September 2001 | Volume 52, Issue 6
WHY BASEBALL DOESN’T PLAY BY THE RULES OF BUSINESS
As baseball’s pennant races approach their climax, we all can look forward to that furious, no-holds-barred competition that enlivens nearly every season of our national pastime. I’m referring, of course, to the battle between owners and players over the game’s Basic Agreement.
The history of baseball’s labor struggles has always stood the traditional roles of labor and management on their heads. The main goal of the players’ union has simply been to secure for its members what has always been guaranteed to every other American this side of slavery and indentured servitude: the right to sell their services in the marketplace. In response, the owners have demanded socialism, at least for themselves.
There seems to be something about the business of baseball that turns otherwise agile minds to mush. In 1922, in an opinion written by Oliver Wendell Holmes, Jr., the Supreme Court ruled that baseball was beyond the writ of the nation’s interstate commerce and anti-trust laws because it was a sport, not a business, and because “exhibitions of baseball are purely state affairs.” This must have come as a surprise to fans paying hard-earned money to see, say, Boston play St. Louis. And no less an advocate of the free market than George Will has insisted that professional baseball cannot survive without salary caps, revenue sharing, and subsidized new stadiums complete with luxury boxes. Apparently the invisible hand no longer works when it isn’t entirely controlled by the owners.
For all of Mr. Will’s demands, the players have been largely successful in their battles against management over the last 30 years. And we shouldn’t expect anything to change very soon. For one thing, the owners’ contention that they cannot possibly make money and that “small-market” teams (an infinitely flexible definition) cannot survive without salary caps has been sadly battered of late. The 2.000 season was the most competitive in 115 years of major-league play, the only year ever in which no team won as many as 60 percent or fewer than 40 percent of its games. Attendance, broadcast revenues, and franchise values have continued to spiral merrily upward, as in pretty much every season since baseball was first forced, kicking and screaming, into the free market.
Yet the primary reason that the players will probably win again is, ironically enough, the same reason baseball’s owners had things pretty much their own way for almost a century. The root of all this strife is the infamous “reserve clause.” It dates back to 1879, the fourth year of the fledgling National League and only eight years after the founding of the first professional baseball league—indeed the first professional sports league—in U.S. history. “Like everything else American it [baseball] came with a rush,” wrote John Montgomery Ward, the man who would lead the first great challenge to the owners. “The game is suited to the national temperament. It requires strength, courage and skill … and though a most difficult game in which to excel, it is yet extremely simple in its first principles and easily understood by everyone.”
The first principle for the eight National League owners was that they must keep salaries down. To save themselves from competitive bidding, they came up with a secret agreement under which each would “reserve” the rights to five players. That meant that it didn’t matter when these players’ signed contracts expired. The teams still owned the “rights” to them for the following season. And the season after that. And until kingdom come, unless the teams deigned to release them. Or to swap or sell them to another team, for money that the players would see none of.
Soon the reserve clause was expanded to cover every player in the National League. Then to every player in the National League’s new rival, the American Association, and then to all minor leaguers, everywhere, in what was now dubbed organized baseball (as in organized crime). Baseball players could sign over the rights to their labor, in perpetuity, to a nationwide cartel—or they could find another planet to play on.
The great champion of the reserve clause was Albert Spalding, owner of the National League’s Chicago franchise and one of the game’s early star pitchers. Spalding was a visionary and a fierce proponent of his game who took a boatload of star players on a world tour following the 1888 season. The Americans ended up playing a game in the sands before the Sphinx and tried to play one in the Colosseum. At the same time, he was making great progress in turning a single sporting goods store into a multi-million-dollar empire. He was supplying all the baseball equipment for the National League and even publishing its best-selling annual, Spalding’s Official Base Ball Guide , a volume that never failed to extoll the contributions of one Albert G. Spalding to the game.
