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The Reserve Clause, Public Funding, and Social Cohesion

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The following is a long discussion between myself and Ted McClelland, spurred by his Slate article on baseball player salaries and social cohesion. Mr. McClelland graciously offered to conduct an e-mail debate on the question, and to allow me to post the results of this debate on the blog. My initial questions are in bold; his responses and counter-questions are italicized.

1. Can you establish a link between public financing of stadiums and the end of the reserve clause in baseball?

The era of publicly stadiums didn’t begin with free agency, but free agency made those stadiums more common, more expensive and more elaborate.

“Since the 1970s, changes in professional sports have led to an increase in publicly funded stadiums. Growing costs in the form of player free agency and changes in the tax code left team owners looking for ways to increase revenues in order to maintain their returns on their investments in professional sports team franchises. One of the most effective ways to increase revenues is to invest in a grand new stadium with luxury boxes and elaborate concessions.” — “Public Funding of Sports Stadiums,” Sarah Wilhelm, Ph.D., Center For Public Policy & Administration, University of Utah

By 1988, 80 percent of professional sports stadiums were publicly funded. I find public financing so obnoxious because it increases inequality by transferring wealth from the masses, with their stagnant incomes, to players and owners. If you pay taxes, you pay baseball salaries, whether you buy a ticket or not. As Dr. Wilhelm points out, as salaries increase, so do baseball’s demands on the public purse. Marlins Stadium will cost Miami-Dade County $2.4 billion by the time all the bonds are paid off. (Comerica Park, where Verlander pitches, was 38 percent publicly funded, with a tax on rental cars, hotels, and revenue from Indian casinos. I’m sure $115 million could have gone a long way toward rebuilding Detroit, but stars need a stage.)

Dennis Coates, a professor at the University of Maryland, Baltimore County, found that pro sports actually reduce a city’s per capita income, by withdrawing entertainment dollars from local businesses and transferring it to athletes and owners who don’t live in the area, and don’t spend much of their enormous salaries and profits: “money paid to players does not circulate as widely or abundantly as it would were it paid to people with less wealth and more attachment to the city.” So the public is helping to pay the salaries of people who don’t return it to the local economy — a double fleecing.

As a Chicagoan, I’m happy that Mayor Emanuel told the Cubs to pay for their $500 million renovation of Wrigley Field themselves.

I happily agree with Mr. McClelland’s contempt for public funding of sports arenas.  The question here concerns the causal link between player salaries and public funding.  Mr. McClelland cites a 2008 CPPA study as authoritative in this regard, although the above quote is the only mention of free agency in the study, which focuses rather on the effects of franchise mobility on public funding, and on whether public funding of stadiums ever results in economic benefits.  The Wilhelm study, in turn, cites a 1998 Public Affairs paper by Mark Bernstein , which mentions free agency as one of several motivations (along with changes in tax law) for owners to seek public funding.  Notably, Mr. Bernstein and Dr. Wilhelm focus on franchise mobility, rather than free agency, as the most important cause for owners’ success in pursuing public funding.  In a long section on possible solutions to the problem, Mr. Bernstein suggests legislative remedies that would restrict franchise mobility, and that would reduce the legal authority of municipalities to pay for public stadiums, as potential solutions to the problem, but does not suggest eliminating free agency or recreating the reserve clause.

Moreover, actual empirical studies suggest that the connection between public financing and free agency is quite murky.  As this study suggests , public funding for stadiums exceeded private funding by the early 1960s, well before the end of the reserve clause and the advent of free agency. Additionally, the National Football League, with a more restrictive free agency regime, has managed to acquire a larger percentage of public money than Major League Baseball. The public-private distribution since 1975 is not linear, with public funding taking up a huge chunk of the (relatively small) stadium budget in the ten years after the fall of the reserve clause, a much smaller percentage of the (much larger) construction budget in the 1990s, and a very small percentage of the construction budget in the past five years.

I detail this a bit more in my response below, but bottom line it is very difficult to find a clear link between player salaries and the construction of publicly financed stadiums.  Major North American sports have become wildly more profitable since the 1970s, for a variety of reasons, most of which have little to do with public financing. Owners seek additional revenue, regardless of how much they’re paying their employees, but the rules of bargaining help determine how the much larger pie is distributed between players and owners.

If Mr. McClelland wants to declare that free agency causes public financing, that’s fine; if he wants to convince anyone, he needs to show it in some fashion. This means accounting for the facts that public financing preceded free agency, that public financing has increased across sports despite alternative free agency structures, and that the mix of public-private financing has varied considerably even within the free agency era.

2. Can you explain why creating rules that disadvantage labor in salary negotiations with management nevertheless improve the position of labor in society?

First of all, I think it’s a mistake to think of baseball players as “labor” in the same sense as, say, autoworkers. Even though they perform a physical task, and are members of a union, their compensation packages resemble those of highly-paid executives more than hourly workers. They are at-will employees who can be fired as soon as their skills decline. They don’t receive salary increases according to seniority, but according to performance. And they don’t labor for hourly wages, but are covered by guaranteed contracts. Like CEOs with golden parachutes, they are often paid millions after they’re let go. Only the lowest-paid workers have their wages set by a collective bargaining agreement. Most baseball players bargain individually with teams, through talent agents. The end of the reserve clause did nothing to help the labor movement, because baseball players aren’t part of the labor movement. They’re specialized entertainers who have benefited from a trend toward higher wages for skilled workers. In 2008, the Boston Herald asked members of the Red Sox how they were voting in the upcoming election. Only one, Gabe Kapler, was a Democrat. You won’t find attitudes like that in a union shop.

