A brief history of MLB labor stoppages

MLB

If you’re old enough, you remember when the belligerent relationship between major league players and owners led to a strike or lockout every four or five years, culminating in the depressing cancellation of the 1994 World Series. We’ve had labor peace since then, but that streak is about to end at 11:59 p.m. on Wednesday night, when the current collective bargaining agreement expires and owners are expected to lock out players. That means no trades involving major leaguers, no free-agent signings, no major league portion of the winter meetings, nothing but hope it all gets resolved before spring training.

The new CBA talks come at a delicate time for the sport. Total league revenue has been down the past two seasons due to COVID-19 and commissioner Rob Manfred claimed the sport suffered a $3 billion operating loss in 2020. It also hit an all-time revenue high in 2019 at more than $10 billion, however, and a new seven-year national TV deal that kicks in for 2022 will pay an average of $1.84 billion per season, up from $1.55 billion. According to Forbes estimates, franchise values continue to escalate. In 2020, Steve Cohen purchased the Mets for $2.475 billion and John Sherman purchased the Royals for $1 billion. Only one other team has been sold since 2012, suggesting that not many owners are trying to get out of the baseball business.

Meanwhile, the league would like to spice up the entertainment value of the on-field product, while the players see themselves receiving a declining percentage of league revenue and fewer franchises trying to field competitive teams. Frankly, it’s hard to feel any sympathy for anybody here. Aaron Loup, a 10-year veteran reliever with six career saves and no seasons with 60 innings pitched since 2014, just signed a two-year, $17 million contract. Neither side is exactly suffering.

As we stare at the lockout and the winter of negotiations ahead, it’s important to learn how we got here — there have been eight previous lockouts or player strikes — and how that history will influence what happens this winter.

1972 strike

Issue: Funding of pension plan
Games missed: 86

What happened: Marvin Miller, the executive director of the Major League Baseball Players Association from 1966 to 1982 and the person who helped build one of the most powerful unions in the country, wrote in his autobiography, “A Whole Different Ballgame,” that the players weren’t really asking for all that much. The union wanted the owners to increase funding for the pension plan so that retirement benefits would match the 17% rise in inflation that had occurred over the previous three years; basically, just a simple cost-of-living increase. “The owners had decided to bring the Players Association’s progress to a halt either by provoking a strike, which they felt confident in winning, or by forcing the players to back down,” Miller wrote.

The players went on strike on April 1. C.C. Johnson Spink, the editor of The Sporting News and a powerful voice in the sport, declared it the “darkest day in sports history.” Angels owner Gene Autry whined, “We ought to close down baseball forever!” The start of the season was canceled, eventually wiping out about a week’s worth of action until a four-year agreement was reached on the pension issue. Oddly, the missed games were simply not played, leaving uneven schedules, so the Tigers won the AL East with an 86-70 record, a half-game ahead of the Red Sox, who finished 85-70.

What it means for this winter: Under Miller’s leadership, the union had achieved various gains through the years — not just with a better pension plan, but with an improved grievance process, a raise in the minimum salary and, in 1968, the first collective bargaining agreement in any professional sport. The owners, seeing players make these inroads into the absolute control they had held for nearly a century, wanted a “victory.” So they dug in.

There is a feeling that current union chief Tony Clark similarly desires his own win. In the last CBA, which covered the 2017 to ’21 seasons, it was widely viewed that the owners had cleaned up on the union, which had focused on relatively minor issues such as more off days during the regular season and earlier start times for “getaway” games. Most notably, despite increasing revenue across the sport, the competitive balance tax barely moved upward. The average salary peaked at $4.45 million in 2017 and dropped to $4.17 million in 2021 (partially as a result of COVID, but it also fell in 2018 and 2019).

1973 lockout

Issue: Arbitration
Games missed: 0 (some spring training games canceled)

What happened: Without a new CBA in place, the owners locked out the players at the start of spring training. Before free agency and salary arbitration, the players had little negotiating power when discussing a new contract other than holding out — most famously, the dual holdout from Sandy Koufax and Don Drysdale of the Dodgers before the 1966 season, when they asked for three-year contracts for a total of $1 million between the two of them ($167,000 per season). In the end, Koufax settled for $125,000 for 1966 and Drysdale for $110,000. The players had no leverage, thus the push for salary arbitration to settle contract disputes.

