The antitrust exemption in baseball, the 1981 strike and the split season

*This is the second of a two-part series on baseball’s ongoing antitrust exemption that led to the players’ strike of 1981.

On June 12, 1981, Major League Baseball players began a strike that marked the beginning of the longest work stoppage in the history of the game. The longest, that is, until 1994, when the players’ strike cost the game the World Series. The 50-day strike built on the accomplishments of the previous players and had significant implications for the future of baseball.

As previously reported here on Forbes.com, the Supreme Court’s 1972 decision in Flood vs Kuhn maintained Major League Baseball’s antitrust exemption but ruled that baseball was subject to commerce regulations. The court reiterated that it was up to Congress to pass a law modifying or terminating the exemption. The reserve clause – which essentially meant that a player was the property of his team until the team decided not to sign him to another contract – was the issue Curt Flood sought to resolve in the Supreme Court case that bore his name. Although unsuccessful, the reserve clause issue was resolved without the help of the highest court in the land or its most unpopular institution (by today’s standards, which was not necessarily popular opinion in the 1970s). The crux of the matter was the arbitration that MLB and the players’ association (MLBPA) had jointly negotiated.

After pitchers Andy Messersmith and Dave McNally appealed the reserve clause, arbitrator Peter Seitz ruled that MLB players’ contracts could only be renewed for one season without the player’s consent. The December 1975 decision essentially put an end to the reserve clause and allowed the players to become free agents. When the players’ base contract with MLB expired after the 1975 season, the owners locked the players out and delayed the start of spring training. The main problem: the reserve clause. The owners insisted that Seitz’s decision would not become the norm and that the matter needed to be codified. The two sides negotiated for nearly two months, and the stalemate ended with both parties essentially agreeing to disagree. The result was, in fact, that the players won.

All of this led to the 1981 season. With free agents now the norm, owners tried by any means possible to protect their investment in their teams and their players. In 1981, the issue was how a team should be compensated when it lost a free agent to another club. The players, of course, argued that any form of compensation for the team losing a player would hinder the free agent market and would be just another way to reinstate the reserve clause. With no agreement reached, the players took to the picket line on June 12, 1981, causing the loss of 713 games and an estimated $72 million in revenue (an odd number by today’s standards).

When the strike ended on July 31^stit was decided that teams losing a “prime” free agent would be compensated by choosing from a pool of unprotected players from all teams, not just the team that signed the free agent. In addition, the players agreed that a player could not be signed as a free agent until he had completed at least six years of service. Despite the statement by the players’ union’s chief negotiator, Hall of Famer Marvin Miller, that this was “the most principled strike I have ever been a part of” and that it was “the association’s finest hour,” the end result was widely viewed as a “victory” for the owners. Tensions continued for so long that Miller ended up refusing to pose for a photo with MLB chief negotiator Ray Grebey.

With two months of baseball canceled due to labor unrest, the league had to find a creative way to determine winners and losers on the field, resulting in the infamous “split season.”

It was decided that the ranking list would be published at the start of the strike on 12 June^th would determine the winners of the “first half,” and then the baseball season would begin again on August 9^thwith the winners of the “second half” also making the playoffs. The Yankees, Athletics, Phillies and Dodgers each won the first half of their division and thus began playing baseball in August knowing they would make the postseason. The Brewers, Royals, Expos and Astros (then in the National League) fought their way into the playoffs by winning their divisions in the second half. Unfortunately, this format excluded two teams that might have had a better season overall. The Cardinals had the best cumulative winning percentage in the NL East (.578) over the Expos (.556) and Phillies (.551), and the Reds (.611) beat the Dodgers (.573) and Astros (.555), and yet neither team made the postseason because neither team won either half of the season. The Cardinals missed the Phillies by 1.5 games and the Expos by 0.5 games; and the Reds by the same margins over the Astros and Dodgers.

As all baseball fans know, the Yankees and Dodgers ultimately made it to the World Series, with the Dodgers winning in six games thanks to a young phenom named Fernando Valenzuela. The founder of “Fernandomania,” Fernando won the Rookie of the Year and Cy Young Awards and had a glittering career that included 173 wins in 17 seasons, creating a new fan base in Chavez Ravine in Los Angeles and across the country.

Valenzuela and all major league players before and after him were limited by a 1922 Supreme Court ruling. MLB teams operate under the broad umbrella of an exemption from the Sherman Antitrust Act. But through the hard work of the MLBPA and Marvin Miller, players were able to make progress – often against seemingly impossible odds. Curt Flood fathered Andy Messersmith and Dave McNally, who fathered the 1981 strike. And thanks to the 1981 strike, the youngest of 12 children, born in the small town of Etchohuaquila in Sonora, Mexico, was able to secure a 3-year, $5.5 million contract that in 1986 was the largest contract for a pitcher in MLB history.

MLB’s antitrust exemption could remain in place, or it could be repealed by Congress seeking to right past wrongs. Recent Supreme Court discussions and some Congressional wrangling make that seem more likely than ever. But until that happens, it will take a concerted effort, tireless fortitude, unwavering determination, and more than a dash of grit to ensure the players – and the broadcasters, too – get what they deserve.