The Strike: Who was right, who was wrong and how it helped baseball
Twenty years ago today, there was no baseball. On Aug. 12, 1994, the Major League Baseball Players Association went on strike, initiating what became, at the time, the longest work stoppage in American professional sports. Since surpassed only by the 2004-05 National Hockey League lockout, the baseball strike lasted 232 days and canceled more than 900 games, including the entire 1994 postseason and World Series. There wouldn’t be another game that counted until April 25, 1995.
The basic elements of the conflict were nothing new. Ever since losing the arbitration case that granted players free agency in December 1975, the owners had sought ways to limit free agency and restrict salary growth, going as far as to collude against free agents after the 1985, ’86 and ’87 seasons. After they were found guilty of collusion, however, salaries began to escalate, and the emerging disparity between the ability of large- and small-market teams to compete financially for top free agent talent led to a stratification in the league.
It was obvious to nearly everyone, save a few large-market owners, that revenue-sharing was a must. But the owners, led by acting commissioner Bud Selig, insisted on tying their revenue-sharing proposals to a cap on player salaries, and it was that issue on which neither side would budge in 1994. The players, led by union chief Donald Fehr, would not accept a salary cap under any circumstances, and the owners would not entertain any proposal that did not include a cap.
With the 1990 Collective Bargaining Agreement due to expire on Dec. 31, 1994, the players set a strike date of Aug. 12, believing that date would give the owners enough time to call their bluff, capitulate and resume the season in time for the September stretch run and postseason.
“It doesn’t matter what we do,” Dodgers player representative Orel Hershiser reportedly told the owners in the final negotiating sessions two days before the strike date. “You’re going to get rid of Selig and [lead counsel Richard] Ravitch, get a new negotiating team and you’re going to cave in.”
The players had plenty of reason to feel that way, given the recent history of labor relations in the sport. Seven times before, Major League Baseball had undergone a work stoppage (five of them occurring exclusively in spring training). All seven times, the owners blinked first. During the last major strike, in 1981, the owners caved in the day after their strike insurance ran out. In 1994, they couldn’t get covered. The players, who saw their resistance to a salary cap as a principled stand in favor of a free market for player services consistent with their previous gains in free agency, thought they would triumph once again.
What they didn’t count on was unprecedented unity by the owners. Only the Reds’ Marge Schott, a notorious loose cannon, and the Orioles’ Peter Angelos, awash in revenues from the paradigm-shifting Oriole Park at Camden Yards, broke ranks. In fact, the players didn’t know that Jerry Reinsdorf, the hardline owner of the Chicago White Sox, had presented a scenario to his colleagues that suggested that not only might the remainder of the 1994 season be wiped out, along with the postseason and World Series, but that play might not resume until 1996. The owners were in this for the long haul.
Fortunately for the players, the owners managed to stoke repeatedly the union's resolve, as well. On Aug. 1, 11 days before the strike date, the owners declined to make a $7.8 million payment to the players’ pension and benefit plan. On Dec. 23, eight days before the expiration of the existing basic agreement, the owners declared an impasse in the negotiations and unilaterally implemented a salary cap, among other changes to the game’s salary, arbitration and free agency structure. In early 1995, the owners announced their intent to field teams of replacement players made up of non-union independent and minor leaguers. In each case, the players filed an unfair labor practices complaint with the National Labor Relations Board.
What’s surprising looking back at the owners’ rhetoric is the degree to which they seemed to believe they could restrain the growth of player salaries. The salary cap they implemented in December 1994 (which never went into practical effect) was set so low that 21 of the then-28 teams would have exceeded it during the 1994 season. By way of comparison, in 11 years of the current competitive balance tax, only five teams have ever exceeded the threshold, and only once have three done so in the same season.
The players’ counter-proposals to the salary cap resembled the current luxury tax, but one was rejected out of hand by the owners because, according to a statement they released, “the 25 percent marginal tax rate proposed by the union is an illusion. It kicks in at a payroll level that is $8 million more than any club has ever paid.” The team with the highest payroll in 1994, according to a mid-season study released by the owners, was the Braves at $52.1 million. The owners, it appears, couldn’t conceive of team payrolls above $60 million. By the end of the decade, roughly a third of the league would have payrolls above $70 million and the league average payroll would exceed $60 million by 2001.