 

I would expect that anyone paid to write about American sports (and American labor) would take the trouble to learn something about his subject.  The members of the MLBPA are not, it is true, exactly like auto-workers, but then there are *many* unionized professions that are also not exactly like auto-workers. I’ll assume that the “physical task” comment means… well, frankly I have no idea what it means.

Baseball players are not “at will” employees, and they cannot be “fired as soon as their skills decline.” One would think that Mr. McClelland would have taken note of the contradiction between “at will employees,” “covered be guaranteed contracts,” and “often paid millions after they’re let go,” but it can be very difficult for to remember what you wrote just a sentence ago.

Like many unionized workers, baseball players increase in salary through a combination of performance and seniority. Mike Trout, the best player in baseball last year, will make $510000 this year, while Vernon Wells will earn $21 million. This is because, of course, Wells has more seniority than Trout, and was able to negotiate a guaranteed contract at the height of his skills that also covered what his decline years.

Baseball players (at whatever level of seniority) enjoy significant employment protections won by the MLBPA.  These include union protection from unreasonable termination, arbitration of workplace related disputes, input into the requirements of employment (number of games, for example), a pension plan, and input into the basic structure of the league. These are exactly the sort of concessions that collective bargaining is supposed to win, and are precisely the policies that most unions pursue.

Baseball’s minimum wage has increased from $16000 in 1975 to $480000 in 2012; roughly 7 times as high in inflation adjusted terms. Baseball’s average salary has risen more quickly, but this should serve as explanation that the beneficiaries of the end of the reserve clause aren’t simply the most wealthy, most skilled players, but also those playing for the league minimum. Unfortunately, the MLBPA does not provide any extensive protection for minor league baseball players, who do not enjoy the same rights as major leaguers.  Arguably, however, minor league baseball players are still far better off than their counterparts in NCAA football and basketball, who effectively play for free.

And yes, baseball players are specialized entertainers, who have created a labor union in order to protect their interests and maximize their share of revenue in the industry in which they work. In this they are no different from any other group of works which seeks to band together in order to bargain collectively and protect its interests.

3. Can you explain how Mike Ilitch receiving my ticket money, rather than Justin Verlander, improves social cohesion in the United States?


You are making an assumption, which I don’t share, that the pie would be the exact same size if players’ salaries hadn’t increased twenty-fold, and owners would have claimed all the spoils. There are forms of revenue that didn’t exist in Hank Aaron’s day, such as cable television, that have contributed to players’ rising salaries. But as Dr. Wilhelm pointed out, there are other forms of revenue that have been necessitated by rising salaries, such as luxury boxes in big, publicly funded stadiums. The point is, players earning less money does not necessarily mean owners keeping more. High salaries are “laid off” on the public.

This largely recapitulates the answer to question number one; to believe that player salaries are being paid by the public, you need to establish a causal link between free agency and public funding. To be clear, I’m stunned to learn that anyone thinks that, in the absence of being forced to pay high salaries, Major League Baseball owners would forego pursuit of additional revenues.  Owners (and universities) build luxury suites not because they have to pay exorbitant player salaries, but rather because they want to maximize revenue and franchise value. The Oregon Ducks do not pay their players exorbitant salaries, or really any salaries at all; nevertheless, Autzen Stadium added 32 luxury boxes in 2002.  The Yum Center, home of the 2013 NCAA Champion Louisville Cardinals, houses 75 luxury suites. Fans of the Nebraska Cornhuskers, another team which does not suffer the embarrassment of having to pay its players anything at all, can enjoy 101 luxury suites catering to various levels of civic and business achievement.

Major League Baseball owners would pursue public funds for the construction of luxury boxes even if the reserve clause still allowed them to effectively enslave their players. I know this because a) MLB owners sought public funds before the reserve clause ended, b) MLB owners denied public funds nevertheless build stadiums with luxury boxes, in order to maximize revenue, c) owners of sports franchises with alternative (and far more owner-favorable) structures of free agency also pursue public funds for the construction of stadiums, and d) operators of sports franchises that do not pay their players at all also pursue public funds for the construction of stadiums.

The owners don’t need public money, but they sure want it, and they’ll make every effort to coerce municipalities into coughing up the cash, regardless of how much they’re spending in player salaries.  The real tragedy of public funding has nothing to do with Justin Verlander’s salary, the payment of which, given the current prospects of the Detroit Tigers, may be an entirely sensible investment. The tragedy, rather, is that the Tigers (and the Yankees, and all of the other teams that receive public funding for stadiums) almost certainly would have raised private money to build those arenas, because it is economically rational for them to do so. The New York Jets, New York Giants, New York Yankees, Dallas Cowboys, and San Francisco Giants all invested heavily in their arenas, and all continue to invest heavily in player salaries. It’s almost as if owners would, if required to, build extremely lucrative stadiums and pay for good players.

I suppose I can’t complain about a baseball player earning all the money he can in a free market. But Major League Baseball does not operate as a free marketplace. It’s a legal monopoly. Baseball’s anti-trust exemption limits the number of teams that can compete. Suppose that were overturned, and anyone were free to field a major league baseball team. The fan base would be diluted, and profits would drop. At the same time, the number of roster spots would expand, driving down wages.

