The past, present, and future of MLB collusion

Peter Ueberroth is not a name you hear very often these days. He kept busy after stepping down as commissioner of Major League Baseball in 1989, returning to the Olympic organizing that helped establish his profile on the American sports scene in the first place, and even ran for governor of California in 2003. He never did have a second chance in baseball — and with good reason. But you will be hearing about him as the 2018 season approaches, and likely for years to come.

That’s because we’re talking baseball collusion again.

The Collective Bargaining Agreement between Major League Baseball and the Players Union barred collusion in 1968 with the writing of this simple sentence:

Players shall not act in concert with other Players and Clubs shall not act in concert with other Clubs

With the rules on the book less than two decades, Ueberroth, in his role as MLB commissioner, encouraged the worst tendencies of ownership in the-free agency world, leading to three offseasons of collusion — in 1985, 1986, and 1987 — against the game’s free agents to limit salaries by eliminating competition between teams.

With the MLB offseason at a complete standstill, both before the trade of Giancarlo Stanton and the posting of Shohei Ohtani and after those deals were completed, the word “collusion” is once again coming into use in the baseball world. ”Really, the offseason hasn’t ‘developed’ at all,” wrote Zack Moser in Baseball Prospectus’ Wrigleyville in early January. Moser went on to say:

“The two perceived roadblocks that took the form of Shohei Ohtani and Giancarlo Stanton have been cleared for a month now; the Winter Meetings have come and gone; and the biggest signings so far have all been for relief pitchers. There is little on the rumor front to report, little evidence from which to draw any conclusions about the eventual destinations of Arrieta and Yu Darvish, of Alex Cobb or J.D. Martinez, of Eric Hosmer or Lorenzo Cain. The best free agents are still available for any team willing to make a move toward improving their squad for 2018 and beyond.”

While MLB owners were punished — and eventually had to pay up — for conspiring against players in the 1980s, the specter of collusion has clearly not left the sport, even though Ueberroth left his post in the aftermath of the scandal. These initial instances of collusion in Major League Baseball taught ownership and MLB’s commissioners valuable lessons about effectively and legally hoarding profits. It also foreshadowed issues that would weaken the MLBPA’s power over the following decades, bringing them into the situation they’re in today, up against a normalized, “legalized” form of collusion they can do almost nothing to stop, because they agreed to exist alongside it.

An understanding of what collusion has been in the past is necessary to see what might be going on in today’s game, because it appears as if MLB’s ownership learned from those mistakes made by Ueberroth, bringing them to these far more inconspicuous approaches to limiting the payouts baseball players are seeing.

In the eight years before Ueberroth took over as commissioner, MLB’s profits tripled to $625 million according to John Helyar’s Lords of the Realm, and then increased further as the age of the lucrative television deal dawned. The players were finally getting a real cut of that money thanks to the implementation of salary arbitration and owners who spent actual money on free agents. Ueberroth, who had become Time’s Man of the Year for his decisions that made the 1984 Olympics a financial success under his watch, demanded the teams put a stop to that, telling owners they were “damned dumb” for being fine with losing money in pursuit of a World Series.

“Let’s say I sat each of you down in front of a red button and a black button,” he said at one early meeting. “Push the red button and you’d win the World Series but lose $10 million. Push the black button and you would make $4 million and finish somewhere in the middle.”

He paused to look around. “The problem is, most of you would push the red one.”

Ueberroth chided them for checking their business sense at the door. “You are so damned dumb.”

Spreading his concern that television money would soon dry up, Ueberroth didn’t just get the owners to agree to limit contracts. He also confronted the general managers of each team to tell them to stop handing out long-term contracts. In Ueberroth’s mind, he was probably doing Braves’ owner Ted Turner a favor by making sure the GMs knew there were limits in place. Whether it was baseball — the $10 million Bruce Sutter contract with lucrative deferred payments stands out as one that baffled fellow owners and execs in 1984 — or his free-spending time at the helm of World Championship Wrestling (WCW) a decade later, Turner had relatively fewer worries than the commissioner when it came to spending on his properties to improve them.

To Ueberroth, this “red button” approach was an unqualified negative, as it could spur too much competition among ownership and cost them all money.

The result of Ueberroth inserting himself into the day-to-day business of each of the teams was a three-year run of collusion in MLB. This isn’t suspected collusion, either: this is “MLB owners were punished for their actions from three consecutive years” collusion.

There were 35 free agent players during the offseason that followed the 1985 campaign. Of those 35, four had new teams in 1986, and those four players only had new homes because their old teams didn’t want them any longer. Kirk Gibson, who had batted .287/.364/.518 in 1985 (good for a 140 OPS+), did not receive a contract offer from any club besides the Tigers, the team he was with in ‘85, and he wasn’t the only top player in that situation. Even more curious is Gibson did have potential suitors in the Royals ... until the first ownership meetings of the offseason were held, and suddenly Gibson was down to one option again.

