Unions and Compensation in Major League Baseball

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Table of Contents

History of Professional Baseball Unions
Impacts of the Unionization on Players, owners and the Baseball Game
Factors that Determine Player Compensation Packages in Baseball
Roles of Unions to Player Compensation
Conclusion
Reference List

Baseball as a game in the U.S. traces its origins back to the year 1978, when the game had no formal rules and special equipments. Although the game at this time was “crude” due to lack of rules, proper organization and representation, this never prevented its spreading because of its popularity that was spreading fast among the American citizens.

By late 1860’s there was calls for need to professionalize the game; something that contributed to its development into a national game. Due to many complications that were arising due to the uncontrolled rate at which the game was expanding, there was need for formation of a national body that was to govern the game; hence the formation of the National Association of Baseball players (NABBP).

Although not all clubs joined the organization, at least those that joined it made it to grow as a national organization that managed baseball activities. With time due to diversification of the game, there has been many major transformations and re-organization of the game, hence its present status as a well-known and respected game.

For example, although previously individuals had tried to professionalize the game, there efforts achieved less due to many divisions and wrangles that existed. In many ways, this managerial wrangles and divisions were the main contributors or major building blocks of the currently existing baseball developments.

For example, the managerial wrangles led to the formation of the USA Baseball in 1978; an organization mandated with the role of governing the game in the U.S. this organization closely collaborates with the U.S. Olympic committee in trying to improve the quality of the game.

It achieves this through promoting of several activities that include major tournaments, minor and major leagues. Majority of participants in these activities are either high school students or individual who have embraced the game as their professional activity.

This organization has led to the success of the game, because it has enabled the team to win a number of medals both in national and international tournaments (History of Baseball, (n.d.), p.1). This paper will discuss concepts of the unionization of professional baseball, impacts of the unionization of the game to players, managers and the game in general. It will further discuss the roles played by the baseball unions as concerns player remuneration and compensation; primarily on factors that determine player compensations.

History of Professional Baseball Unions

Prior to 1871, baseball had no organized professional management bodies, but rather the game followed informal procedures and rules. In addition, because of the informal organization of the game, there were no special playing equipments and standards, which players and teams were to meet.

Although this was the case, it never lasted for long with the formation of the National Association of professional Baseball players in 1871. The government mandated this organization with the overall role of controlling the game, organizing tournaments, and dealing with problems that arose in during the game or among different participants and stakeholders.

Although this was a professional body, which in common scenarios is supposed to be well organized and structured, NABBP lacked the required structural organization, something that made it hard for it to control player’s affairs (Baseball Labor History, 1997, Para. 1-2) . This is because many players had no single clubs they could identify themselves with, because they kept on moving from one to another in for search “greener pastures”.

This never lasted for long, because later on in 1876 under the leadership of Hulbert, the National League of Professional Baseball Players came to existence. The primary aim of this organization was to control the unrestrained movements of players across different teams with no formal procedures. In addition, William’s another aim was to ensure that, club managers had major control over these teams and not as the case was previously where players had all the freedom of doing whatever they wished.

Many changes came as a result of the formation of this organization, an example being the selection of five best players to join major clubs that managements decided at the termination of each playing period. The managements named this the “reserve Clause”, something that contributed to the introduction of contractual terms. Contractual terms in many ways came with many limitations on players in that, there freedom was now limited because of denial of transfer rights.

In addition, previously players could negotiate their payment terms, however with the introduction of this clause, such rights were limited to players, instead the team owner had the rights of deciding the remuneration and benefit amounts. On the other hand, these introduced a new concept of contract renewing, whereby clubs could “sell’ their players to other clubs in exchange for money although players were unwilling to join such clubs.

The whole idea of baseball players’ remuneration underwent many changes as time advanced because the quality of the game was deteriorating; a factor that resulted due to low motivational levels in players because, clubs denied then chances of joining clubs of their choices.

In addition, the introduction of the salary cap by one baseball club proprietor; Goodwill Spalding led to increased wrangles in baseball management. This is because each club player was to receive approximately $2500 annually, an amount that was far below what was appropriate. Many individuals received this with mixed reactions, hence causing the formation of another baseball union called Brotherhood Professional Baseball Players.