I can only say that it is exceedingly surprising to see a sports writer make this argument, given that the NFL and NBA (neither of which enjoy anti-trust exemptions) nevertheless maintain a league structure quite similar to that of Major League Baseball.  The anti-trust exemption has little to do with MLB’s ability to prevent me from fielding my own baseball team, or even founding my own league; rather, the extremely sketchy business prospects of such an endeavor (likely to lead to a fate not dissimilar from that of the USFL), deters myself and others from such an investment. To be sure, the anti-trust exemption has an effect on the ability of the national sports leagues to compete; both the NFL and the NBA faced dangerous competition from rivals in the 1960s and 1970s, whereas MLB has managed to squelch such competition pre-emptively.  But given the rough symmetry in size between the four major North American sports, it’s obviously not the case that entrepreneurs can simply create new teams, “dilute” the fan base, and cause profits to drop.

Similarly, it’s hardly obvious that an expansion of the number of roster spots would drive down wages; historically, the creation of competing leagues has driven wages up, as was the case with the USFL, the WHA, and with the Federal League. The increase in roster spots increases demand for athletic talent, which is good for players. The creation of additional franchises does result in some dilution of the fan base, but it also increases the size of the pie, as these new franchises operate in heretofore underserved areas.

Since we eliminated the reserve clause, a free market check that suppressed players’ salaries, it’s only fair that we also eliminate the anti-trust exemption and public funding for stadiums — marketplace interferences that boost salaries. Would I resent Justin Verlander less if he earned his money on the free market, without any help from the Detroiters he so vastly out-earns? Maybe. But if he did, he sure wouldn’t be making $27.5 million a year.

The reserve clause was not, in any sense of the term, a “free market check,” although it was indeed a tool designed to suppress player salaries. I’m rather flummoxed at the notion that a rule precluding an employee from shopping his services to a variety of different employers within the industry could be conceived of as a “free market check.” I do hope that Mr. McClelland can further illuminate me with regards to this claim.

Moreover, I daresay that eliminating the anti-trust exemption would benefit the MLBPA immensely, which is why MLBPA litigation has consistently challenged the exemption. See this analysis on the effects of eliminating the exemption; short answer is that player bargaining power would increase, although the biggest changes would happen at the minor league level.

Now you will answer these three questions:
1. Explain how the elimination of baseball’s reserve clause benefited the American labor movement.

Unions represent their members; while we would hope that the victories of a particular union would benefit American labor as a whole, it’s often difficult to draw direct causal lines between the achievements of one union and the success of the broader movement.  However, given that the MLBPA has been one of the most successful unions in America since 1975, I think its history and experiences can be quite relevant for thinking about the general history of American labor during that period. For example, like many unions the MLBPA is blamed by the public for labor disruption, even when that disruption is brought about by the activities of ownership.  Like many unions (teachers, public employees) the MLBPA is demonized by journalists who are essentially ignorant of the economics of the industries in question. Like many unions, the MLBPA faces difficulties mobilizing its own membership, although it’s worth pointing out that the MLBPA has done a much better job than its counterparts in football and basketball.

2. How do you justify using public funds to pay for stadiums that contribute to the salaries of athletes and the profits of owners?

I don’t; I strongly oppose public funding of sports arenas.

3. Over the past 30 years, the Top 0.1 percent of American earners (those earning over $1.7 million a year) have tripled their share of the national income, from 3 percent to 10 percent. Do you consider this trend desirable, or even morally justifiable?

I consider it neither desirable nor morally justifiable.

I also like cheese; this fact has as much relevance for the debate over baseball player salaries as the answers to the above two questions. Final point; I agree to conduct this debate without resort to ad hominem attacks against Mr. McClelland, and I do thank him for taking the time to respond to my queries.

 

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  • Scott Lemieux

    The idea that the plutocrats who run professional sports teams would have no interest in extorting taxpayers or having lucrative luxury boxes if they didn’t have to play players fair value is so precious. His mother must not be looking forward to the imminent conversation about the Easter Bunny.

    • c u n d gulag

      And his dad’s sick of wearing that Santa suit every Christmas, so he might be in for more shocks than he can take.

    • actually, of course, only in baseball and soccer do they have to pay fair value: salary caps exist precisely to protect owners from paying fair value.

      • FMguru

        Even Bill Simmons, who is quite terrible on sports labor issues, fully admits that if LeBron James was fairly compensated for the value he crates for the Heat and the NBA, his salary would be something close to $100 million.

        And then there’s the NCAA, where salaries are capped at $0 – and yet, mysteriously, tickets to see games aren’t free and the concessions aren’t sold at cost. Huh.

        • ChrisS

          Money generated from NCAA sports (football & men’s basketball, primarily) goes to support the other atheltic programs at the colleges like women’s volleyball and track & field and not to overpaid coaching staffs, athletic directors, media coordinators, NCAA administrators, and various other hangers-ons.

          Ahem.

    • Incontinentia Buttocks

      And the actual history of public-financed stadiums–which began decades before the elimination of the reserve clause–proves this.

    • djw

      Particularly when he implies, with his third question, that his analysis is an exercise in being tough-minded and serious about the problem of growing economic inequality.

    • mpowell

      I’m glad Farley didn’t have to promise that none of his commenters would resort to ad hominems, because it’s basically impossible to avoid the conclusion that Ted McClelland is a moron. Seriously. What remotely plausible casual mechanism does he propose whereby owners (acknowledged members of the rentier super-elite) will stop pursuing public subsidies because they don’t have to pay their players as much?

