How MLB Became the Example of Peacemakers

These are crazy times, folks…. Crazy times. A social networking idea is now worth $50 billion, gas prices could hit $5 a gallon by 2012, and MLB is the poster child for labor peace.

That’s right, the folks that brought you the 1994-95 work stoppage – the one that very nearly killed baseball – is now what other leagues should aspire to. Next thing you know, Sarah Palin and Ralph Nader will be running together on the next presidential ticket.

Here’s what we’ve come to: The National Football League, who pulled in revenues of $9.3 billion last year, and just saw Super Bowl XLV become the most watched television event in U.S. history with a staggering audience of 162.9 million viewers is about the lockout the players on March 4 the day after their current CBA expires. Their contention? Players got a better deal than they should have when the late Gene Upshaw was at the helm of the players and Paul Taglibue was headed out the door as commissioner of the NFL. Now, owners like Jerry Jones of the Cowboys, Robert Kraft of the Patriots, and Jerry Richardson of the Panthers want concessions from the players – $1 billion’s worth, due to what they are saying is “cash flow problems”. The NFLPA has asked for the league to open their books, to which the league has said, ”That’s none of your business.”

And, the NFL isn’t the only league on the verge of a lockout. The NBA’s current CBA expires on June 30, and like the NFL, the possibility of a work stoppage is real. The difference between the NFL and the NBA is the NBA is citing losses, and have released audited financial information to the NBPA in which they are showing the league in aggregate is losing money. Forbes has reported that 17 of the league’s 30 clubs ran at an operating loss last year.

The NBA’s situation is bleak, but at least the sides (owners and players) have been at this before. David Stern and Billy Hunter have been through labor battles, and have a cadence of sorts.

For the NFL, it’s all too reminiscent of Major League Baseball’s ugly past.

“I think a majority of owners, including me, would probably like to have even stronger cost-containment than we’re talking about right now.”

The quote above wasn’t from Jerry Richardson, NFL Commissioner Roger Goodell, or Jerry Jones. It was former Texas Rangers owner Tom Hicks in 2002 shortly before Major League Baseball and the MLB Players Association reached a 4-year labor agreement – the first time MLB had reached a CBA without a work stoppage since the union for the players had gained power through former Exec. Director Marvin Miller in the 1960s.

You see, Hicks said this statement in a press conference he called in San Diego… on his yacht. It was also after Hicks had given Alex Rodriguez a record $252 million, 10-year contract.

The point is, rhetoric doesn’t reach labor deals. MLB and the MLBPA figured this out nearly a decade ago. The NFL and NFLPA need to adhere to what Spanish American philosopher George Santayana said in 1905: “Those who cannot remember the past are condemned to repeat it.”

In several interviews that I’ve done with Rob Manfred, the longtime labor exec for MLB, and most recently Michael Wiener the Exec. Dir. of the MLBPA who took over for Donald Fehr in late 2009, one theme has surfaced: partnership. Talk to the NFLPA and ask them if they feel they’re partners with the NFL, and they nearly spit in disgust, “Hell, no!”

Yes, MLB and the MLBPA don’t see eye-to-eye on everything. “Any deal has to make sense,” both sides have said. But, the players and the owners saw in 2002 what the NFL, and to a lesser extent the NBA, have not grasped: in these crazy times, people’s patience when it comes to players making millions and owners worth billions, only goes so far. Baseball figured out you don’t kill the golden goose. You know, as an owner, that the topic of a salary cap is a non-starter. Likewise, you don’t talk about adding 2 extra Wild Card teams and extending the playoffs without having the players sign on the line – collectively bargain it. Roger Goodell and the NFL’s owners don’t get this.

For the NBA, I’m willing to cut them some slack. There’s evidence they’re losing money. The cost of doing business has gone up. Revenues have grown, but only marginally – about 1% each year for the past 3 years. For the NFL, they saw revenues grown 9% last year alone. It’s hard to buy what they’re selling.