The lockout lasted a couple of weeks before a new CBA was agreed upon — including salary arbitration for players with at least two years of major league service time. As Miller wrote, salary arbitration was a “major factor in eliminating gross inequities in the salary structures from club to club (and sometimes on the same club).” With the help of arbitration, the average salary would increase from $29,303 in 1970 to $44,676 in 1975.

What it means for this winter: Salary arbitration has become a foundation of fair pay across the board. A young player on the Rays can expect to earn a similar salary to a similar player on the Yankees. Currently, players are eligible for arbitration after three years of service time (22% are eligible with less than three years, known as Super Two players). The union would love to get younger players paid quicker — especially young stars like MVP runner-up Vladimir Guerrero Jr., who made just $605,400 in 2021, his third season in the majors, barely above the minimum salary of $570,000.

This ties into what ESPN’s Jeff Passan termed the “core economics” issue of this negotiation. Players are livid about the percentage of overall revenue they receive these days. Superstars get paid, but the middle class often gets frozen out in free agency and it takes too long for young players to get to arbitration. It also ties into the service time issue, when players are held back in the minors to preserve an extra season of team control before reaching free agency. This had risen to the forefront with Kris Bryant and the Cubs in 2015, but the union failed to address it in the 2017 CBA.

1976 lockout

Issue: Free agency
Games missed: 0 (some spring training games canceled)

What happened: In December 1975, arbitrator Peter Seitz ruled in a landmark decision that opened the door for free agency. For generations, owners had believed the reserve clause bound a player to his team in perpetuity. The clause gave a club a one-year option on a player’s services even after a signed contract expired. Miller immediately realized the hole in the language: What if a player didn’t sign a contract?

In 1975, Andy Messersmith and Dave McNally had their contracts automatically renewed by the Dodgers and Expos, respectively, under the provisions of the reserve clause. The MLBPA then filed grievances arguing that because the two players hadn’t signed new contracts, the one-year option no longer applied. Seitz ruled in their favor. McNally was injured and retired, but Messersmith, who had made $90,000 pitching for the Dodgers in 1975, signed a three-year, $1 million contract with the Braves.

The CBA expired on Dec. 31, 1975, and the owners locked out the players for 17 days in spring training. Finally, on March 17, at the behest of Dodgers owner Walter O’Malley, commissioner Bowie Kuhn ordered camps opened — it seemed the lockout was uniting the players rather than breaking them up. A new four-year CBA, with guidelines for free agency, was reached in July. Players would be eligible for free agency after six years of service time.

What it means for this winter: The six-year statute has held the test of time, but a few factors have put free agency rules back on the docket. First, free agency inflates the salaries of veteran players at the expense of younger players. Which is fine, if that’s how the union wants to distribute payroll, but the aging curve has changed since the end of the steroid era and teams increasingly give more playing time to younger (and cheaper) players. Consider the number of plate appearances given to position players in their age-31 or older seasons:

2001: 64,941
2011: 57,592
2021: 46,029

As mentioned above, teams are also often holding their best young players back in the minors, controlling them for closer to seven seasons than six. Is it fair that teams do that? The baseball media has largely come to call this service-time “manipulation,” although front offices will argue that they are acting in the long-term interests of the franchise. (Well, they can’t say this publicly. Indeed, Bryant filed a grievance over his service time, although an arbitrator ultimately ruled in favor of the Cubs.) Finally, players are worried about the competitive balance in the league: As more teams enter “rebuilding” phases, they play young, cheaper players — one reason those veteran hitters received nearly 19,000 fewer plate appearances than they did 20 years ago. As a result, salary growth has stalled.

So, back to free agency. The owners leaked a proposal over the summer that floated the idea of free agency at age 29.5. That’s a nonstarter for the players, although perhaps the MLBPA counters with a proposal of free agency at six years of service time or 29.5, whichever comes first — which helps players who reach the majors at an older age. No matter what, this is one of the big issues the two sides will be in heated discussions over.