      Anyways, he is right to the extent that those public subsidies do end up pushing up player salaries. He’s just wrong about whether the causality could ever flow the other direction. I would like to believe that someone like McClelland could be a useful voice in the battle against ridiculous public subsidies for sports teams. But I am highly doubtful of this if his first approach to the issue is to blame the loss of the reserve clause. At best he sounds like a useful (to the owners) idiot and at worst I question his real motives.

      • MTrost

        “What remotely plausible casual mechanism does he propose”

        I like that! I guess you didn’t do it on purpose, but really, “casual” is so much more appropriate in this case than “causal”.

  • his argument doesn’t get any better in the long form.

  • I’m going to acknowledge that, as of now, I’ve stopped reading at the “don’t get salary increases based on seniority” bit because, ya know, arbitration and all that.

    The sense I’m getting from McLelland is that he ultimately knows absolutely nothing about the economics of the baseball business (which means he’ll probably be writing about baseball and cable television next week), but REALLY resents that baseball players make more money than him, so fuck those assholes for being good at something.

    • Incontinentia Buttocks

      Though it would still fall short of an actual argument, I’d mind his resentment toward baseball players a little less if he felt an equal amount of resentment toward management. But, for some reason, he doesn’t.

      • Incontinentia Buttocks

        erp…”management” = ownership (obviously) in this case

      • No one dreams of being the guy in the suit when they’re 8 years old.

        • Actually, maybe that’s the problem. His youthful MLB dreams have passed him as widely as a Chuck Knoblauch throw to first, but he can still believe he’ll get filthy rich.

          • IIRC from the original article, he basically did say “I sympathized with them back when I had hope that I might be cashing these checks one day, but now that that’s out of the question fuck them.”

  • medrawt

    There are forms of revenue that didn’t exist in Hank Aaron’s day, such as cable television, that have contributed to players’ rising salaries.

    I can’t speak to MLB, but in the context of the NBA and I believe the NFL, this is something like saying “there are some protections against infection that didn’t exist 150 years ago, like antibiotics.” The explosion of TV revenue *is* the major profit driver for NBA franchises, and in particular the ability of teams like the Celtics and Lakers to strike lucrative deals with local networks (and the Knicks owning their own network) is the primary driver of franchises’ financial inequality in the past decade or so.

    • medrawt

      addendum: and the future here is so bright that league execs oughta be wearing shades; this would require knowing something about the TV business, and since it’s not clear Mr. McClelland knows anything about the sports business I’m not feeling charitable, but sports is the last still-thriving bastion of the traditional model of monetizing television, the kind of programming young DVR-savvy viewers are absolutely most likely to want to watch as it’s happening. (Even appointment-TV for the AMC set is often time-shifted just enough to allow commercial fast-forwarding.)

    • Scott Lemieux

      Yeah, but if the NFL had a hard cap, they would tell the networks to take their money and shove it. Wait, what?

      • Nick

        And if the NFL had a hard cap, they wouldn’t rip fans off with Personal Seat Licenses and exorbitant parking rates and charging full-price for preseason games that you’re required to buy as part of a season ticket package.

        • efgoldman

          UPS will be bringing your unicorns by tomorrow.

        • the original spencer

          Why wouldn’t they? The NFL already has compelling evidence that fans will gladly fork over that money, because they’ve been doing exactly that for years now. Is there any evidence at all that the presence or absence of a hard cap figures for even a fraction of a second in the decision process of the average NFL fan?

          Of course not. The fans pay because they have to. They’ve shown the owners that they’re willing to allow themselves to be ripped off. So I have to question your analysis here.

          • elm

            I think, perhaps, you missed the part that was Nick’s sarcasm. Hint: his whole comment is sarcasm.

  • Bitter Scribe

    I can’t tell from this guy’s article whether he wants to bring back the Reserve Clause or is just pissed that ballplayers make a lot of money.

    • FMguru

      The latter.

      Nice going Slate, giving space to the functional equivalent of the angry unemployed drunk who’s always calling up daytime sports radio complaining about how players should be grateful that they’re being paid at all for playing a freaking game.

      • brad

        You have a problem with their basic business model?

        • the original spencer

          The drunks have a great business model.

      • hb

        Yeah, the piece is pure garbage, but it’s so dime-a-dozen — failed jocks pushing resentment and bad econ, film at 11! — that it seems wasteful to even engage it in detail. What bugs me more is Slate’s willingness to run absolutely anything as long as it bashes workers #slatepitch style.

      • John

        The preferred phraseology is “for playing a children’s game,” I believe.

    • It’s clearly the latter. There’s no other reasonable explanation for the incoherence of it all.

      • Right. He’s not mad at Verlander for taking a bunch of money to play for a team other than the Tigers; he’s mad that Justin Verlander will make a lot of money while working in Detroit.

        • rea

          And you know, Verlander got a big contract, but he might have gotten more going elsewere.

          • I think you can go ahead and drop the “might” there.

  • Also too, I think it’s about high time to just stop ever invoking baseball’s anti-trust exemption, since approximately no one seems to have any fucking idea what the genesis/contemporary functionality of it is.

  • Hogan

    In 2008, the Boston Herald asked members of the Red Sox how they were voting in the upcoming election. Only one, Gabe Kapler, was a Democrat. You won’t find attitudes like that in a union shop.

    Mr. McClelland, meet the Fraternal Order of Police. Fraternal Order of Police, meet Mr. McClelland. I’m sure you have a lot to talk about.