For those that are watching, it comes back to that crazy world… “Wait a minute. The league that has no salary cap is in better shape than the two that have them? What?” As one top executive from a league other than MLB told me this week, “The complexities of a capped systems can lend themselves to such conflicts as we are seeing. There’s more moving parts.”

For those that are wondering whether baseball will be the beneficiary of labor strife, the answer is, only for a while and even then, it won’t be much. Ask yourself, as you look at the massive attendance growth in MLB since the 1994-95 lockout if every fan that swore he wouldn’t come back to baseball ever, kept that promise.

For those that are wondering how MLB stacks up to the NFL and NBA in terms of revenues, here’s numbers from league sources that paint the picture:

NBA

  • 2009-10 – $4.4 billion
  • 2008-09 – $4.3 billion
  • 2007-08 – $4.2 billion

MLB

  • 2010 – $7 billion
  • 2009 – $6.6 billion
  • 2008 – $6.3 billion

NFL

  • 2009-$9.3 billion
  • 2008 – $8.5 billion
  • 2007 – $8 billion

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Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, as well as a contributor to FanGraphs and Forbes SportsMoney. He is available for freelance and looks forward to your comments.

37 Responses to “How MLB Became the Example of Peacemakers”

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  1. B N says:

    I agree whole-heartedly.

    Moreover, I am really confused by how the NFL owners expect to ever pull off a deal, given the attitude they’re having. From what I can tell, they’re saying the following:

    1. We want to give the players less of a share in the profits.
    2. We want to play 2 more regular season games.
    3. The extra total profits from the extra games will keep the lump sum of money to the players the same.
    4. We’re somehow losing money, even though the NFL makes more money each year.
    5. No, we won’t show you how we’re losing money. That would be inappropriate.

    So basically, as near as I can tell, they’re asking the players two play two extra regular season games for nothing. No additional pay, 12% more season. How they possibly think they can pull this off is beyond me. I mean… doesn’t bargaining generally consist of give and take? I’ve seen absolutely nothing that benefits the NFL players even mentioned.

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    • CMC_Stags says:

      This is why there won’t be a 2011-2012 NFL season.

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      • hunterfan says:

        I agree. It is a shame that is the case, but hopefully the players are able to band together and by striking, ensure fairer and safer working conditions…they will take a hit now, but hopefully in the future players will benefit from their present sacrifice.

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    • hunterfan says:

      Not only that, but I’m also turned off more and more by the information that’s coming out about concussions and potentially how the league has tried to cover it. up. “What did they know, and when did they know it?”

      When I look at Justin Morneau, who has been out of the sport for 6-9 months due to a concussion, and then I look at the NFL where players MAY get off a week or two (and probably feel like they can’t take any time off at all due to non guaranteed contracts) it makes me feel rather like a Roman cheering at a gladatorial contest.

      Now that I know the NFL players are putting their future mental capacity and ability at risk each time they go out on the field (not to mention their physical well-being) I am appalled at the owner’s apparent inflexibility toward the players.

      I used to be a bigger fan of the NFL than the MLB, but no more.

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      • CircleChange11 says:

        The part that confuses me is that players are giving each other concussions, namely by leading with the helmet.

        Helmets have been improved over the years, and as a result, players no longer get their heads out of the way to tackle. Where the used to lead with the shoulder, now they put their forehead right in a guys chin or side of his head.

        It’s sort of a weird phenomenon. Sorta like how they try to make cars safer, and the result is people drive while paying less attention.

        If football were played without helmets, how much head to head contact would their be? Probably the same as in the “leatherhead days” … not much.

        Don;t get me wrong, I don;t think the league is as concerned about concussions as they should be, but I don;t think the union is either. Half of the union (the defense) wants to kep delivering huge hits involving the helmet, because it leads to them getting more atention/money. The other half (the offense) doesn’t because they’re concerned with missing games, decreasing career length, etc. It’s pretty much one half delivering the concussions and the other half receiving them. I’m a pro-defense guy buy nature (rgardless of sport), but if the only way you can deliver a big hit is by ramming someone in the side of the head or chin with your own helmet, then there’s some tackling skill lacking.

