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Marvin Miller and the How Free Agency Came to Baseball, Part I

UPDATE: Part II of this article can be found here.

Last week we looked at the History of the American and National leagues in two parts (part I, part II). This week we will look at the history of labor unions in baseball, and focus on the impact that Marvin Miller had on the game. We will examine the significance of the Reserve Clause, and look at how Marvin Miller won concessions from the owners and eventually won the right for players to become free agents.

For much of baseball’s history, players were contractually bound to their teams for life, and were subject to be paid whatever the team decided.  It wasn’t until Marvin Miller came along that players were able to form into any kind of cohesive Union with any sort of power.

In 1890, baseball players formed the Brotherhood of Professional Base Ball Players. In 1900, they formed the Players’ Protective Association. In 1910 they formed the Fraternity of Professional Baseball Players of America. And in 1946 they formed the American Baseball Guild. But none of these unions had any lasting power whatsoever.

You see, since baseball’s inception, players have been bound to the team for which they play. As baseball quickly became a profitable business rather than a leisure-time activity, owners sought to ensure that they received the bulk of the profits. Thus, they instituted the “Reserve Clause” – every baseball player was contractually obligated – or “reserved” – to his team unless the team no longer wanted him (either by trading him or releasing him). Players had no say in where they played (unless they were free agents – but even then, the demand for their services was likely to be low, since they could only become free agents upon their release), and no say over their salary. Owners could pay their players whatever they liked, and the players couldn’t do anything about it.

Owners guarded the Reserve Clause with dogged determination, as it was the ticket to maximum profits. So long as players had no leverage over their salaries, owners could – and often did – keep most of the profits for themselves. One of the most notoriously cheap owners, White Sox owner Charles Comiskey, saw his 1919 White Sox team throw the World Series in order to earn money, probably a byproduct of Comiskey’s unwillingness to pay his team even average wages.

Still, the players remained (mostly) happy, as they were making money by playing baseball. And the owners naturally paid stars more than they paid scrubs, thereby keeping the stars happy. And if the stars are happy, everyone’s happy – the scrubs had leverage at all, considering that they were often easily replaceable. 

Owners’ fervent protection of the reserve clause undergirded their attempts to keep their monopoly intact. Any third major league could compete for players by offering them higher salaries, which the owners simply couldn’t tolerate, as competition for players meant less money in their pockets - hence their efforts to drive leagues like the Federal League and Continental League into the ground.

That would all change beginning in 1953, when the best attempt at forming a union began: the Major League Baseball Players Association.

After its inception, the MLBPA didn’t wield much power, similar to previous attempts at unions. However, in 1966 they made the fateful decision to hire Marvin Miller, a leading economist and negotiator at the United Steel Workers Union, to be the MLBPA president. In 1968, Miller negotiated Major League baseball’s first Collective Bargaining Agreement, raising the minimum salary from $6000 to $10,000 – a nearly 70% increase.

Emboldened by his first CBA, Miller encouraged players not to sign their contracts for the 1969 season until a dispute regarding players’ pensions could be ironed out. Signing a contract was not a mere formality, as every player had to have a signed contract in order to be eligible to play. Per the Reserve Clause, every player contract was a one-year deal with a team option for a second year, and every contract had to be signed prior to the season. Thus, if a player didn’t sign his contract, he couldn’t play.

On February 3, 1969, approximately 125 players met in New York to reaffirm their threat to strike if the matter of their pensions wasn’t resolved. This was the first show of solidarity amongst players – their first real threat to strike. The next morning, Bowie Kuhn was appointed commissioner of baseball. Under tremendous public pressure, Kuhn quickly brokered an agreement, thereby averting a strike.

The threat of 1969 strengthened the MLBPA, and gave them added leverage to negotiate a new CBA in 1970. The minimum salary was once again raised, and Miller negotiated a higher percentage of playoff gate receipts to be given to the players. But the key point that Miller won in the 1970 was the right to arbitration.
In the past, players who had grievances of any sort could take their problems to the commissioner. Now, there would be an independent arbitrator – who didn’t have any obligation to players or to owners – to hear any grievances. Commissioner Kuhn agreed to this because it allowed him to remove himself from the grievance process, and avoid making any rulings against one or another owner’s interests (as he inevitably would have to when there was a dispute between two owners). It probably seemed innocuous to Kuhn and baseball’s owners, but accepting arbitration would be the first step towards opening the flood gates of free agency.