By 1889 he and his fellow owners had decided to go even further in containing labor costs. All players would now be classified from “A” to “E,” with none to receive a salary of more than $2,500 or less than $1,500—and with all the players’ rankings to be determined exclusively by the owners. This brought the players to a boil. Then, as now, fans and sportswriters tended to have mixed feelings about players, envying both their lifestyles and their salaries. It was true that $1,500 was several times what the average American workingman or -woman made in that day, but the players were regularly charged for everything from the drinking water on their benches to the laundry bills for their uniforms, and the owners had the habit of leveling fines for all sorts of “infractions” such as dropping a fly ball or striking out.
In disgust, the players turned to John M. Ward. Like Spalding, Ward was a self-made man. Orphaned as a teenager, he had broken into the majors at the age of 18 and become one of the stars of the nineteenth century. Handsome and debonair, he was something of a rake, as Bryan Di Salvatore recounts in his entertaining biography A Clever Base-Ballist: The Life and Times of John Montgomery Ward , marrying a popular Broadway actress while carrying on an affair with another woman.
Ward’s professional life was more admirable. During the off-season, he took degrees in both law and philosophy at Columbia. On the diamond, he won 164 games and pitched a perfect game; when his arm gave out, he switched to shortstop, eventually racking up more than 2,000 hits. He was a canny, daring, and opportunistic player, both on and off the field. From the 1885 season onward, he worked at organizing his fellow “baseballists” into a union, the Brotherhood of Professional Base Ball Players. Following the institution of the “classification” system, he and his brothers made their move. They announced their intention not to strike but to form a third major league in 1890, the Players’ League. The owners scoffed at the idea that players could run their own league, but in the first home stand of the new season, the Players’ League outdrew the National League in one city after another.
After that, both sides used attendance figures as propaganda, but the records indicate that the players had the better of it. Club owners in both leagues gave away tickets right and left, and both leagues, particularly the National, threw money at any star who would sign with them. Even so, by the end of the season the owners were reeling. The American Association was mortally wounded and the National League little better off. The crucial New York franchise was saved only when Spalding poured money into it and got his fellow owners, and some known gamblers, to do the same.
This was war, and Spalding was determined to win. As craftily as he had once picked runners off base, the old pitcher now picked off the players’ financial backers one by one, bluffing them into selling out. The players, meanwhile, were lured back to the National League by a promise to weaken the reserve clause—temporarily. It was all over before the Players’ League could even take the field again. In a remarkably convivial surrender over the winter, Ward and his backers spent an afternoon drinking and singing with Spalding in a Manhattan saloon. “Pass the wine around,” Ward stood to say in eulogy. “The League is dead, long live the League.”
Ward would return to play and manage in the National League before embarking on a successful career as a lawyer. He and Spalding would both end up in the Baseball Hall of Fame, in Cooperstown. The reserve clause, though, would live on and on—and with just the effect the players had feared. Within two years of the demise of the Players’ League, the average salary was cut almost in half, and even in 1966 it was a mere $19,000.
That year a revived players’ association decided to hire an obscure steel-union economist named Marvin Miller as executive director. Miller proved every bit as determined as, and a good deal shrewder than, John Ward. Under his direction, the players would use strikes, lockouts, court cases, and arbitration to grab a real piece of baseball’s ever-mushrooming action.
Today, ballplayers can become free agents, with full rights to themselves, after six years of major-league service. This is still longer than in most careers, but combined with binding arbitration and minimum salary provisions, it has pushed the average big-league salary up over a million dollars, evoking howls from fans and sportswriters, who, we must presume, would in the same position turn away all that lucre.
And the reserve clause still lives. There’s the rub. For even if the owners could crush the union, it would mean dissolving the very agreement that preserves the clause. Any individual player would then be free to sue, and his chances of winning would be very good, thereby ushering in the very last thing the owners want—a full, free market.
After all, is there anyone in America, even a judge, who still believes that baseball is just a game, and not a business?