        This is all a side issue, with the primary issue being that the owners want more money and don’t want to share it. A work stoppage, at the height of the NFL’s popularity could lead to less overall money for both sides.

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      • NBarnes says:

        This, this, a thousand times this.

        The NFL is, IMHO, borderline immoral. The combination of short careers, non-guaranteed contracts, and major head injuries leave the NFL in a position where they quite literally chew up and spit out young men every year. And now the NFL’s owners want to pay those young men even less, without opening their own books to verify that they are losing money.

        If I owned an NFL team, I would sell it out of disgust and shame.

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      • CircleChange11 says:

        If I owned an NFL team, I would sell it out of disgust and shame.

        No doubt. But the Fangraphs Community is immune to things like greed, arrogance, selfishness, etc.

        We cannot expect everyone to be like us. That’s asking too much.

        If I was a billionaire, I’d just give away all of my money just to protest all of the greed in the world. *wink*

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      • B N says:

        “If I was a billionaire, I’d just give away all of my money just to protest all of the greed in the world. *wink*”

        Ironically, that is somewhat along the lines of what Warren Buffet is doing… except instead of protest, it’s to the Gates Foundation to improve global quality of life. While he’s kept around enough to invest and live comfortably, he’s given up literally billions, and doesn’t plan to give much inheritance to his children.

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    • MikeS says:

      That about sums it up. When they say they are losing money, the average fan thinks they are lying. When they refuse to open the books, the average fan takes it as evidence. From the outside looking in, it looks like the owners are tired of having all the golden eggs they can eat, they want goose for dinner and to hell with the consequences.

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  2. Maury Brown says:

    My odds:

    NFL Lockout – 95% chance of happening. Training camps lost. 1-2 preseason games. Regular season stays in tact.

    NBA Lockout – 45% chance of happening. Summer League possibly hit. No games lost.

    Big difference…. NBA really losing money.

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    • DonCoburleone says:

      Wow only 45% chance for the NBA? I’m here in LA (where the local sports talk shows talk about 4 things: Lakers, Lakers, Lakers, and potential NBA Lockout) and what I’m hearing is that the NBA Lockout is all but a guarantee at this point, and the possibility to lose regular season games is about 50/50…

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  3. gonfalon says:

    I haven’t followed the details of the NFL (or NBA) labor talks at all, but weren’t owners trying to remove 1 or 2 preseason games from the schedule as (partial) compensation to the players for 2 more regular season games?

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    • ofMontreal says:

      Yes, but it isn’t nearly as simple as that. The commish says fans don’t like the preseason, so 2 more regular season. But the most important roster decisions happen around those last 2 games and the Players will want serious roster expansion to cover for wear & tear.

      The way I see, the owners have to be bs-ing. Otherwise they wouldn’t have fabricated such outrageous positions from which to negotiate. They feel comfortable enough to ask for the moon. And also, isn’t it funny that the owners that are complaining the loudest are the ones who built themselves stadiums. So as to corner every possible cent spent around their product. Greed is always easy to spot.

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  4. DonCoburleone says:

    A couple of differences you didn’t mention in this article: One is the fact that the NFLPA had their back broken by the owners in the 1987 player strike when players crossed the picket line & lost all their leverage. In terms of union strength, the NFLPA is Stewie Griffin and the MLBPA is Hercules… And second is the fact that right now, the NFL is about as popular in this country as baseball was in the 50′s. Outside pressure to get a new NFL deal done will be much much greater than it was for MLB in 2003 or 1994.

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  5. SOB in TO says:

    “on his yacht.”

    Nominated for “Best Unintentional Irony of Decade.”

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  6. J-Doug says:

    Great article, but I see one major difference. After the Supremes ruled on Flood, the MLBPA had the upper hand and they used it. Thereafter, Marvin Miller declared war on the owners and, more or less, won.