1980 strike

Issue: Free-agent compensation
Gamed missed: 0 (some spring training games canceled)

What happened: The CBA expired after the 1979 season and with no new agreement in place, the players went on strike for the final eight days of spring training, promising to strike again if a new deal wasn’t reached by May 23. The major sticking point: Owners insisted free agency was ruining baseball. The average salary had more than doubled, from about $51,000 in 1976, to more than $113,000 in 1979. Owners claimed some teams were losing up to $1 million a year. “Unless we find oil under second base we will never survive,” Kuhn proclaimed. The owners’ remedy: Better compensation for teams losing free agents, which would theoretically deflate the free-agent market.

The sides reached a new agreement in the early-morning hours of May 23 to avoid another strike — settling all issues except free-agent compensation. That would be tabled for another year.

What it means for this winter: That’ll require us to also consider the ….

1981 strike

Issue: Free-agent compensation
Games missed: 713

What happened: At an impasse regarding free-agent compensation, the owners implemented a plan that required any team that signed a free agent to lose a rostered player as well as a draft pick. The players went on strike on June 12. The owners, with a $50 million strike insurance policy, were in no rush to settle.

The sides reached a new deal on July 31, with the season resuming on Aug. 9. Not coincidentally, according to Miller, the owners’ insurance policy expired on Aug. 8. Thus came the infamous split season, with the first-half and second-half winners of each division meeting in the first-ever division series. The Reds had the best overall record in the majors but didn’t win either half of the NL West, so they didn’t reach the postseason. Likewise for the Cardinals, who had the best overall record in the NL East.

What it means for this winter: The compensation rules of the 1981 agreement were rather complicated, but the basics were that teams losing a ranking free agent (players were classified as Type A or Type B free agents) would receive a professional player as well as an amateur draft pick (teams could protect 24 to 26 players). The professional could come from any organization. For example, the Mariners lost free agent Floyd Bannister to the White Sox in 1983, but drafted minor leaguer Danny Tartabull from the Reds organization.

Some owners were not happy. Eddie Chiles of the Rangers said, “This is what we struck 50 days for? This is what we won? I can still lose a player off my roster without getting one myself?” Ray Grebey, the owners’ negotiator, called it a “a million-dollar strike over a 10-cent issue,” but Miller argued in his book that because the owners hadn’t won any significant new restraints on free agency, salaries continued to rise — indeed, the average pre-strike salary doubled from $186,000 in 1981 to $371,000 by 1985. Still, the owners did manage to keep some form of compensation for losing a free agent — and it has continued to exist through the years. The Angels, for example, drafted Mike Trout with a pick obtained from losing free-agent Mark Teixeira to the Yankees.

Free-agent compensation is more limited than ever, as only those given a qualifying offer (there were 14 such players this offseason) are tied to draft picks, but that can hold a minor constraint on contract offers. Several players through the years have accepted the qualifying offer rather than head to free agency, for fear that their market value will be decreased by the resulting draft-pick penalty. Compensation was once viewed as a way to protect small-revenue teams that couldn’t afford free agents, but many of those players are now traded anyway before reaching free agency — such as Francisco Lindor going from Cleveland to the Mets last offseason.

1985 strike

Issue: Salary arbitration, pension plan
Games missed: 25 (rescheduled)

What happened: On Aug. 6, the players went on a midseason strike for the second time. Two days of games were canceled (and eventually made up) before the two sides reached agreement on a new five-year CBA. The primary obstacle was once again salary arbitration, which the owners wanted to eliminate. In the end, arbitration eligibility was increased from two seasons of service time to three and the union accepted a healthy raise in the pension plan (but less than the one-third percentage it had previously been receiving from national TV and radio contracts). Miller wrote that the players “accepted defeat,” and that for the first time the union’s progress had been interrupted.

What it means for this winter: See above. The players have never gotten back to the two-year requirement for arbitration rights they once possessed. Keeping salaries down for players early in their careers will remain a key battle point for the owners.

1990 lockout

Issue: Revenue sharing/salary cap/pay-for-performance
Games missed: 78 (rescheduled)

What happened: With the CBA expired, the owners announced they had locked out the players at the start of spring training. It lasted 32 days before a new four-year agreement was reached March 18, pushing the start of the season back a week (although all games were made up and a full 162-game season played).

