Part 18 of our series on Important Moments in Team Building. See introduction, and up-to-date list.
In the years following his 1966 hiring as the MLBPA’s executive director, Marvin Miller began educating the players about the “reserve clause”, the paragraph in the standard baseball contract that bound a player to a team for life. Miller believed the clause was unethical and illegal, but he also questioned whether the clause actually said what baseball people (clubs and owners) had long believed it said.
The “reserve clause” was Paragraph 10-A of the standard contract and read, in part: “On or before December 20 (or if a Sunday, then the next preceding business day) in the year of the last playing season covered by the contract, the Club may tender to the Player a contract for the term of that year by mailing the same to the Player at his address following his signature hereto, or if none be given, then at his last address of record with the Club.” If a player and club could not agree on contract terms for the following year, the club could renew the previous contract at a rate not less than 80% of the prior year’s terms.
Since the 19th century, this meant that every off-season each team would “reserve” all of the players it wanted to keep for next year. A player would be reserved year after year until he was deemed no longer useful, and then the club would release him or he would retire.
In early 1970, outfielder Curt Flood—having just been traded from the Cardinals to the Phillies—sued major league baseball in federal court, asking the court to invalidate the clause and give him the right to sign with any team he wished. Flood ultimately lost his case in the US Supreme Court, but his struggle, and the obvious panic it induced in the owners, helped to strengthen the players’ resolve and persuade many in the media of the merits of his case.
The first significant modification to the reserve clause actually came in the 1973 CBA, when all players with ten years experience and five with their current club, had to approve any trade to another. This rule, known as the 10/5 rule, would have applied to Flood, who likely would have vetoed the trade and stayed with the Cardinals. The first player to veto a trade was Ron Santo in late 1973, when he called off the Cubs attempt to trade him to the Angels.
In the mean time the union was eyeing another tactic.
Marvin Miller’s interpretation of the reserve clause was that if a player did not sign his contract, and played out the year under the renewed terms, the reserve clause would not apply the following off-season, making the player a free agent. The club’s interpretation was that the entire contract, including 10-A, was renewed. Miller wondered what a neutral arbitrator would decide, if the clause were ever tested?
The first player to play a large part of the season under a renewed contract was Cardinals catcher Ted Simmons in 1972. Simmons signed for a hefty pay increase around the All-Star break, an increase he likely would not have gotten without the threat his situation imposed. In 1973 seven players played into the season without signed contracts, but all either signed or were released.
In 1974, Yankee pitcher Sparky Lyle and Padres outfielder Bobby Tolan went all the way to the goal line, until Lyle signed a two-year deal on the final day of the regular season. On October 17, the still-unsigned Tolan filed a grievance. Just prior to the hearing he signed a two-year deal for the terms he had been requesting. Marvin Miller was careful never to advise players to sign or not sign contracts—he just made certain they understood the law, and their rights. He was happy for Tolan, but still hoped for a test case.
Finally, in 1975, Dodger pitcher Andy Messersmith and Expos pitcher Dave McNally (who retired during the season but agreed to join the case) made it into the end zone. On December 23, 1975, arbitrator Peter Seitz ruled for Messersmith and McNally, dramatically altering the balance of power between baseball players and their clubs and how a general manager could build his team. Seitz ruled that the infamous “reserve clause” in the standard player contract did not in fact bind a player to his club endlessly but merely for one additional season, and that the two players were now free agents.
Since the Messersmith ruling, most labor negotiations have hinged on the owners attempts to reduce the freedoms that Seitz gave the players in 1975 – by limiting free agency to six-year veterans, by requiring some sort of compensation going to the team that lost the player (the details of which have changed many times), or by taxing team payrolls.
At the time of the Messersmith decision, many observers predicted that salaries would skyrocket and that baseball would suffer terrible harm. “Without a reserve system,” Commissioner Bowie Kuhn testified, “our vast array of minor leagues would hardly survive. It is not hard to imagine that we could even lose a major league.” But many also believed that the owners were little concerned with principal. “It is the price of human flesh that has scandalized the baseball establishment,” Red Smith wrote, “not the barter of human flesh.”
In the end, of course, the game did not crumble. Baseball revenues (bolstered by enormous television revenue, stadium enhancement, merchandising, and advanced media income) have skyrocketed beyond what could have been imagined in 1975. Moreover, the associated massive escalation in franchise values has more than offset the jump in salaries.
It is important to recall that Seitz’s decision essentially allowed any player to play out their contract and become a free agent. The owners, suitably panicked, briefly locked the players out of spring training in 1976, before the two sides eventually signed a new CBA in mid-summer. The new deal created the model that we have today, giving free agency to players with six years of major league service time.
But for the past 40 years, salary and service time are of paramount importance when building and maintaining a roster. The days of trading for veteran stars had practically come to an end.