseball executive until the New York Mets recently hired him as general manager.

"The recent track record," Texas GM Jon Daniels told The Los Angeles Times, "is pretty good."

"I give Rob Manfred and Michael Weiner credit for a constructive relationship," Dodgers General Manager Ned Colletti told The Los Angeles Times. "But we'll see what happens."

If the owners eight negotiation losing streak did not send the owners the message they needed to receive consider what happened after the owners lost to the players after 1985’s brief players strike.

Despite industry growth, owners repeatedly tried to find ways to thwart free agency rights won by the players. None of those efforts were more cynical than when owners collectively decided not to pursue free agents in the player markets following the 1985, ’86 and ’87 seasons.

Only four of 35 free agents signed with new teams following the 1985 season. Players the caliber of Kirk Gibson, Tommy John and Phil Neikro were not offered contracts. The next season, the owners acted in concert again to restrain the free agent market when players like Tim Raines, Bob Boone and Jack Morris were unable to get offers from other clubs.

The MLBPA filed grievances alleging ownership collusion in early 1986 and again in February 1987. In September 1987, arbitrator Tom Roberts ruled that the owners had violated the Basic Agreement in the first collusion case and later, in January 1988, determined damages of $10.5 million. In October 1989, arbitrator George Nicolau ruled that owners had again violated the Basic Agreement in the second collusion case, awarding damages of $38 million.

In January 1988, the MLBPA filed a third collusion grievance after an off-season players market for which the owners created an “information bank’ to share information and restrain salaries.

The players prevailed in that grievance also and in November of 1990 they reached a final settlement to all three collusion cases in which $280 million in damages was awarded to players.

Have the owners waved the white flag? Yes and no. MLB players came as close to a strike as they ever had without going on strike late in the 2002 season. As the clock struck midnight the two sides agreed to a new CBA, seeing the light of day.

When one looks at the current NFL, NBA and NHL CBA’s, each CBA includes a league imposed salary cap. NBA commissioner David Stern suggested NBA owners are looking for NBA players to give back close to a third of their current salaries if a new labor agreement is going to be reached. NFL commissioner Roger Goodell is looking for major concessions that will include players receiving less than the current 60 percent of football generated revenue they currently receive. With Don Fehr taking over control at the NHLPA who knows what to expect when the current NHL CBA ends. Remember the NHL lost the 2004-05 season to a league mandated lockout – the result a salary cap.

Baseball owners wanted a salary cap since the early 1980’s but as history has shown, they failed each time they tried to force the MLBPA into salary restraints. At first it was easy to suggest MLB owners never had the resolve that NHL owners did when they had the strength to walk away from an entire season. At the end of the day, NHL players believed ownership would not allow NHL players to resume their NHL careers until they were a broken union.

NFL players know their careers are all too short, the 1987 work stoppage and the use of replacement players ended that work stoppage essentially before it began.

The 1998–99 NBA lockout was the third lockout in the history of the National Basketball Association (NBA). It lasted from July 1, 1998 to January 20, 1999 and forced the 1998–99 season to be shortened to 50 games per team. It was Billy Hunter (still remarkably the head of the NBA Players Association) taking on David Stern. It was more like David vs Goliath, however this time Goliath kicked David’s ass.

Not so remarkably business is very good for Major League Baseball right now; the economics of the game are stronger than they have ever been according to Selig.

"Given where this country has been in the greatest economic downturn since the great depression, these may have been the two best years we've ever had, considering the environment. Am I satisfied where we are? I'm satisfied. The last six years have been the best in baseball history in attendance.

"While were down a little bit from a few years ago, it's remarkable where we are. So I feel good about it. Sure, there are some clubs that are down and owners who are disappointed, but I'll deal with that on a case-by-case basis."

Selig suggested when all the numbers are totalled from the 2010 season MLB will have generated close to $7 billion. Those are numbers the NFL enjoys and the NFL has television rights agreements that are unrivalled in the sports industry.

There remain strong sentiments for so called small market franchises (Pittsburgh Pirates, Milwaukee Brewers, Minnesota Twins) that cannot afford to compete with the teams that generate the biggest local media rights fees (New York Yankees, Boston Bruins, Los Angeles Dodgers) but as recent history has indicated (the success of the Tampa Bay Rays and the Minnesota Twins) on-field success appears to be more connected to how teams’ draft more than the money they have to spend on free agents.

While the Yankees and the Red Sox have the ability to correct player mistakes through free agent spending, both the San Francisco Giants and the Texas Rangers (the two teams that met in the 2010 World Series) did not meet in the Fall Classic because of major free agents they signed – they made the right player moves at the right time.

There is a classic belief that if history can teach us anything it is to correct our mistakes. When it comes to sports and labor, what will be the driving sports issue in 2011 what works for Major League Baseball might not work for the NFL, the NBA or the NHL. One point is crystal clear when it comes to understanding how to work with their players association – Major League Baseball has learnt from their mistakes.

For SportsBusinessNews.com this is Howard Bloom. Sources cited and used in this Insider Report: http://www.stevetheump.com/baseball_stoppages.htm and http://mlb.mlb.com/pa/info/history.jsp

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