Young Lawyers Journal
Issue 2
Sports in the Courts
"Freedom Ain't Free"
by Marc A. D’Antonio, Esq. and Jared D. Correia, Esq.
“Free agency is the impelling source of the soul’s progress.” [1]
— David O. McKay
Mormon theologian, pitcher for the Church of Jesus Christ
“Sure, it’s nice to win. But there’s only one thing that’s important to me, and that’s the money we’re going to get, win or lose. I don’t love baseball, I like it. And to me, baseball means money, and that’s all I care about.” [2]
— Vida Blue
Pitcher for the Oakland Athletics, San Francisco Giants and Kansas City Royals, baseball theologian
The values of player contracts in Major League Baseball still hold the power to stagger and, from year to year, seem to grow exponentially. The Yankees recently signed Roger Clemens to a $28,000,022 [3] one-year, pro-rated contract, to the chagrin of Faustian Red Sox fans everywhere. [4] It is the richest one-year contract in baseball history, and is being paid to a 44-year-old pitcher who will only pitch for half the season. Not a bad part-time job. Although the contract is pro-rated for a little over half a season, the Yankees do not catch much of a break, given that the pro-ration actually only reduces the contract value to $18.5 million; and, since the Yankees are over baseball’s “luxury tax” threshold, the team must pay an additional tax of $7.4 million on the actual payout. That, folks, is how a $28 million contract becomes an $18.5 million contract becomes a $25.9 million contract.
Although free agency is a baseball institution at this point—and it is difficult to imagine the game existing in a more static incarnation—free agency is a relatively modern baseball construct. In addition, professional baseball’s growth towards a system of free agency has origins nearer to the very genesis of the game.
From the earliest days of baseball, the tug existed for the institution of a fee-based structure within which fans would be charged and, thereby, players paid. Players were disguised as amateurs for a time before 1869, when the Cincinnati Red Stockings became the first professional baseball team. The formation of the Red Stockings was followed closely, in 1871, by the creation of the National Association, the first professional baseball league. [5]
In 1882, a rival league, the American Association, was formed, and began to cut into the baseball apple pie, representing the consumer dollar, that the National Association had previously monopolized. However, the competition did not last long, as the rival leagues formed a national agreement. In this agreement, the “reserve clause”—bane of players and bulwark of owners—was created. The reserve clause allowed “teams the right . . . to unilaterally renew . . . player . . . contract(s) preventing (the player) from entertaining other offers (of employment).” [6] The application of the reserve clause would essentially outlaw the creation of a free agency system whereby players, after accruing a certain amount of service time, could shop their services to the highest bidding team. The players naturally rebelled against this system almost immediately. In 1884, the player-run Union Association was created only to fold after one season. In 1890, the player-run Players League was created, and folded after one season. Despite the creation of the rival American League in 1901, which might have posed a challenge to the reserve system, the result was not a repeal of the reserve clause, but rather, the maintenance of the reserve system, as the American League and the National League joined in a conglomeration that would become Major League Baseball. [7]
With the failure of the players’ leagues and the American League to challenge the reserve system, the issue of free agency lay languid until just before the demise of the reserve system. Curt Flood, former centerfielder for the St. Louis Cardinals, with the assistance of Marvin Miller, baseball’s first union chief, made the first major challenge to the reserve clause. [8]
Flood began his major league career in 1956 with the Cincinnati Reds. Without the assistance of an agent or attorney, Flood negotiated and signed his first player contract with the club for a salary of $4,000 for the season. The St. Louis Cardinals traded for Flood in 1958. It was in St. Louis that Flood achieved the greatest fame of his playing days. As the Cardinals’ centerfielder from 1958 to 1969, Flood batted .301 or better six times; played in the 1964, 1967 and 1968 World Series; won seven Gold Glove Awards; and once played 223 consecutive games without an error. [9]
At the age of 31, after 12 years of faithful service and solid production for the Cardinals, Flood was traded to the Philadelphia Phillies in a multi-player deal. The Cardinals did not consult Flood about the trade. In fact, the club informed Flood of the trade by telephone after the deal was already consummated. Flood complained to Major League Baseball Commissioner, Bowie Kuhn, and requested free agency status so that he could negotiate with teams of his choosing. Kuhn, however, denied Flood’s request, and relied on the reserve system to do so. Flood, in turn, initiated an action in the U.S. District Court where he claimed the reserve system was a violation of state and federal antitrust laws. Flood complained that the reserve system was needlessly restrictive and that Major League Baseball could make concessions that would create a system acceptable to both players and ball clubs. The case ultimately landed before the Supreme Court.