    • djw

      Right, that was the moment I realized his version of “respecting unions” is insisting that unions that don’t conform to a set of (outdated, insulting) stereotypes about unions he holds shouldn’t exist.

    • Kurzleg

      That’s what came to my mind too.

    • rea

      And even then, you get a lot of your percentage of Republicans by excluding the noncitizens. I don’t think Miguel Cabrera votes R. (Magglio Ordonez did commercials for Hugo Chavez).

  • brad

    I fully understand why Farley doesn’t go there, but the reserve clause was born in the same era as segregation in baseball, and as part of the same maintenance of a small group’s privileges.
    But apparently in this fantasy of the good old days hack writers were paid more comparably to the players, therefore justice.

    McClelland is still an idiot.

  • T. Paine

    Ah yes, the MLBPA killed the American labor movement. I’m convinced!

  • DexFarkin

    It’s also missing that free trade and the retirement of the reserve clause in baseball has actually improved the safety of the players. Managers used to have no issue running out rookie pitchers for 300+ innings a year because the value of a rookie, no matter how talented, is fairly low. Now, with the relative value of $ against WAR, you don’t go burning out a guy like Strasburg in his first couple of years, because replacing his value costs tens of millions to do on the free agent market, if even possible.

    • SteveHinSLC

      I don’t think this is right.

      Under the reserve system, if you found a gem like Strasburg, you knew you’d have him as long as you wanted him. You weren’t just training him so one day he could leave to pitch for the Yankees.

      (Unless you were the Kansas City A’s. Then you were always training players for the Yankees.)

      • DexFarkin

        Except history doesn’t show that was the case. Because you ‘owned’ him, in the larger sense, there was never a reason to be particularly concerned about his health since you owned dozens of others in the minor leagues. A rookie wasn’t an asset because their value irrespective of performance was so low.

        While free agency certainly accelerated player mobility, it also actualized player value, to the point that players who represented expensive commodities on the free agent market would be valued and protected through the minors and into the majors. When you figure that a guy like Strasburg will likely earn $15M during his first six years against a performance value upwards of $70M, his value is recognized in a way that simply wasn’t under the reserve clause.

        • ChrisS

          Hence some pitchers would rotuinely top 100 pitches per game and 30-40 games and 250+ IP in a season during the liveball era. The ones that could, did and are remembered fondly. The ones that couldn’t, didn’t. And they never had very long careers – if they had careers at all.

          Teams are most certainly learning that the most valuable player in baseball is a cost-controlled starting pitcher that can throw 200 innings and keep them in a game. Good pitching is very hard to find on the open market. It’s the reason that the Yankees gave CC Sabathia a blank check to sign, twice.

          • DexFarkin

            Exactly. I remember in an interview where Nolen Ryan was going on about how pitchers are babied now and how he routinely threw 300 innnings a year. Not one of the reporters pointed out that Ryan is a generational talent, and how many pitchers had 2-3 year careers before their arms fell off and they were shipped back to the minors and forgotten.

  • Very well done. I’m glad he submitted to the beating.

    I think it’s a mistake to think of baseball players as “labor” in the same sense as, say, autoworkers [even though they perform a physical task]

    Sit at a computer? You’re not “labor” according to this guy! That a lot of people agree is a much larger problem than his envy at Justin Verlander’s contract. (By the way, what percentage of MLBPA members are in Verlander’s pay class? 3%?)

    • Brandon

      I would imagine that this would disqualify a health number of union labor in this country given how many people in the public sectors belong to a union but don’t engage in “physical tasks.”

  • UserGoogol

    I don’t think there’s much analytical content in trying to draw a sharp line between management and the workers and arguing about which side of the line baseball players fall on. Managers are paid by the company to perform a service, just like other workers. Top-level managers have significantly more influence over what the company does, (and thus have little need for unionization) but if a business was a workers coop, the workers would still be workers.

    • I actually think this is relatively easy in baseball, since all of the teams are owned by private interests. You have your owner(s), and then everyone else, whether players, coaches, or front office staff, are employees.

  • Just a note from a baseball guy to say how good it is to see someone intelligently rebut the ridiculous anti-player sentiment that exists in sports, especially in baseball. There’s really only one appropriate piece of advice one can offer the economically illiterate people who believe sports owners would hand out lollipops and $4 primo seats to games if it weren’t for all those big, bad meanie players:

    http://www.youtube.com/watch?v=V1PqslRMWaE

  • Epist

    Hmmm. Actors and musicians are also performers, who also, too, banded together in unions and won important and lasting concessions against what had been an almost cartoonishly oppressive industry. Also, too, their stars make ludicrous amounts of money, while their bit players make orders of magnitude less. And yet, I never seem to see the vitriol directed at movie stars for making tons of coin that I see directed at sports stars. I mean, at least Justin Verlander plays the damn game, Harrison Ford made millions for pretending to manage Jackie Robinson.

    It’s almost as if there’s another reason people are angry at the money these players are making, something different about them that sets them apart from movie stars. I can’t quite put my finger on it….

    • In 99% of cases it’s a mix of resentment that they couldn’t play professional sports, the mistaken belief that increasing salaries create rising ticket prices, and an inability to remember that the players are employees of a private profit seeking industry and not government workers or something.

      The rest is people who hate sports altogether.

    • howard

      this is very much on point, so i’m going to go back to what i said the first time this discussion broke out: it is perfectly clear that entertainment stars are big winners in globalization.

      it’s true for baseball players, soccer players, basketball players, and football players, but it’s also true for movie stars, live entertainers, celebrity endorsers, autograph signers, and many more.

      but somehow, athletes get the opprobrium.

      to repeat another point i made previously: i’m willing to bet that the stones will earn more from 5 performances in 2013 than muddy waters earned his whole career, and that’s adjusting for inflation….