While the owners did get in trouble for this when arbitrator Thomas T. Roberts ruled in favor of the players, that didn’t happen until late 1987. This means what was eventually known as “Collusion II” happened the season after Gibson and the other 34 free agents were colluded against.

In the winter of 1986-87, once again, just four free agents switched teams. Stars like Andre Dawson returned to their previous teams, and in Dawson’s case, took a pay cut: this despite a strong 1986 campaign, too. Three-fourths of the offseason’s free agents signed one-year deals. The average major-league salary declined for the first time since free agency came to exist, dropping by 16 percent, and, as Helyar wrote in Lords of the Realm, MLB’s profits rose by 15 percent at the same time.

The MLBPA filed “Collusion II” before “Collusion I” had even been heard, but these two formal complaints against ownership did not deter them nor Ueberroth. In fact, Roberts ruling against them simply caused them to switch up how they planned to collude: the winter of 1987-88 featured an information sharing plan, so every owner knew what the other teams were doing in free agency, and they could avoid severely outbidding the competition. Grievance number three, “Collusion III,” would come in response to this information sharing bank in January 1988.

All three cases ruled in favor of the players. “New look” free agency was implemented for the players impacted by collusion, so they could choose to search for new teams without having to give up the contract they had already signed. This is how Gibson ended up on the Dodgers in 1988, just in time to create one of the most memorable moments in World Series history, despite the previous lack of offers from anyone besides the Tigers.

Ueberroth was no longer in office by the time MLB and the MLBPA finally settled on what the combined penalties from three years of collusion would be. In the end, it was agreed that MLB owners had to pay the players $280 million, and the players were able to do with that money what they wanted. Fay Vincent, the new commissioner following the sudden death of Ueberroth’s successor, Bart Giamatti, wrote about this settlement in his book.

“The single biggest reality you guys have to face up to is collusion. You stole $280 million from the players, and the players are unified to a man around that issue, because you got caught and many of you are still involved.”

Marvin Miller, who fought for decades against the owners and for the players, in his own book A Whole Different Ball Game explained that these years of collusion were not just horrible for the players, but also hypocritical of ownership by likening collusion to the Black Sox scandal of 1919:

“It was undeniably, an agreement not to field the best team possible — tantamount to fixing, not just games, but entire pennant races, including all post-season series. If players had been found guilty of making agreements not to compete, the commissioner would have banned them for life and justifiably.”

The owners did not listen to Vincent, who seemed to be the only person in the room who understood why the players were upset about collusion, and instead staged a lockout before the 1990 season. This lockout began in February, and kept spring training from ever starting — it also ended with Vincent’s interference, which angered the owners to the point of attempting to remove him from office.

The owners hoped to institute pay-for-performance, revenue-sharing, and a salary cap, two of which were guaranteed to be severely limiting to the players, and considering that said players had just been wronged three years in a row on free agency by colluding owners, they weren’t exactly in a place where a discussion was even going to begin on those topics.

Vincent recognized this, and so when a chorus of owners, led by Bud Selig, agreed to let him join negotiations in a much more official manner, he came up with a far more player-friendly proposal that infuriated the owners, but also served to lead to the end of the lockout.

[Vincent] contributed his own nine-point plan, including:

Minimum salaries of $75,000, $125,000, and $200,000 for players in their first three years.

A 75 percent cap on raises in salary arbitration.

A joint committee to study revenue-sharing, with a report due in April 1991.

By the way, don’t get any ideas from this that Vincent was explicitly pro-labor: part of his later negotiations were trying to get the players to promise not to strike in exchange for the lockout coming to an end, a tactic solely meant to make the players look greedy upon refusal, in the hopes of turning public opinion against them.

An uncomfortably topical holdup on the players’ side during the 1990 lockout was the division between younger players and older players: the veterans didn’t care about salary arbitration nearly as much, as they had already started to see the benefits of free agent dollars, even amid years of collusion. The younger players, who had not yet gotten theirs and didn’t have anywhere near the bank accounts to fall back on, were concerned about being sold off as leverage, harming their present-day earnings in order to get the veterans what they would be satisfied with.

An anonymous player and “union activist” talked to Helyar about this issue for Lords of the Realm, stating that, “Back then, unity was easy, because we were going for something. Now it’s a more abstract thing of supporting the system. And the money is so big, you can’t go out and re-create the income from this job.” Veterans like Bob Boone and Paul Molitor sowed dissent throughout the union, as they were concerned about losing their big veteran paydays for a year due to the lockout instead of trying to keep the whole system of unity and solidarity, the one that allowed them the power to negotiate those salaries in the first place, alive.

The modern-day comparison is how the current MLBPA has continued to sell out amateurs and international players in order to try to uphold the earnings of veterans in baseball’s version of a trickle-down economic system. Now, international spending is severely capped, as is draft spending — you can thank Jerry Reinsdorf, one of the colluding owners from the 80s, for that — teams continually focusing on bringing up relatively inexpensive young players, and free agents derided as a poor investment again.

