Major League Baseball Salaries and the Economic Effect Competition and

Major League Baseball Salaries and the Economic Effect Competition and the ConsumerAs long has there has been business, Management and Labor have warred against each other for a bigger piece of the pie. Major League Baseball is no different. In the early years of professional baseball the owners controlled the salaries of the period of happeners and decided where they could play and what they would be paid. The players were bound to their team by the Reserve Clause that stated, the services of a player will be reserved exclusively for that team for the coterminous season. This resulted in keeping the players salaries artificially low because the players were not allowed to offer their services to any other team. The Reserve Clause was in exercise for more than One Hundred years of baseball history. It was challenged several times but the owners had won every time, until in 1970 when the St. Louis Cardinals traded outfielder Curt Flood to the Philadelphia Phillies. Flood refused t o play for the Phillies and sued to become a free-agent. Floods nerve was in court for several years going all the way to the Supreme Court. He was neer able to play in the Major League again. While he did not win his case, he laid the groundwork for a later case that involved two pitchers, Andy Messersmith and Dave McNally who filed a grievance against the league contending that, because they didnt sign contracts with their previous teams they were free agents. The owners and the musicians Association agreed to submit to binding, impartial, arbitration in order to pay this case. On December 23, 1975 the arbitrator Peter Seitz ruled in favor of the players and the Reserve Clause was broken, and the era of free agency began in the Major Leagues. In 1976 when free agency began the average player pay was only $52 thousand dollars, but it has increased steadily ever since. By 1990 the average fee for a Major League Baseball player had risen to $589 thousand dollars. This Year base ball will start the 2001 season with an average player salary of more than $2 million, about 40 times higher than the typical wage in 1976 when free agency began. Average Major League Player Salaries 1976-2000 Year Average Increase/decrease Median1976 $52,300 --- *1977 74,000 41.49% ... ... _ap/ 19.2000 Major League Baseball Salaries USA Today. May 1, 2000. Arlington, VA.20.1999-2000 Major League Baseball Team and Player Salaries About.com. Aug 31, 2000. Chicago, IL. http//sportsbusiness.about.com/sports/sportsbusiness/depository depository library/salary/mlb/9900/ bl_teams_9900.htm21.Final 2000 Payroll Figures CNNSI.com. Nov 21, 2000. Atlanta, GA. http//sportsillustrated.cnn.com/baseball/mlb/news/2000/11/21/2000_payrolls/22.History of Highest Paid Players ESPN.com. Jan 15, 1999. Bristol, CT. http//espn.go.com/mlb/s/ml bsalary.html23.Highest Salaries CNNSI.com. Dec 11, 2000. Atlanta, GA. http//sportsillustrated.cnn.com/baseball/mlb/news/2001/10/20/highest_salaries _ap/24.Franchise Values The Hartford Courant. May 29, 2000. Hartford, CT.25.2000 MLB Team Payrolls About.com. Aug 31, 2000. Chicago, IL.http//baseball.about.com/sports/baseball/library/weekly/blteamsalaries.htm26.MLB Player Extend Collective Bargaining Agreement About.com. Aug 29, 2000. Chicago IL. http//sportsbusiness.about.com/sports/sportsbusiness/library/n/bl082900news.htm