      • jim, some guy in iowa

        think it would take 5 gigs?

      • ChrisS

        It’s because their salaries are generally released to the public.

        The Stones and, probably more relevant to the demographic, Carrie Underwood and Blake Shelton or whoever the artist du jour is don’t release their salaries to the public and there are rarely protracted public negotiations. If Blake goes from Warner Brothers to Columbia for a lot more money, the fans rarely are privy to the dirty details and they don’t really care because he’s still going to be making music.

        Justin Verlander could have held out for a lot more money and gone to another team, and fans would be pissed because he wouldn’t be pitching for their team anymore. His selfish act betrays their fandom.

    • djw

      Yeah; it’s particularly interesting since you do encounter some bitching and moaning about the cost of attending movies, but you almost never see the absurd effort to tie it to Brad Pitt’s paycheck.

    • DarioVadi

      Maybe this is just my sensitivity here, but might it be that professional athletes in this country are much more likely than similarly well-paid professionals to be black, or even worse, foreign?

      • ChrisS

        black unlike P. Diddy, Jay Z, Beyonce, Will Smith, Morgan Freeman, Samuel L. Jackson, LL Cool J, Jaimie Foxx, Michael Jackson, Dr. Dre, and so many others?

        Nah, quick, how much did Jay Z make off his last record deal?
        It’s murky. But there’s a whole reporting subset of sports that quickly details every last cent of an athlete’s contract and what they might be worth. And once the details are out there, the “I can’t believe they’re paying this bum $22 million a year and he can’t even hit anymore …” tirades begin. Criticizing athletes is much easier because of statistics and daily leaderboards. It’s much harder for the lay person to quantify how adept singers, songwriters, and actors are at their craft.

  • I would expect that anyone paid to write about American sports (and American labor) would take the trouble to learn something about his subject. The members of the MLBPA are not, it is true, exactly like auto-workers, but then there are *many* unionized professions that are also not exactly like auto-workers.

    Now wait a second. Players have every right to unionize, and as between owners and players, I’d prefer the players reap the benefits of their labor, but the difference between a guild and a union is a significant difference and it is quite true that many of the concerns of player’s unions (or, for instance, talent guilds in the entertainment industry) are quite a bit different in terms of their impact on social justice and liberal causes than the concerns of a typical working-class trade union. The fact that this is a fight between millionaires and billionaires rather than between the working class and billionaires DOES matter.

    • “The fact that this is a fight between millionaires and billionaires rather than between the working class and billionaires DOES matter.”

      No it doesn’t.

      And at what point did it not matter for you? When the reserve clause was finally eliminated, meaning players didn’t have work second jobs in the offseason? When the average salary reached $100,000? $1 million? At what precise point does the equation switch?

      • The flip side of the point that the average person doesn’t really need to be concerned about the fiances of a professional baseball player is that, since the labor negotiations ultimately have basically no direct impact on the public whatsoever, all of this talk about sticking it to the unions is entirely about eroding the rights of the unions.

      • Here’s why it matters.

        I have substantial connections to the entertainment industry. Hollywood is heavily unionized. And to the extent that SAG, AFTRA, etc., are fighting for basic unionization rights, such as collective bargaining, sure, that’s an issue where I strongly support them.

        On the other hand, when they are performing their role as gatekeeper to the profession, they are actually hurting the working class, the unconnected, basically all the talent that comes to Hollywood every year to break into the industry but can’t do it because they can’t get a union card.

        And on that latter issue, the fact that they are a guild rather than a trade union, and that they are protecting the incomes and work opportunities of some very privileged people matters a lot.

        Similarly, the fact that I support players’ basic rights to organize doesn’t mean I also have to support the Designated Hitter Rule just because the unions like that it creates an additional job for players with seniority but who can’t field so well anymore.

        Because a guild is different from a trade union.

        • The designate hitter rule, of course, clearly does not create any additional major league jobs for union members, provided the size of the active roster remains constant at 25 players. Your ignorance is doubly amusing given that we aren’t even two years removed from the MLBPA agreeing to slotting the draft, for fuck’s sake.

          • mpowell

            Very true. But the draft slotting is a good example of his point. Unions tend to have seniority based pay, of course, and it seems like they tend to shaft younger and future members much more when giving up stuff to management… so actually this is a problem with all kinds of unions. It’s really hard to draw the distinction between a union and a guild.

            • The point isn’t that there is no gray area. The point is that unions for the privileged have a very different role and a very different relationship to liberal politics than unions for the working class do. The idea that just because the Player’s Union or SAG or AFTRA is a UNION! that it must be supported the same way and with the same fervency that we would support the Service Employees or the United Farm Workers is ridiculous.

              • The strawman goes down! The strawman goes down!

              • John

                You’re the same guy who spent the last thread on education attacking teacher’s unions, right? “I’m pro-labor, but I oppose labor unions in all non-hypothetical instances” is not very impressive.

            • This is true-ish, though in the case of sports unions I think it’s just fairly obvious that the players are simply unable to understand how compensation decisions are made, and easily fall prey to being pitted against one another by ownership propaganda to no benefit themselves (as MLBPA and NFLPA are quickly finding out now).