Cost certainty was the drum the owners kept beating. “The question here is a very simple one,” Ravitch said on Aug. 13. “The players went out on strike, their average compensation was $1.2 million and all we have been trying to find out is how much more do they want. We never get an answer to that question.”
Of course, that’s an absurd question to ask. The players wanted what every employee wants, which is what the market will bear and not a penny less. The owners, claiming that 19 of the 28 teams had lost money in 1994, insisted that the market could bear no more, but history has proven them wrong. Last year, the average player made $3.39 million, 75 percent more than what inflation adjustments alone would have produced, and baseball’s economy is thriving.
Ultimately, history wound up breaking the players’ way yet again. While Congress took aim at MLB's anti-trust exemption, the National Labor Relations Board found that the owners had illegally imposed the salary cap in December, prompting the owners to revoke it in early February. That was one in a series of rebukes against the owners by the NLRB.
The owners never would get their salary cap and would have to wait until 2003 for the implementation of a permanent competitive balance tax. More commonly referred to as the luxury tax, the competitive balance tax has been levied against an average of just two teams a year with roughly 89 percent of the tax paid over the last 11 years coming from just one team, the Yankees. Save for a brief flirtation with trying to get under the tax in the 2012-13 offseason, New York has spent indiscriminately despite the tax.
The strike that the late baseball historian (and founding SI staff member) Robert Creamer thought would send the game into a “nuclear winter” did have some lasting effects, however. Most painfully, it nearly destroyed Canadian baseball. The Montreal Expos, who had the majors’ best record when the strike hit, were forced to break up their team in the wake of the strike. After the team traded defending National League Cy Young award winner Pedro Martinez to the Red Sox in November 1997, attendance plummeted. From 1998 to 2004, the Expos drew more than one million fans in a season just once in an age when the Yankees and Dodgers regularly drew more than three million. In December 2001, Major League Baseball, in a game of franchise Three-card Monte, bought the Expos from Jeffrey Loria in order to allow Loria to buy the Marlins from John Henry in order to allow Henry to buy the Red Sox. Three years later, MLB moved the Expos to Washington, D.C. and renamed them the Nationals.Blue Jays were among the game’s most powerful franchises before the strike, winning the World Series in 1992 and ’93 and drawing more than four million fans to the state-of-the-art SkyDome every season from 1991-93, with a similar pace in ’94. Since the strike, however, the Blue Jays have failed to draw even three million fans in a single season, quickly falling into the bottom half of the league in attendance and failing to make the playoffs in any of the last 19 seasons despite the addition of two wild cards. The only other team not to make the playoffs since before the strike is the Royals, a small-market have-not on both sides of the strike. Kansas City, though, moved into first place in the American League Central on Monday night, while the Blue Jays are just two games out of the second AL wild-card spot.
There’s also a potent argument to be made that MLB's desire to win back fans in the wake of the strike was a major factor behind the offensive explosion that followed the strike, an argument taken up at length in Howard Bryant’s Juicing the Game (a book I edited). Certainly the home run record chase of 1998 can be tied to the full recovery of the attendance figures for multiple teams, including most of the National League Central, home to the Cardinals’ Mark McGwire and Cubs’ Sammy Sosa. Baseball may not have actively fostered the tilt toward offense in those years, but it also did little to counteract it, especially by turning a blind eye to performance-enhancing drug use.
The most inarguable impact of the strike, however, is also the most positive: It ushered in a new era of labor peace. With the owners having again failed to bust the union, the players disabused of the notion that the owners were incapable of presenting a united front and both sides concerned about the lasting damage another major work stoppage could have on the league, the two sides have negotiated and implemented new basic agreements without a strike or lockout in 1997, 2003, 2007 and 2012. There was still some brinksmanship, particularly in 2002, when a Sept. 1 strike date was set as the negotiations that would introduce the competitive balance tax and performance-enhancing drug testing went down to the wire, but not a game has been missed.
The two sides will attempt to keep the streak intact when the next round of negotiations arrives in 2016. If they do, it will mark 20 years of labor piece dating back to Nov. 27, 1996, when the owners, chastened by the strike, ratified the first basic agreement in major league history to be negotiated without a work-stoppage.