Academic journal article International Journal of Sport Finance

Smooth Operators: Recent Collective Bargaining in Major League Baseball

Academic journal article International Journal of Sport Finance

Smooth Operators: Recent Collective Bargaining in Major League Baseball

Article excerpt

Abstract

In late 2011, at a time when other leagues such as the National Football League and the National Basketball Association had engaged in work stoppages, Major League Baseball owners and the MLB Players Association harmoniously agreed on a new five-year collective bargaining agreement. This article focuses on the reasons why MLB as an industry has maintained labor peace after decades of work stoppages. The primary aspects of the new MLB CBA, such as changes to the revenue sharing system, competitive balance tax, salary arbitration, and the amateur draft are addressed. The manner in which these economic mechanisms affect areas such as competitive balance will be analyzed. Lastly, a comparison was undertaken of the collective bargaining environment in MLB versus other professional sports leagues and other non-sports industries.

Keywords: Major League Baseball, collective bargaining, revenue sharing, free agency

Smooth Operators: Recent Collective Bargaining in Major League Baseball

In November of 2011, the ownership in Major League Baseball (MLB) and the Major League Baseball Players Association (MLBPA) announced they had agreed to a new five-year collective bargaining agreement (CBA) that would run through the end of the 2016 season. The announcement of this deal was unique in several ways. First, unlike recent CBA negotiations in other North American professional sports leagues such as the National Football League (NFL), the National Basketball Association (NBA), and the National Hockey League (NHL), these appeared to be rather harmonious. There was no war of words in the media between the two sides and the deal was struck before the end of the existing CBA.

Second, the threat of a work stoppage never appeared to be a possibility. This is in stark contrast to the other pro leagues mentioned above, which have seen recent work stoppages as a result of failed labor negotiations. For example, the NHL lost an entire season in 2004-05 due to the failure to agree on a new labor deal. More recently, the much-publicized NFL labor talks dragged on throughout the spring and summer of 2011 and resulted in lost out-of-season training activities and a delay in the opening of training camps. In the fall and winter of 2011, the NBA's season opening was delayed over two months due to a work stoppage. While a new CBA in the NBA was agreed upon after lengthy negotiations and bickering in the press, the season had to be shortened from 82 to 66 games with those games being played in a condensed 124-day period.

Third, the MLB labor negotiations were unique in their failure to attract media attention. The negotiations of other leagues seemed to dominate the popular press in recent years. The MLB deal was done with almost no controversy, negative statements, or in-fighting. Labor harmony appears to be omnipresent in MLB. Not only is this distinct from the other North American professional leagues, but it is a major deviation from the history of the relationship between team owners and the MLBPA. Between 1972 and 1994, no MLB collective bargaining agreement was made without some type of work stoppage, whether it was an owner lockout or player strike. While not all of these stoppages affected the regular season, all of them led to some delay in team activities such as training camp. Table 1 below shows the nature and extent of MLB's work stoppages.

It appears that team owners and the MLBPA learned a valuable lesson from their last work stoppage that occurred in 1994-95 and led to the first cancellation of the World Series in over a century. The cancellation of the Series and subsequent delay to the start of the 1995 season did significant short-term damage to MLB. The 1995 season saw a decrease in attendance and TV ratings. The relationship between work stoppages and spectator demand is somewhat unclear based on the current body of knowledge, as will be discussed later in the article. But for MLB in the post-World Series cancellation world of the mid-1990s, it took, in part, the 1998 home run chase of Mark McGwire and Sammy Sosa to bring fans back to the ballparks. …

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