To top it all off, the percentage of profits players are bringing in has decreased, not increased, and the fall is alarming, as Nathaniel Grow detailed in a piece at FanGraphs before the 2015 season — at that point in time, players had fallen to below a 40 percent share of profits, down from a 56 percent peak in 2002. Now, they’re at a time when it seems much of the league has little interest in going beyond three-year deals, despite record profits and lucrative TV contracts — ownership doesn’t want that lower percentage to climb back up. A little bit of history would go a long way for the Players Union, as none of what they’re dealing with today is new other than the presentation.

Miller has passed on, and can’t directly come around to enlighten today’s players to the struggles of decades ago like he was able to in 1990, when he joined Donald Fehr in a meeting with the players to explain to them that this fight was worth their efforts even if the veterans already had their earnings and more promised to them.

“Failing to support the democratically arrived-at decisions of your negotiating committee, your executive director, and your staff can only have one result: a permanent loss of credibility. If you waver, you can count on one thing: the owners will never again take the player reps seriously. The issue here is no longer salary arbitration. It’s the future effectiveness of the union.”

Miller’s speech worked, the players rejected the offer discussed without the union’s voted-upon consent between Molitor and Selig, and the lockout would inevitably end with the players getting a salary arbitration victory that infuriated the owners, all thanks to their rediscovered sense of solidarity.

The lockout was caused in part by the fallout from the years of collusion, but the end of the lockout did not mean the end of the impact of those years. Vincent was given a vote of no-confidence and chose to resign following the lockout, and he was replaced by Selig, the owner of the Brewers. Selig was one of the colluding owners and a central figure in the lockout following that era.

Selig ran MLB during two rounds of expansion, which former commissioner Vincent told Forbes’ Maury Brown were a direct result of collusion: creating more teams was in part because MLB felt they were strong enough to grow and make more money, but also because doing so created more jobs for more baseball players, and that was one way to pay the union back for collusion and invest part of the $280 million owed the players.

There have been more collusion grievances over the years, but arbitrators have not ruled in favor of the players since the trio of decisions in the late-80s. This is not the same thing as saying the owners were innocent, however: the 2006 collective bargaining agreement included a damage payment to players for a charge of collusion from 2002-2003, one the owners never admitted guilt to but still felt the need to reach a $12 million settlement for, probably out of the goodness of their hearts.

In 2008, the MLBPA filed a grievance to support Barry Bonds, who, despite still being a monster offensive contributor who led the league in on-base percentage and managed a 169 OPS+ as a 42-year-old, could not find work — not even after saying he would have played for the league minimum salary. The grievance was abandoned when hard evidence came up lacking, but are you going to say with a straight face the Rays had no interest in bringing in an inexpensive-yet-problematic player who might help them win? Plenty of people have suggested his case had merit, even if it didn’t work out.

Will the MLBPA be able to file a grievance for collusion for the 2017-2018 offseason? It’s extremely unlikely unless some hard evidence materializes. The Players Association has had a significant hand in this successful power grab and reshaping of the MLB landscape by owners, thanks to their inability to think about more than just their own present-day, veteran-centric situation. They’ve played into the owners’ hands, and leveraged away the futures of potential union members, leaving them a weaker Players Association to inherit in the process.

The primary method for a player to earn his fair share of MLB’s profits is supposed to be through free agency, especially since other avenues have been lessened or entirely closed off. Now that the owners have the players in this position, and with what is essentially being treated as a hard salary cap now in place after the latest CBA negotiations, they no longer have to pay out in years or dollars what they needed to in the past. If no team is moving past the luxury tax threshold often or with the abandon teams like the Yankees and Dodgers have shown in the past, then it’s a salary cap in all but name.

Baseball’s vast middle class is going to suffer in this scenario, as there won’t be room for the very good but non-elite free agents of the world to pull in significant deals like in years past — not while the very best free agents begin to take up a higher percentage of now even more limited payroll space, and the rest of the roster is filled out by inexpensive prospects and minor leaguers, whose own arbitration payments could also go down as the value of free agent deals drops, too. Why do you think the 2017-2018 offseason is as quiet as it’s been?

You can argue that free agency is a bad business deal for teams, but it’s also the only avenue for players to earn their fair share of the profits they’ve produced for MLB. This is the trickle-down economic situation referenced earlier: profits will only trickle down so far, and the owners will become richer and richer. Players are forced to pay their dues and prove themselves in their pre-arbitration and arbitration years, with teams profiting the most from this one-sided arrangement, only to be told upon reaching free agency that they’re now too much of a liability to be signed for what they’re worth, which keeps the whole system one-sided from start to finish.

Miller warned about this lack of foresight in 1990 when explaining what the union was fighting for was more than just salary arbitration, and his words need to loudly echo into the present-day if we’re going to see a serious change in the way MLB ownership distributes the game’s income. For now, MLB players need to deal with what looks a whole lot like a legalized, codified form of collusion, and the realization that this is happening to them might be the spark they need to find the unity of their past once again.