For the third time in 50 years, the Supreme Court was faced with the issue of whether to subject professional baseball and its reserve system to state and federal antitrust laws. In Flood v. Kuhn [10], the Court relied on the past baseball cases’ precedent in deciding that any reform of baseball’s reserve system should be determined by the legislature and not by the courts. Writing for the majority, Justice Blackmun passed the responsibility off to Congress: “Congressional processes are more accommodative, affording the whole industry hearings and an opportunity to assist in the formulation of new legislation. The resulting product is therefore more likely to protect the industry and the public alike.” [11]
After Flood, Major League Baseball and its reserve system continued to enjoy exemption from federal and state antitrust laws. The Flood decision, however, merely prepared the levee for its ultimate break. The next challenge to the reserve clause would not wait 60 years. In 1975, pitchers Andy Messersmith and Dave McNally, along with Miller, petitioned for an arbitration board to allow players to have free agent status so that they might freely negotiate and bargain with other teams as opposed to the club owners’ insistence that the reserve system automatically and perpetually renew itself at the end of each option year.
When Andy Messersmith decided to challenge the reserve clause at the conclusion of the 1974 season, he had a 20-6 record and a 2.59 earned run average. He led the National League in winning percentage and tied for first in wins for the pennant-winning Los Angeles Dodgers. [12] In order to set up their challenge of the reserve system, Messersmith and McNally played the 1975 season without contracts, believing that this freed them from continual servitude under the reserve clause. Their cases went to arbitration, where Andy Seitz ruled in favor of the players. The ruling meant that under a new, much less restrictive system, players could become free agents and bargain with other teams once their contracts expired. [13] A new era was born.
The present era of free agency, has been marked by certain stages within its neo-development. Initially, the free agency “big guns” were the New York Yankees, led by owner George Steinbrenner, and the Atlanta Braves, the charge being spearheaded by owner Ted Turner. The Yankees lavished riches upon Reggie Jackson; the Braves decided to spend their cash on Claudell Washington. Jackson, after leaving the Oakland A’s, where he won back-to-back-to-back titles (and after a brief, nearly forgotten, one-year stop in Baltimore), led the Yankees to back-to-back titles. Claudell Washington did not have quite the same success in Atlanta. [14] Reggie Jackson was the unabashed [15] top prize of the first free agent class [16] which landed Jackson a five-year, $3.5 million deal. But, by 1979, power pitcher extraordinaire Nolan Ryan had signed with the Houston Astros for four years and $4.5 million, thereby becoming baseball’s first $1 million per year player. [17]
With player salaries continuing to climb upward in the early stages of free agency, and with no apparent end in sight, it wasn’t long before the owners sought revenge for thinner wallets and tinier market shares. The owners agreed on a plan to artificially reduce player salaries and to make the free market for player services a control grouping. The plan by which owners collectively agreed to stick to salary limits was called “collusion.” Eight players, entering upon free agency after the 1986 season, were set to get large deals, but it appeared as though no one wanted to sign them. Tim Raines, a fantastic, 27-year-old lead-off hitter for the now-defunct Montreal Expos, received no contract offers and was forced to return to the Expos, at a rate significantly reduced from what he would have been paid had an actual bidding process taken place for his services. In addition to the loss of money, some claim that Raines was denied a place in the Hall of Fame by being forced to play in the baseball wilderness of Montreal, where his deeds were consigned to oblivion. [18]
Alex Rodriguez won the 2003 American League Most Valuable Player Award for the last place Texas Rangers. Rodriguez had left a 91-win, wild card entry Seattle Mariners team after the 2000 season for the Lone Star State, where he would be the lone star on a bad Rangers team. Rodriguez was comforted in his losing by the 10-year, $252 million contract he signed with the Rangers. Meanwhile, the Mariners were all right, too, winning 116 games the year after Rodriguez left. A-Rod, in his infancy, approached the 2000 offseason as the best free agent prospect in history in what turned out to be the richest free agent class in history. It was the perfect storm for Rodriguez, and he sat comfortably in its eye, as baseball owners lost their minds all over the country. Manny Ramirez signed an eight-year, $160 million deal; shortstop Derek Jeter re-upped with the Yankees for a decade and $189 million; [19] and starting pitcher Mike Hampton signed an eight-year, $121 million deal with the Colorado Rockies. [20] Although owners continue to chastise each other for their spendthrift ways, one sought-after free agent is all it takes to set them agog again, prepared to win, or to provide the appearance of winning that might lead to merchandise sales, at any cost.
Although no salary figures have approached Rodriguez’s since the 2000 offseason passed into history, teams are starting to reach Ramirez-like levels again. And, free agency, despite the cyclical nature of the payoffs, has never been anything but a surefire way to get rich.
