1994 Baseball Strike

On August 12, 1994 professional baseball players went on strike for the eighth time in the sports' history. Since 1972, negotiations between the union and owners over contract terms has led to major economic problems and the absence of a World Series in 1994.

All issues were open for debate due to the expiration of the last contract. Until 1968, no collective bargaining agreement had ever been reached between the owners and the players (Dolan 11). Collective bargaining is the process by which union representatives for employees in a bargaining unit negotiate employment conditions for the entire bargaining unit (Atlantic Unbound). Instead, the players were at the mercy of each owner who possessed the exclusive right, at the close of each season, to resign each player on his roster. If the owner chose to renew a players contract, that player had the option of agreeing to those terms or not playing baseball. As a result of the obvious imbalance in the labor situation, the players attempted on several occasions to organize a union. Although this process may seem like a simple one, baseball has proven that it can be very difficult. The players have been represented by various unions in the twentieth century, all of which have failed until the current union, the Major League Baseball Players Association. After fourteen years of negotiations between the current union and the owners' representative, the first 'basic labor agreement' between the two parties was reached. Led by Marvin Miller in 1968, the players received higher minimum salaries, better health insurance plans, and increases in retirement benefits. These so called "Basic Agreements" in major industries usually turn out to be more complex. As a result, strikes and lockouts have occurred ever since (Koppett 23).

The baseball strike which occurred in 1994 was really about one thing; money. Two major issues led directly to the interruption and eventually the cancellation of the entire season. After a 28-0 vote among the owners, they agreed to share revenue on the condition they could get the players to accept a salary cap. The issue of revenue sharing was directly linked to the salary cap. By taking this action, the owners signaled they had come to realize the problem of disparity between big market teams (New York, Los Angeles, Chicago) and small market teams (Seattle, Pittsburgh, Milwaukee). The problem, however, was that because the owners linked their revenue sharing with a salary cap, the players felt they were being asked to solve the owners' financial disparity problem. There is a noticeable difference in team payrolls, as displayed in 1993, when the the payroll of the Toronto Blue Jays was $48.4 million, compared with San Diego Padres' payroll of only $10.6 million (Layden 17).

Therefore, the idea of revenue sharing, wherein big market teams would transfer monies to the small market teams, was a good one, but it caused disputes among the owners as to how the formula would be worked out. Not all of the small market teams were in bad shape financially. In fact, some that had built or were building new stadiums such as Baltimore, Cleveland, and Texas were doing quite well. It was not until June 14, 1994, that the owners finally presented their collective bargaining proposal, 18 months after they voted to reopen the contract. The owners proposed a 7-year contract that would split their total revenue with the players, 50-50, while introducing a salary cap over the next four years (Dolan 26). The players had been making tremendous gains in wages through free agency, and they did not want to see that trend come to an end. Provided that revenues did not fall, the players would be guaranteed no less than $1 billion in pay and benefits scheduled for 1994. The proposal also eliminated salary arbitration, but allowed players with 4 to 6 years of major league service to become free agents (compared with the 6 years previously required for free agency), with a right of first refusal by the player's current club. For players with fewer than 4 years of service, a rising scale of minimum salaries was proposed, with the actual minimum amounts to be negotiated later on. Players' licensing revenue (about $80,000 per player) would have to be split with the owners. Depending on the average obligation to the players under the 50-50 split of total revenues, no team could have a payroll of more than 110 percent of that average or less than 84 percent (Dolan 33).

To the players, the owners' proposal had several shortcomings. The players' share of 50 percent of revenues would be a cut from the existing share of 56 percent. In addition, the players did not want to share their licensing revenue, and the loss of salary arbitration would remove a major impetus to higher player salaries. Although free agency would be liberalized, it came with the catch that the current club could retain a player by matching the offer of a club seeking a free agent. Another drawback was that the players' pensions, health overage, and other benefits would be funded out of their own 50-percent share of revenues (Atlantic Unbound).

The unions' executive director, Donald Fehr, estimated that the owners' proposal would cost the players over $1.5 billion in salary over the 7-year life of the contract. On June 18, the union predictably rejected the salary cap and other major aspects of the proposal. The union then proposed lowering the standard for qualifying for salary arbitration to 2 years, raising minimum salaries to $175,000 and, even eventually $200,000 (Monthly Labor Review). With the union dismissing the owners' proposals, it was not surprising a few days later when the owners rejected the union's offer. No bargaining had even really taken place. The real purpose of the negotiators (Richard Ravitch and Donald Fehr) was to get their positions before the print and the broadcast media. This was very consistent with contract negotiations over the past quarter-century in baseball and suggested a strong likelihood of a work stoppage (Layden 26).

Baseball negotiations in the modern era have been plagued by strong-willed personalities. Marvin Miller set the tone when he refused to accept the paternalism between owners and players that had existed for so long in the game. Instead, he was determined to establish an adversarial relationship that continues to the present.

The players felt they had little alternative to striking. Had they continued playing through the season without coming to an agreement, the owners could have declared an impasse and most likely implemented their proposals. Also, the timing of the strike, which began on August 12, 1994, was favorable for the union because it inflicted maximum damage on the owners. That late in the season, the players had received most of their pay, but the owners were vulnerable