This organization came into being because majority of individual felt that club owners were overexploiting players hence, misusing their talent. This received a revolt from club owners, because they too felt isolated and despised by simple players whom they could control. This prompted them to react back by imposing some uniform fees on players (Baseball Labor History, 1997, Para. 4).

Although this league helped to fight for players’ rights, it never lasted for long because of the opposition that it faced from club owners; primarily Spalding, hence the re-adoption of the previous reserve clause. Many players opposed this clause because it constrained their rights, something that led to the filing of a court case in early 1920’s, which the baseball won.

This marked the onset of the many cases that followed due to wrangles between baseball players and club owners; a factor that primarily contributed to the call for reformulation of the baseball antitrust law.

This calls yielded little because, the overexploitation continued for some time, hence making players to consider the option of forming a giant baseball organization to defend their rights. In addition, the fact that players had problems with club owners as concerns pension plans also contributed greatly to the call for the formation of a grand organization that was to foresee the articulation of players’ rights.

Although most baseball leader’s efforts gained little, the fight to unionize baseball never stopped because as time advanced many other individuals and players came up with initiatives whose main mandate was to fight for baseball players rights. For example, in early 1990’s through collaboration with other baseball stakeholders, baseball players formed the Player’s Protective Association (PPA). This organization’s main mandate was to fight for players’ remuneration rights and enhancement of playing conditions.

Later on in 1912, through collaboration with other bodies that fought for other sport players’ rights, baseball players came up with the Fraternity of Professional Baseball Players; an organization that also was to fight for their rights. Little success of these organizations never stopped players from struggling for representation, because in 1946 they formed another body that was to articulate their rights called the American Baseball Guild (Major League Baseball Players Association (MLBPA), 2010, p.1).

Still up to mid the 19^th century these formed organizations had achieved little as concerned the abolishing or restructuring of the reserve clause. It is important to note here that, the major reason why the players wanted to eliminate or change the reserve clause is because, it had tied players to specific clubs hence, denying them transfer rights to clubs they longed to move to.

The little achievement by previously formed baseball unions was not a demoralizing factor to players. This is because although the fruits from such organizations were less, in 1965 players re-organized themselves in order to develop proper strategies of putting forward their grief. Their struggle for recognition made then to seek help from external sources; hence the appointing of Marvin Miller as their leader.

This marked the onset of a major transformation in terms of baseball unions because the appointment later turned out to be success factor because of his representational skills. Players appointed him because they believed that Marvin had the power of influencing the government and negotiating with club owners on players’ rights.

The concept of miller leading the players association received many oppositions from club owners, whereby their struggles to eliminate him from this leadership position were fruitless. Miller fought to ensure the union had enough funds to manage its affairs. To achieve this, he came up with the concept of a licensing plan that was to ensure that all baseball players were registered and accepted members of a specific representational organization.

In addition, he came up with a tutoring and mentoring programs, whose main aim was to ensuring players expressed their grief with solidarity, hence the need to abolish differences that existed amongst them. His efforts gained many fruits for example, in 1968 through his leadership and using his influencing power, the union won a case that led to the formulation and signing of a collective bargaining agreement (CBA) is the sports sector.

This agreement was one of its kinds in this industry because; it prompted most club managements to increase players’ salary to $10,000 (MLBPA, 2010, Para. 5). His struggle to see respect of players’ rights never stopped here, because in 1970 through negotiations with club owners and other stakeholders, players received arbitration rights, when it came to handling of players’ problems.

Granting of arbitration rights marked the onset of many achievements that followed as concerned baseball players’ rights. It is necessary to note here that, Miller’s achievements not only enhanced the respect of baseball players, but rather it had impacts in all sports sectors; hence, the accordance of respect to professional sport. Throughout Miller’s reign much happened in the sports world, in terms of developments and respect of players’ rights.

His great achievements included the introduction of licenses in sports, improvement of contractual terms, and adoption of correct pension schemes by organizations. In addition, his struggle to increase the unions saw the expansion of the union to international standards, something that unions and individual feel even today. This is because currently, MLBPA is one of the most prominent and powerful sports organizations in not only America, but also globally (Korr, 2003, p.1).

