Fifty years after free agency, another shock to the system looms
- The San Juan Daily Star
- 2 minutes ago
- 6 min read
By BRITTANY GHIROLI / THE ATHLETIC
While Kyle Schwarber (five years, $150 million) and Edwin Díaz (three years, $69 million) agreed to record-breaking free-agent deals a few minutes apart Dec. 8, agent Scott Boras held court with dozens of reporters at baseball’s winter meetings in Orlando, Florida.
Boras, who does not represent Schwarber or Díaz, discussed his own free-agent group, which includes third baseman Alex Bregman, pitcher Ranger Suárez and first baseman Pete Alonso, who days later signed a five-year, $155 million deal with the Baltimore Orioles. Later in the day, Boras sat next to his client Dylan Cease as the pitcher was formally introduced by the Toronto Blue Jays after signing a seven-year, $210 million deal, the largest free-agent contract in Blue Jays history.
This offseason, there may not be any deals that exceed the ones signed by Shohei Ohtani (10 years, $700 million) and Juan Soto (15 years, $765 million), but the money flowing in free agency is an indication that the baseball business is good. For how long is anyone’s guess.
Last month, multiple general managers said they were not approaching this winter any differently despite the collective bargaining agreement between owners and players entering its final year. Negotiations on a new collective bargaining agreement could be contentious. Both sides want to challenge the current system; team owners believe free-agent salaries have gotten out of control, and the players union wants to challenge certain teams to spend more.
It’s a story that has been going on for 50 years, ever since arbitrator Peter Seitz’s landmark decision birthed free agency as we know it, forever changing the sport’s labor economics and tilting its power structure.
On Dec. 23, 1975, Seitz ruled in favor of pitchers Andy Messersmith and Dave McNally, both of whom filed grievances claiming that they should not be held to the sport’s antiquated standard reserve clause, which automatically extended a player’s contract for an additional year unless the player was released, retired or traded — effectively binding a player to one team and removing his ability to negotiate with other clubs. The 1976 collective bargaining agreement, completed in July after a brief March lockout, included a provision for free agency after six years of MLB service time.
“There was no question it was disruptive and historic,” said former big leaguer Phil Garner, who was a part of the player negotiating team. He added, “We were trying to do something that had never been done before: dismantle the whole system.”
Before the Seitz decision, there was outfielder Curt Flood, who, after being traded from the St. Louis Cardinals to the Philadelphia Phillies after the 1969 season, filed an antitrust suit after the commissioner at the time, Bowie Kuhn, rejected his request to become a free agent.
“After 12 years in the major leagues, I do not feel that I am a piece of property to be bought and sold irrespective of my wishes,” Flood wrote in a letter to Kuhn.
Flood lost his case in the Supreme Court. No active player testified on his behalf, fearing retaliation from team owners.
“He kicked the door open for players protecting themselves and making sure they were treated in a reasonable, honorable manner,” his widow, Judy Pace Flood, said. “And it cost him dearly.”
In the 1970 labor agreement, under former union head Marvin Miller’s guidance, the players bargained for the right to have an impartial arbitrator to hear grievances, an important step that removed the conflicts from the legal system. Three years later — after a 17-day spring training lockout — a salary arbitration system was agreed upon that raised the salaries of players with a certain amount of service time. Miller would later say the marriage of arbitration and free agency changed the sport’s economics.
“It was so hard to get money then because you had no alternative. When I hurt my arm, they cut my salary,” said Jim Palmer, who spent his entire 19-year career with the Orioles. “Everything was a struggle then. You had to beg, you had to get on your knees and grovel to be treated fairly.”
In November 1974, Jim Hunter, whose nickname was Catfish, became the sport’s first free agent when he won his arbitration case against the Oakland Athletics owner, Charles Finley. In that case, Hunter claimed Finley had breached his contract by failing to pay $50,000, half of Hunter’s salary, into an annuity fund. Seitz, the neutral arbitrator in this case, ruled with Hunter, who went on to sign the first multimillion-dollar deal in baseball history, a five-year contract with the New York Yankees worth $3.25 million.
“I regard that as the seminal case,” said Donald Fehr, who assisted on the Messersmith-McNally case as a young lawyer and later served as the executive director for both the MLB and NHL players unions. “After Hunter, all players understood the magnitude of the restraints.”
Still, baseball players feared for their careers. Hunter was one of the best pitchers in the game; of course, he wasn’t going to be blackballed. But what about everyone else?
Messersmith was the first to wade into uncharted territory. After the Los Angeles Dodgers refused to include a no-trade clause in his 1975 contract, he refused to sign and instead played under a renewed contract. The union filed a grievance.
Miller then approached McNally, who was playing for the Montreal Expos without a contract and had sat out a good chunk of the season with a sore arm, to join the grievance. McNally knew he was going to retire, but he wanted to make things better for the younger players.
Despite pressure from their owners and significant sums being offered to both players, McNally and Messersmith moved forward with the grievance. And after presenting their cases, the players won. In December 1975, Seitz ruled the two players were bound to their teams for only one year, not perpetuity.
The reaction from the league was visceral. Seitz was fired from the arbitrator panel. Kuhn said the decision was a disaster for “the great majority of the players, for the clubs and most of all for the fans.”
Seitz’s decision was upheld in federal district and appeals courts, the latter of which occurred during a lockout in spring 1976. McNally and Messersmith were free agents, but what about everyone else?
In March, Kuhn called off the lockout, not wanting to miss any regular-season games. The players agreed to start the season without a new agreement in place. Team owners knew the reserve clause system was over. The question was: How would free agency work?
The owners first proposed a 10-year wait for free agency, which the union shot down, seeing little difference between that and the lifetime bind of the reserve clause. Finley, the A’s owner, wanted free agency every year, which would have flooded the market every winter and thus depressed player salaries, but it did not gain much traction.
Miller and union leadership were OK with setting a higher bar for free agency. They figured that by allowing only a few players to become free agents every year, scarcity would create bidding among teams and drive up salaries. They were right.
“We were scared to death they were going to listen to Finley because he had it right,” Garner said. He added: “We agreed to six-year free agency, with the caveat that we had arbitration.”
They reached an agreement on the eve of the All-Star Game in July, and it was ratified by the players in August. Some of the first free agents that winter included future Hall of Famers such as Reggie Jackson and Rollie Fingers. In total, 25 free agents made $25 million that first year, led by Jackson’s $2.9 million salary for the eventual World Series-champion Yankees.
Despite Kuhn’s sentiment that the game would suffer, fans came out in record numbers in 1977. MLB set a season attendance record (38.7 million), and as fans watched the Yankees and their high-priced stars win it all, they seemed excited by the possibility that their team was one or two free agents away from greatness.
For players, the impact on salaries was immediate, and it wasn’t just one or two stars.
“It was like turning on a fire hose and trying to drink from it,” said Steve Rogers, who negotiated a three-year, $240,000 deal with Montreal heading into 1977. A year later, players similar to him were signing deals worth $1 million. Gene Tenace, a catcher and first baseman who was part of the first free-agent group, saw his yearly salary go from roughly $50,000 to a six-year, seven-figure pact.
Some of those involved 50 years ago marvel at where free-agent salaries have gone. Pace Flood said her husband would have been proud. Others aren’t so sure.
“The whole climate then was the players are screwing up, they’re making a big mistake, you can’t demand more money, they are paid a lot of money,” Garner said. “We weren’t demanding more money. We demanded a different system. And now what the owners need is a system to protect themselves, and they don’t have it.”
Whatever happens during negotiations over the next year could reshape the sport forever.