The entire discussion of the history of free agency in baseball begs an interesting hypothetical question. What if free agency had been the history of baseball? In 1883, Charles “Old Hoss” Radbourn, pitching for the Providence Grays, compiled a 48-24 record, with 632 innings pitched and 315 strikeouts. Not satisfied with his performance, the next year Old Hoss went out and won 60 games, against 12 losses, for an .833 winning percentage. He topped his prior season totals with 679 innings and an alien 441 strikeouts, while leading the Grays to the championship. [21] That sounds like something George Steinbrenner might open his wallet for. “Happy” Jack Chesbro continued in the tradition of turn of the century pitching dominance, when, in 1904, for the New York Highlanders [22], he ran up a record of 41-12, along with a 1.82 earned run average, 454 2/3 innings pitched, 239 strikeouts and a mind-boggling 48 complete games. [23] The 1904 season was Chesbro’s sixth in the major leagues, meaning that he would have been a free agent following the season, if he were playing under today’s rules. That would have made Jack quite happy, indeed.
Marc A. D'Antonio, Esq., is a staff attorney with the Massachusetts Bar Association responsible for the management of the Association’s Fee Arbitration Board. Mr. D’Antonio grew up in Southern California and bleeds Dodger Blue. Celebrity sightings are common at Chavez Ravine, and Mr. D’Antonio cannot understand why the Fenway faithful feel compelled to call their friends on cell phones when in clear view of the NESN cameras. (Want to be famous? Move to LA!)
Jared D. Correia, Esq., is a publications attorney with the Massachusetts Bar Association. Prior to joining the MBA, he was a private practice attorney, working in the areas of general practice and disability law. Mr. Correia, a lifelong Red Sox fan, hates the Yankees with the fire of a thousand suns, and is perplexed by the Dodger fan habit of both showing up late to and leaving early from games. (They probably don’t even know how to score a game, and think that Rally’s is only a place that serves hamburgers.)
Endnotes
[1] See http://quotes.zaadz.com/David_McKay, and the first quote presented on that page.
[3] The extra $22 being paid in homage to Clemens’ uniform number, 22.
[4] For details on the Clemens’ signing and contract, see Ronald Blum, “Yankees Lure Rocket with Huge Contract”, May 6, 2007, Associated Press, available, at the time of publication of this article, at: http://www.foxnews.com/wires/2007May06/0,4670,BBAYankeesClemensReturns,00.html
[5] See the “History of Baseball”, available, at the time of publication of this article, at: http://www.rpi.edu/~fiscap/history_files/history1.htm. This eponymous website prevents a tidy, truncated and occasionally irreverent look at the history of baseball. For proof of irreverancy, check out the photo of Alexander Cartwright on this page, where the venerable baseball man appears to be modeling a fire hat while pumping gas.
[10] 407 U.S. 258 (1972).
[13] See Generally Harold L. Vogel, The Economics of Professional Team Sports, Entertainment Industry Economics: A Guide for Financial Analysis at 263-264 (Cambridge University Press, 4th Edition 1998).
[15] Jackson in New York referred to himself as “the straw that stirs the drink.” He said of Claudell Wasington, “He plays the outfield like he’s trying to catch grenades.” For the Wasington quote, see “Quotes from Reggie Jackson”, available, at the time of publication of this article, at: http://baseball-almanac.com/quotes/quojackr.shtml
[16] Although Jim “Catfish” Hunter was the first, bona fide, big money free agent. However, Hunter’s Oakland Athletics’ contract was voided in 1974, due to the Athletics’ failure to fulfill certain contract terms. Hunter’s release occurred prior to the Messersmith/McNally decision, and so placed Hunter without the first free agent class. Although in both cases all three players became free agents, Hunter’s release from his contract was based on violations of existing contract terms; Messersmith and MacNally were determined not to have contracts. For a description of the Hunter situation, see Alex Belth, “Landmark Moments from Baseball’s Free Agent Era: From Catfish to A-Rod”, December 2, 2005, SI.com, available, at the time of publication of this article, at: http://sportsillustrated.cnn.com/2005/baseball/mlb/12/02/landmark.freeagency/index.html
[18] For more information on the Collusion saga, and the troubling stories of Raines and Dawson, see Alex Belth, “Landmark Moments from Baseball’s Free Agent Era: From Catfish to A-Rod”, December 2, 2005, SI.com, available, at the time of publication of this article, at: http://sportsillustrated.cnn.com/2005/baseball/mlb/12/02/landmark.freeagency/index.html, and Jonah Keri, “Baseball’s Silly Season”, December 6, 2006, ESPN.com’s Page 2, available, at the time of publication of this article, at: http://sports.espn.go.com/espn/page2/story?page=keri/061206
[19] Within three years, Jeter would be able to look over at third base and see Alex Rodriguez playing beside him, Rodriguez having taken his salary to the only place where it might conceivably fit within a financial framework that would allow for Rodriguez to have a decent team around him. The Yankees have been the vanguard of free agent spending since its very beginning, and the trade that brought Rodriguez from Texas to New York saw the team subsume the largest free agent contract in history, in an appropriate nod to the former Highlanders’ tradition.
[22] The New York Highlanders would later become the New York Yankees.