The concept of the reserve clause received much opposition and faced many court challenges, whereby finally under arbitration the concept of free agency came into being. This abolished the monopoly enjoyed by many clubs in that, it helped to abolish the continuous tendencies of clubs renewing players’ contracts without their consent.

MLBPA has undergone many changes, and has seen many leaders come an go, whereby some of the leaders who have seen the union sail through changing hard times include Ken Moffet (after miller) and Fehr. Other developments after Miller’s achievement include increase in revenue amounts, restricting of the free agent market that made club owners enjoy the monopoly as concerned the signing of new contracts.

This in any ways has contributed to compensation of players for their rights abused by club owners, for example in 1990; players received $280 million from club owners. Achievement of these has never been smooth in that, it had to involve unrests and boycotts from players for example the 232-day boycott in 1994 to 1995. This in many ways enhanced negotiation standards and agreements rates, something that was very clear during the 2002 signing of a new sort contract (MLBPA, 2010, p.1).

Impacts of the Unionization on Players, owners and the Baseball Game

In common practice, the main aim of all players’ organizations is to fight and a ensure team managements and club owners respect all player rights. The case has not been different in MLBPA; owing to the many struggles, it has undergone to achieve its present status, primarily because of the much turmoil, which it had to undergo in the past.

For example to achieve its present status, the union had to organize many strikes and work boycotts. In addition, in some instances it had to file court cases, whereby it lost and won some. On the other hand, where the court cases failed, arbitration had to prevail, hence the current achievements of the union.

Although the quality of the game has had a major boost, players have benefited most because of the freedom that abolishing of the reserve clause granted them. Currently baseball players have employment rights, a scenario that contrasts to what existed previously where, club owners enjoyed the monopoly of controlling all baseball activities.

Under Miller’s leadership, club owners granted players collective bargaining opportunities through agreements signed between the two parties; players and club owners. Such like developments have contributed to the currently earned good salaries by baseball players, as compared to the past when their salary was little to sustain a good living (Goodman, 2000, p.1).

In addition, players have arbitration rights, something that is a major boost to the formalities of solving players’ problems. These rights have achieved a lot for example, in 1989, players benefited from a damage compensation that amounted to $ 38 million. In addition through this arbitration rights, player have received other benefits either in form of salaries or compensations from club owners incase something in cases where problems occur during playing time.

Currently players have information access rights, something that the club owners tried to constrain during early times when there existed many contending issues between the two parties. Apart from material gains, the unionization of baseball has created strong baseball teams whose solidarity has brought many achievements, which has contributed to talent exploitation hence the coming up of many stars for example, Barry Bonds and Sammy Sosa (MLBPA, 2010, p.1).

On the other hand, the unionization has contributed greatly to the increasing bargaining power of players. MLBPA represents all players’ grievances in court and to baseball club owners. Hence, due the nature of the power they posses, they have helped baseball players to express their grievance hence, bettering their negotiating terms.

Although the unionization of professional baseball has contributed a lot to players’ well-being, to some extent it has contributed to the downfall of players who never participated in the strike. This is because to the union the young players’ act of not joining others in the strike deviated from the union’s rules hence, the only way of punishing them is by denying them union memberships. This has greatly contributed to talent wastage, because they are not entitled to benefit from any deals by the union (Kendrick, 2010, p.1).

To club owners, considering the amount of fines resulting from compensations, management of most baseball teams have little to celebrate for, because these compensations are major sources of looses. Baseball unions from time to time have challenged any management orientation club owners adopt; any time they feel, such changes are violating player’s rights. In many ways, this has made management hard in that, from time to time there are policy changes, something that costs club owners substantial amounts of money.

Although the above is the case as concerns managements, at least the same has helped to shape management practices of teams. This is because currently, clubs give players the required respect and recognition, something that was rare previously during the reign of Albert Spalding as a club owner.

The game has received a major boost in terms of quality and standards. Previously, the “reserve clause” and the contractual terms was a major demoralizing factor because, players could not afford to play for their dream teams. With the formation of MLPBA, club managers adopted better managerial policies that saw the change of contractual terms hence, guaranteeing players their individual freedoms.