Miller understood that baseball had been completely aligned against players’ interests throughout its entire history. Players had no say in where they played, no say in their salary, no say in virtually anything. Miller believed that, because of this, an independent arbitrator would be inclined to view players’ grievances favorably, with the understanding that their grievances had never fairly been heard in the past. However, little changed in the months after arbitration was introduced.

At the end of 1971, the CBA was up for renewal. Baseball was as profitable as it had ever been, and players wanted to use surplus profits to expand their medical coverage. Owners balked at the idea, and – emboldened by the events in 1969 – the players decided to strike. This time, no agreement was reached quickly, and on April 9 – four days after the regular season was slated to begin – President Richard Nixon called upon both sides to meet with a federal arbitrator to settle the matter. They finally reached an agreement and the season began on April 15, with teams missing anywhere from six to nine games.

Until this point, owners never really believed that players were united enough to maintain a strike past opening day. They believed that since players’ livelihoods depending on playing, they would never hold out and miss a paycheck. The owners became furious with Miller for what they thought was his coercion of the players for his own personal aggrandizement. This was just the beginning of tension between the players, headed by Miller, and the owners.

In 1972, Curt Flood brought a grievance against baseball all the way to the Supreme Court (more on Curt Flood in Part II). During oral arguments, lawyers for baseball argued that the Reserve Clause shouldn’t be overturned because it was a matter of collective bargaining. The Supreme Court (reluctantly) upheld the exemption, but the arguments presented at the Court forced the owners’ hand: they had to collectively bargain, once again.

The Reserve Clause prevented players from obtaining their true “market value,” unlike players in football, basketball, or hockey (all of which had recently-founded leagues). The players had a grievance: namely, their pay didn’t reflect their market value. Miller bargained for the right for salary arbitration, using the newly established impartial arbitration. The arbitrator would be given two possible salaries for a player: one given to him by the player, and one by the owner. The arbitrator would then choose one of the two salaries, which would be binding. The arbitrator would have to choose from the two salaries submitted; he could not choose a third salary (an average of the two, for example), thus compelling both sides to submit “reasonable” salaries, for fear of losing the case if they did not.

The owners were in a bind. They had argued for the reaffirmation of the antitrust exemption by claiming that the Reserve Clause was collectively bargained. Thus, the owners had to bargain, rather than simply continue the Reserve Clause as it was previously understood. This gave the players almost all of the leverage in the bargaining. The owners had also insisted in Court that giving players no leverage in salary negotiations was essential for the maintenance of the game – if the players could make more money, the owners wouldn’t be able to pay them and the game would quickly face financial problems (so they claimed). However, the owners couldn’t simply say “take it or leave it” to the players, since the players had proven that they were willing to strike (and thereby deprive the owners of revenue). The owners essentially were faced with two options: loosen the Reserve Clause – which essentially allow for outright free agency – or accept the players’ proposal for arbitration.

The owners accepted arbitration. And Miller won several other concessions as well: players were now granted “10-and-5” rights, which meant that if a player had spent at least ten years in the majors and at least five years with their current club, they couldn’t be traded without their consent. Additionally, Miller reduced the amount of service time needed to refuse an assignment to the minors from eight years down to five.

In less than a decade, Miller had transformed the MLBPA from a punchless organization into one of the most powerful unions in the country, winning a tremendous amount of concessions from the owners and improvements for the players.  But his biggest move was yet to come.

WEDNESDAY, IN PART II: Curt Flood’s personal sacrifice leads to gains for all major league players. Marvin Miller tests a theory, using Andy Messersmith and Dave McNally. And after years of having no say in where they played and no leverage in salary negotiations, players finally earn the right to become free agents.