          • A simple web search will reveal the Players’ Association’s position on the Designated Hitter rule:

            http://search.yahoo.com/search;_ylt=A0oGdSC8zXZRxUcAjB5XNyoA?ei=UTF-8&fr=crmas&p=%2BMLBPA+designated+hitter+rule&fr2=sp-qrw-orig-top&norw=1

            Now, since I have to explain this to you (you apparently think you know more about it than I do but actually don’t), the DH has a seniority effect. It isn’t that it opens an additional roster space, it’s that it allows employment for some experienced players who can receive higher salaries but who can’t field well anymore. And that’s why the MLBPA opposes getting rid of it.

            • No, this doesn’t make any sense either, given that the most obvious impact of the DH rule has been to significantly curtail the use of platoon players/pinch hitters. So even accepting your premise that it provides ongoing employment to players who “don’t field well” (a debatable premise to begin with, but whatever), it’s done that primarily by taking jobs away from players who don’t do something else (mostly hit same-side pitching) well.

              And, again, as long as the size of the active roster stays the same, the net impact on overall employment at the MLB level is exactly zero.

              • Sherm

                It makes sense, Brien. The DH is an extra starter rather than an extra back-up, and is often compensated accordingly. David Ortiz makes a little bit more dough than your typical bench player.

                • Well, David Ortiz is also the best at the position in the game and would clearly have a job with or without the DH rule. On the hole, that’s clearly not the recent trend with respect to filling the position.

                  And it still doesn’t change the fact that Dilan’s argument is incoherent on its own terms. If anything it completely undercuts it by suggesting that being able to play defense is much less valuable than being an above average every day offensive players.

                • Sherm

                  Well, the DH doesn’t create any additional major league jobs obviously, but it increases overall player costs for management. What would a guy like Ortiz, at this stage of his career, be worth on the open market without the DH rule? And the DH rule also allows AL teams to give long-term contracts to aging players like Pujols.

                • The cost aspect of it would only seem to be relevant if American League owners were making a push to eliminate the rule, which they most certainly aren’t (and again, it doesn’t really seem to be driving up costs at all these days, as the emerging trend it to fill the spot with cheap veteran hitters, perhaps on minor league contracts, unless you have someone like Ortiz or Trumbo). And Ortiz himself is benefiting from a face-of-the-franchise premium to a much greater extent than he is the existence of the DH.

              • CaptBackslap

                But the average salary for an aging slugger who can’t field anymore is quite a bit more than a typical platoon/bench guy gets.

                • Which has no appreciable impact on the interests of MLBPA or the majority of its membership whatsoever.

                • the original spencer

                  You don’t think so? It seems to me that this would have the effect of raising the average salary across baseball by at least a small amount. That in turn would be in the interest of the MLBPA because it gives them a higher baseline salary during negotiations.

                • Where is this? How much a 10-12 year vet is making to DH has absolutely no bearing on an arbitration hearing, if you get that far, and the actual trend in paying DH only type veterans suggests that basically no management team is listening to “we should get more than you’re offering because of what Ortiz is making.”

                  Look, the first order problem here is that Espar’s framing of the assertion implies that the union is defending the DH rule from some sort of massive effort to get rid of it, which is obviously not happening. In fact, the union and owners both support the rule, at least in the current state, because it’s good for business, posing traditionalists and curmudgeon sports writers who prefer the greater number of automatic outs in the National League notwithstanding (it turns out that the average person who decides to watch baseball on television or in person does not, in fact, hate the game to the extent that the scribes bitching about three hour games in the press box do!).

              • ChrisS

                So even accepting your premise that it provides ongoing employment to players who “don’t field well” (a debatable premise to begin with, but whatever

                I don’t think there is a full-time DH in baseball that could field a position for more than spot starts.

                • That’s not really a very good standard. In the total absence of the DH, there’s basically no question whatsoever that Ortiz, Dunn, and certainly Trumbo would be everyday first baseman, and at least a half dozen others would be “regular” platoon players as well.

                • rea

                  Victor Martinez as well.

                • Well Martinez got his big contract to be a catcher, but yeah, he’d clearly still be getting work as a first baseman if there was no DH rule.

            • Scott Lemieux

              Your assumption that the MLBPA is the reason for the DH, however, makes about as much sense as McLelland’s causal arguments. The fact that pretty much every organized baseball league in the world except the National League has the DH makes it pretty clear that the rule isn’t being driven by some kind of union rent-seeking.

              Not that this wouldn’t be a silly reason to oppose the union even if it was true.

        • djw

          Guilds can, in some cases, engage in exclusionary practices that are harmful to the working class. How MLBPA does that, I have no idea, because they exercise no control whatsoever on who joins their ranks. That decision is made entirely be management. When the issue was one the table, the union fought to open up new slots (expanding rosters back to 25 from 24 in the settlement to the 1990 strike), without any control over who would fill them.

      • mpowell

        Dude, of course it matters. Do you happen to know how much the MLBPA contributes to the Democratic party? I’m only guessing, but I’d suppose the answer is: zero. As a point of principle, maybe it doesn’t matter to you. But as a point of political impact, it certainly does.

    • Of course, it’s only a fight between millionaires and billionaires specifically because the union succeeded in abolishing the reserve clause.

    • djw

      Depends on what you mean by “DOES matter”, which is vague. I’ll grant there are additional, urgent moral concerns for supporting, say, a union of marginalized, poorly paid workers that we don’t find in the MLBPA situation, but a) there’s no conflict here, and b) the remaining reasons to support the MLBPA and appreciate their accomplishments for their members, on both principled and consequentialist grounds, are more than sufficient to settle the matter. So “janitorial unions have greater moral urgency” is true in a sense, but not in a way that matters to our evaluation of MLB labor issues.