    The NFLPA is still weaker than the MLBPA has been at any time since before the Flood case. We can tell because the last resort is decertification, essentially a “scorched earth” policy that unions employ when they have no remaining options. What’s more, NFL players don’t yet seem to realize this is a war. We can tell because they put fellow players in charge of the negotiations, not skilled warriors om par with Miller.

    We will never have peace until A) the NFLPA realizes this is a war and forces the owners to settle a peace along the lines that Selig settled in 1994-5, or B) the NFL simply crushes the union outright.

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  7. Sandy Kazmir says:

    NFL is for dumb animals and wannabe gamblers.

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  8. Hank says:

    The owners are in a powerful position – fans route for the helmet or jersey, and for the most part players are interchangeable in the fans eyes. Other than the QB, maybe a RB or WR and maybe 1 or 2 guys on defense, the other starters (and the backups) are faceless entities to the average fan

    The player career span is much shorter so player turnover is huge which also makes it harder to sit out a season (or partial season) and fight “a war”.

    The players only get paid during the reg season, and the owners know when the reg season draws near and players not named Manning and making 10-15mil realize they are going to miss a check and they will likely crumble again…. if your career is 4 years, are you willing to sit out half a season and give up maybe 1/8th of your career earnings?

    I think if the owners choose to take a hard line and take this close to the reg season start (or even a few games into the season), the union crumbles, the owners get virtually every demand and there will be near zero impact on the popularity and overall revenue. The only question is do the owners fear some unintended consequences (like government getting involved) if they utterly crush the union.

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  9. Maury Brown says:

    On the commentary about the MLBPA’s power compared to other PA’s… True. But, DeMaurice Smith is different. Very much reminds me of Marvin Miller, and they talk often. The NFL players are extremely unified right now.

    The difference maker is the NFL’s $900M war chest coupled with the fact that there are provisions within each of the agreements with CBS, NBC, ESPN, FOX, and DirecTv that allow the NFL to be paid rights fees even if games are lost due to a lockout — $4.3B each year. They have to rebate back with interest, minus DTV where the NFL doesn’t have to pay back the $1B.

    In other words, owners have opportunity and can beat the players in a battle of attrition. See the Forbes and Variety links for further details

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    • joe says:

      It’s easier to be unified when the players won’t be missing any paychecks until Sept rolls around.

      The NFL players have very little to lose right now by waiting and remaining unified (other than maybe free agents) – come September the backups / low salary starters / special teams players will be looking for a paycheck and quite frankly those guys won’t be getting impacted by the % of revenue going to the players (assuming the league minimums aren’t impacted significantly) and know they likely only have 3-4 years of earning potential.

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  10. Bascinator says:

    Why is MLB better off without a salary cap? Fans of small market teams like myself would like to know. Does anyone have any good links that SUPPORTS baseball’s current economic system? I don’t see how a system that allows teams in cities like Tampa, Miami, Cleveland, and Milwaukee to play for a championship every few years is a better system than one that allows teams in Salt Lake City, San Antonio, and Detroit to compete for titles every year.

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    • NBarnes says:

      What salary cap do you propose that would fix this problem? Any non-crazy salary cap would be one that Tampa, Miami, and Cleveland are still below. These are teams that pretty much take revenue sharing, which MLB already has, and put it in their owner’s pocket, rather than spending it on players. I’m sure the owners would love a salary cap, but they are bad for competitive balance and unfair to the players to boot.

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      • jay stokes says:

        How about MLB and MLBPA have binding arbitration over what % of baseball revenue goes to franchises and what % goes to players. You can have high or low, but settle that. Than of the % that goes to players, that is spread evenly over the franchises, with revenue sharing to fill in the gaps. You have clawbacks, etc to ensure that the money is spent on salaries (can defer if they don’t want to spend it all in one year, but cannot defer too long).

        That kind of salary cap/revenue sharing.