Distrust between owners and players reached new heights in the late 1980s when it was later determined that commissioner Peter Ueberroth and the 26 clubs conspired to limit bidding on free agents following the 1985, ’86 and ’87 seasons. The owners would settle the collusion cases for a combined $280 million in November 1990, which led to them approving expansion franchises in Florida and Colorado for the 1993 season to recoup their losses.

At the heart of this dispute was, again, salary arbitration. The owners had proposed a revenue-sharing plan, with 48% of gate and broadcast money going to the players, but with a maximum and minimum salary cap and replacing arbitration with a “pay-for-performance” metric to determine salaries. The players, with the long-held belief that a salary cap decreased salaries, ended up winning slightly increased arbitration rights, with 17% of those with more than two but less than three years of service time being eligible — and the various revenue-sharing plans summarily dismissed.

What it means for this winter: From a timing standpoint, keep the dates from this lockout in mind. If a lockout goes beyond mid-March, you’re looking at the start of the season getting delayed and fewer than 162 regular-season games getting played unless you want to push the World Series into mid-November. (“Hi, this is Joe Buck … Happy Thanksgiving and welcome to Game 7 of the World Series. It’s 28 degrees and snowing today in Detroit, but they’re going to try and play through this. It’s only a light snowfall of a couple inches so far.”)

The owners did eventually negotiate a form of a salary cap with the “competitive balance” tax (first began in 1997 with a levy on the five highest payrolls). This remains a central premise to the owners’ revenue-sharing policy — or, some might suggest, a successful hold on keeping down the payrolls of the highest-revenue teams. This past summer, the owners’ leaked proposal included a tax threshold of $180 million with a salary floor of $100 million (none currently exists). That looked like another nonstarter, given the 2021 tax threshold was $210 million — which effectively served as a hard cap as, according to Spotrac, only the Dodgers exceeded the limit. (Of note, six teams were between $180 million and $210 million, while 11 were below $100 million.)

1994-95 strike

Issue: Salary cap
Games missed: 669 (and the World Series) in 1994; 252 in 1995

What happened: This was the big one. The players, fearful owners would implement a salary cap after the 1994 CBA expired, went on strike Aug. 12, 1994. Acting commissioner Bud Selig canceled the rest of the season and the playoffs on Sept. 14. After negotiations broke down in December, the owners unilaterally implemented a salary cap, leading MLBPA executive director Donald Fehr to declare all 895 unsigned players free agents. The owners approved use of replacement players, so spring training began with strike-breakers (mostly minor leaguers). The National Labor Relations Board charged that the owners had not negotiated in good faith. Yes, it was ugly.

Finally, after federal judge and now Supreme Court Justice Sonia Sotomayor issued an injunction restoring terms of the expired 1990-1993 CBA, the players agreed to end their strike on April 2, 1995. The season started in late April with a truncated 144-game schedule.

What it means for this winter: Major league average attendance in 1994 was a then-record 31,256 fans per game. When the sport returned in 1995, fans not surprisingly turned up in far fewer numbers, and attendance fell to 25,021 per game. It wasn’t until 2004 that it again reached 30,000 per game. Note that even before COVID excluded fans in 2020 and led to decreased numbers in 2021, in-game attendance was already in decline. The 2019 average of 28,203 was the lowest since 2003. An extended lockout that goes into the regular season would undoubtedly turn more fans away from the sport, just as the 1994-95 strike did.

Related to the attendance issue is the concern MLB officials have in improving the on-field product — hoping to speed up the pace of play (games averaged 3 hours, 10 minutes in 2021) but increase the amount of action. Over the summer, Clark told reporters that the players “are willing to talk about adjustments” in the game, but the feeling is they view some in-game issues as a negotiating strategy to gain a bigger bargaining chip on economic matters.

In a sense, that makes this CBA negotiation even more complicated than those from two and three decades ago. As always, it will be about the money, with rich players fighting wealthy owners. In a 36-page lockout guide the MLBPA sent to players and agents, the union announced, “A broad assessment of our industry shows that player value and player compensation are not moving in the right direction,” according to J.P Hoornstra of the Southern California News Group. “We have fundamental concerns about the integrity of the system as it is currently operating.”

That sounds like we all might have to dig in for a winter of inactivity. Spring training games are scheduled to start Feb. 26. Don’t schedule that trip to Arizona or Florida just yet.

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