  • Mark Jamison

    The Stones likely make more in one performance than Muddy made in his whole career.
    It isn’t necessarily globalization that causes the huge salaries for athletes and entertainers (effectively the same thing). It’s a body of law and economic policy that favors both plutocrats and corporations. The vast amounts of money paid to both owners and players is extracted from society at large rather than from fans alone. Whether I ever attend a game or even watch one on television I am likely paying more for many products as a result of the huge marketing machines that have much less to do with simply attracting customers than they do about creating an inside game.
    Comments on the thread trash McClelland and his argument and I won’t dispute that he makes it poorly and inelegantly but there is something worth thinking about in what he says, not simply dismissing it because he might be jealous of athletes.
    Economic inequality is a growing problem in our society and I find it disconcerting that those who would point out the problems caused by ballooning CEO salaries aren’t the least bit troubled by exploding remuneration for both athletes and entertainers. The CEO who made twenty to fifty times the salary of the guy on the factory floor in 1960 has at least some similarities to Mickey Mantle who made about twenty to thirty times the salary of the average fan.
    No, players aren’t in the same league as owners but there are some similarities and there are some reasons to be concerned about the level of compensation. The Reserve Clause was bad and unjust but that doesn’t mean the situation today is reasonable.
    Athlete’s, in particular, benefit from a tremendous amount of social capital. High School sports teams receive resources that might better be expended on club teams and building a culture of general fitness (or on music or art classes). At the university level a tremendous corporatization has taken place. At the very least this diverts attention and focus away from education as a value in itself.
    For those in the thread who would trash McClelland’s argument as simply sour grapes coming from a disgruntled wannabe, the mirror might reflect a few overgrown adolescents still in love with the fantasy of the game. McClelland may be wrong but those dissing him haven’t got it right either.

    • The answer to this question is “taxing the earnings of very highly compensated workers,” not deciding before hand what employees will be allowed to earn…with their even wealthier boss getting to keep the rest. Simple enough?

      • Mark Jamison

        No, not simple enough. That doesn’t begin to address the fact that the industry benefits tremendously, actually exists as the result of lots of tax provisions – deductibility of interest, marketing costs and a whole slew of other favorable treatments both for the team owners and the companies that sponsor and buy a good number of the tickets.
        The argument really isn’t that players are too highly salaried, certainly in comparison to the owners they aren’t but that the tax and policy infrastructure that supports and creates the industry has some pretty negative societal implications.

        • So change it. This has fuck all to do with the subject matter at hand, though.

    • fledermaus

      “ballooning CEO salaries aren’t the least bit troubled by exploding remuneration for both athletes and entertainers.”

      Maybe that becuase CEO salaries have ballooned regardless of performance. Whereas ballplayers and actors are only as good as their last game/movie

      • Ballplayers are also being given the money directly by their employer, out of the team coffers, in stark contrast to the way CEO compensation is determined. If Justin Verlander and Felix Hernandez got to decide how much Zack Greinke would get paid by the Dodgers, the comparison might be a useful one.

        • Mark Jamison

          Ballplayers and actors are only as good as their last game/movie.
          Hardly – lots of mediocre players make multimillion dollar salaries and that doesn’t begin to address someone like A-Rod or Amare Stoudamire. Tom Cruise and Kevin Costner have more of their share of clunkers.
          Salaries may come from the team or the owners but basically they’re pass throughs and that doesn’t begin to discuss the culture of endorsements.
          The sports and entertainment industries are a microcosm of economic inequality run amuck. It filters throughout the industries – is there any possible justification for the highest paid public employee in every state to be a coach at a state university?

          • Thanks for making the fact that you can’t understand the difference between public and private employees explicit and saving me the effort of nutting it out.

          • brad

            I fail to see how any of what you’re saying bears any relation to McClelland’s arguments, or amounts to much beyond general complaints about how sports culture is overprioritized from a public good perspective.
            You’re not wrong in that respect, but paying A-Rod less won’t make college coaches less overpaid when they’re the only name talent part of those sports leagues with the right to be compensated for their time and efforts.
            I don’t like jocks either, but to blame elite level athletes for seeking fair compensation for doing things our society has decided to value very highly simply seems misguided.

            • I don’t even know that I’d go so far to say that it’s because society has “decided to value [baseball] very highly.” I mean, from a revenue standpoint, where does MLB really stand relative to any other industry/major corporate brand out there? I know that’s not a perfect comparison, but it seems reasonable enough to me.

              Anyway, baseball players make a lot of money because professional baseball is a business that has a need for a uniquely skilled workforce in order for the company (team) to be successful, and because there is in fact a fairly stark delineation in the talent of available workers. That’s really the long and short of it, and I’m not going to get too broken up about the players getting a higher share of the revenue the private sector business is generating, though I’ll certainly support taxing a hefty chunk of said income at a much higher rate!

              • brad

                Exactly, though there seems to a slow motion in discussions such as these towards a confluence where people start complaining the players are overpaid because they’re taking money away from the real job creators.

                • I don’t think that’s true, so much as there’s a “the players are really rich, ipso facto they must be bad because ‘workers’ can’t be rich.”

      • rea

        Good gravy, take a look around the world and then tell us again that the reason CEO salaries have increased so much is their increasingly better performance.

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