        All this “labor peace in MLB” stuff makes me a bit ill. NFL owners seem to be greedy, arrogant and heartless and their position in this strike is laughable. But the spending disparities in MLB are a slow aphyxiation of the sport. Major markets, where the money is, love it, but in smaller markets fans notice, “Gee, it sure would be nice to be able to spend every year to fill in your holes from your farm talent.” So they tune out. So you lose the periphery first but once that engagement is lost, it is really hard to get it back. NFL for its flaws at least has competitive equality down. Yes, some franchises suck, but that is their own doing and people understand that.

        In baseballs, where spending to market size is about .90 correlation, basically get champions from the top 10 markets, which gets old. Look at the last two Superbowls: Indy vs. New Orleans and Green Bay vs. Pitt? Twins vs. Padres one year followed by Royals vs. Brewers the next. Won’t hold my breath.

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      • hunterfan says:

        @Jay

        Last 2 World Series contenders:

        2008: Philadelphia vs. Tampa Bay
        2009: Philadelphia vs. Yankees
        2010: SF vs. Rangers

        I see 2 big market teams, 2 small market teams, and 1 mid market. Seems to me the system isn’t broken….how can you say that?

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  11. Daniel says:

    Why to not have a lockout:

    See the NHL. Granted, I love what they did after the agreement, but there’s no denying that despite all the great gimmicks they’ve come up with (The Winter Classic and All-Star Draft come to mind) they still aren’t where they were pre-lockout.

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    • Danny says:

      Not quite true.

      NHL revenue was $2.25 billion in 03/04 (before the lockout). After the lost season the numbers are as follows:

      05/06: $2.28 billion
      06/07: $2.43 billion
      07:08: $2.56 billion

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  12. Short says:

    The NFL owners today sound a lot like MLB’s owners in ’94. They want to crush the players and increase their take.

    NFL’s players should refuse to play until they get some kind of contract guarantees, or at least guaranteed buyouts if they are cut (25%? 33%?). Their careers are short and the NFL’s profits are taken out of their hides, for all intents and purposes.

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    • B N says:

      That would be a great bargaining option: “We’ll take a 1 billion pay cut, plus play 2 more games, if you make all our contracts guaranteed.” Sounds fair to me…

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  13. TK says:

    “strike” not “lockout” in 94-95

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    • lex logan says:

      Odd, I clearly remembered it as a lockout, with the players willing to continue under the status quo and the owners insisting on change. But Wikipedia, at least, says the players called a strike in August (1994). Still, would that have happened if the owners were not insisting on radical changes such as abolishing free agency? I don’t recall any drastic changes being advocated by MLBPA.

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  14. Bascinator says:

    @NBarnes: I realize that a salary cap similar to the NBA model would not work in MLB, since the big market teams would still use their money in the draft and in international free agent market. A fair salary cap would be complicated, yes. But interest in small market cities has dwindled to the point that players won’t even consider going to a place like Tampa Bay, Florida, KC, Cleveland, Toronto, or Pittsburgh. And in many cases, those teams are operating in the red. Tampa was making profits until the team was good enough to contend in 08. Cleveland maxed out its budget in 2009, which is why they traded Lee and Martinez a year before their free agency; their owner was losing tons of money. The current system right now unfairly penalizes teams like Cleveland for one bad free agent signing (Hafner) that large market teams like the Angels with Gary Mathews Jr. have been able to absorb.

    @HunterFan: Do you think the Rays have a shot at a title this year? I don’t see how this system allows the Rays, Orioles, and Bluejays can compete with the Yankees and Red Sox EVERY YEAR. The current system allows the big market teams to compete for a championship every year, and allows the mid market teams and small market teams to compete for a limited window of opportunity. The Yankees haven’t had a losing season since 1992, and the Pirates haven’t had a winning season since 1992. I doubt that would be the case with true competitive balance.

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  15. Rufus Manier says:

    Awesome,I admire Miami! They are the best team in basketball! We will never see another 3 headed monsterteam like this again! Go Bosh!

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