On the other hand, previously there were much segregation in terms of players in specific baseball teams, whereby there existed clear divisions between the whites and black Americans. This led to the formation of the Negro League Baseball Players Association. However, due to unionization such segregations have vanished because of equal representation.

This in many ways has contributed to the development of the game to international standards, because every registered player has equal chances of exhibiting their expertise as far as the game is concerned (Negro League Baseball Players Association, 2007, p.1).

Factors that Determine Player Compensation Packages in Baseball

Currently, professional sport has undergone many transformations in terms of diversification, hence making the entire field a multifaceted field. Depending on one’s competence in terms of playing skills and how much fans like one, one becomes a good marketing tool of clubs they belong.

Majority of organizations adopt the incentive plan, for most management considers it the most appropriate mechanism of encouraging performance. The same is not different when it comes to professional sports, because for players to maintain high playing standards, club managements have to adopt the same measures. The overall role of determining the remuneration packages of baseball players rests with the Major League Baseball players Union.

The league achieves its mandate by employing the use of collective bargaining agreements. Depending whether a player is in the national league or in the American league, the remuneration packages vary accordingly. In addition, negotiation also forms the foundation of any remuneration package a player receives hence, the importance of unions as main negotiators (Manzano, 2006, p.1).

Any baseball player is entitled to a specific minimum salary. In addition, to the minimum salary, clubs add other performance related monetary benefits; depending on terms of agreements. For a player to have arbitration rights, they have to be in the league for a minimum of three years, whereby contractual renewal terms determine the amount of salary that a player earns.

After the third year; when the clubs are renewing contracts, the salary varies depending also on the new contractual terms. Generally, a player’s remuneration package depends on achievements; in terms of game quality and the representing union’s agents during negotiations (Miller, 2000, pp. 87-88).

Roles of Unions to Player Compensation

The remuneration packages of baseball players in most cases depend primarily on the strength of the negotiator(s). Players on their own cannot afford to negotiate good contractual terms hence, the need for representation by agent provided by unions where they belong. This is the case, because sometimes working conditions may be unfavorable or their may exist many contending issue under consideration.

In addition, because majority of players have little knowledge about the nature of benefits they should receive from their clubs, special representation by union agents ensures club managers do not take advantage over them. This ensures club owners award players good remuneration packages through the process of structuring the wage benefits (Milkovich & Newman, 2007, pp. 94-97).

Although one may argue that, contractual terms are clear hence, no need for one to be represented by a union member, it is necessary for individuals to remember that, contractual term are alterable before one signs a contract. Hence, the use of an agent guarantees improved contractual terms, which translates to better benefits.

In addition, unions’ representation can act as a security measure because many changes can occur in terms of skill demand and competition (Milkovich & Newman, 2007, p. 504). Therefore, to ensure there is job security and assurance of continuous gaining, it is important for players to have representation from a union, it being a corporate and registered body, hence has rights to defend an individual in case something wrong happens in the course of the game.

Conclusion

In conclusion, baseball unionization has undergone a major transformation process. This is because a comparison between the past and present quality and standards of the game clearly shows that, the game has undergone an evolution. The evolution is in terms of managerial qualities, policy developments, and changes in the general practice of the game.

Reference List

Baseball labor History. (1997). An old fashioned game with old fashioned traditions. Web.

Goodman, A. (2000). Sports Law History: the role of Marvin Miller. Web.

History of Baseball. Baseball. Web.

Kendrick, S. (2010). 1994-95 effects are felt, at least on video games. About Baseball. Web.

Korr, C. (2003). Baseball union. Dictionary of American History. Web.

Major League Baseball Players Association (MLBPA). MLBPA information. MLBPA Players. Web.

Manzano, C. (2006). The business of baseball: how do players earn such Big salaries. Law Offices of Catalina L. Manzano. Web.

Milkovich, G., & Newman, J. (2007). Compensation (9^th e.d.). New York: McGraw-Hill/Irwin Publishers.

Miller, P. (2000). A theoretical and empirical comparison of free agent and Arbitration-eligible salaries negotiated in major league baseball. Southern Economic Journal, 67(1), 87-104. Web.

Negro League Baseball Players Association. History of Major Negro Leagues Association. NLPBA. Web.

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