Bring Back the Reserve Clause. Save MLB

C’mon man, are you serious? Bring back the reserve clause to major league baseball? Are you nuts? Well, not exactly. Next you’re gonna want to see the airlines reregulated. Well, from time to time, especially when confined to a miserable modern airport, the thought has crossed my mind. But I digress.

When I started college teaching, 1978 more or less, I had a brilliant, but rather eccentric office mate. He held a Phd in Economics from Virginia Tech, and had been a student of James Buchanan and Gordon Tullock. Virginia Tech was considered Chicago East at the time. My office mate, may he rest in peace, was a true product of the VPISU Economics department. He was dogmatic as Hell, believed in the Market the way I believe in God, and never let the facts stand in the way of a good economic argument.

Well, I left Villanova, where I started out, for the greener, but ultimately deceptively greener fields of what David Lodge called Euphoric State. That’s the subject of a future post. Here we gotta stick to baseball and the reserve clause.

I’m pretty sure the incident in question occurred after I went to California, because I heard about it from my former Chair, a good guy who deserved better faculty members than me and my office mate. It seems my late colleague, because he had won some sort of well deserved teaching award, had been invited to the VIP reception after graduation. Oh, oh. Bad move. He was really smart, but, well, not housebroken. And you know how that goes.

Apparently one of the guests at the shindig was a certain Paul Owens, GM of the Philadelphia Phillies. Owens was what they used to call “a good baseball man.” That means he was a hopeless reactionary, mainlined Wild Turkey, and probably made Cardinal Spellman look like a hopeless panty-waist. More importantly, he had been brought up in the days of what Major League Baseball called “the reserve clause.” I’m gonna explain this in brief for my younger readers. If you’re over 60, feel free to skip ahead. I’m going to defer to https://www.baseball-reference.com/bullpen/Reserve_clause

The reserve clause was a clause in player contracts that bound a player to a single team for a long period, even if the individual contracts he signed nominally covered only one season. For most of baseball history, the term of reserve was held to be essentially perpetual, so that a player had no freedom to change teams unless he was given his unconditional release

That changed with Curt Flood. Flood, an outfielder for the Cardinals from 1958–1969, was traded to the Philadelphia Phillies after the 1969 season. Flood was outraged, both because he had put down roots in St. Louis and because the team hadn’t even told him about the deal; he found out about it over the radio. Instead of submitting, Flood challenged the trade in the courts with the backing of the MLBPA. This time, the players were acting together and refused to be bought off. The suit eventually reached the U.S. Supreme Court, where Flood and the players lost.

Although the players lost the Flood case, they were still able to make progress. In the 1972 strike, they were able to convince the owners to accept binding arbitration for contract disputes. Several players then tried to refuse to sign contracts, play through one season under the reserve clause, and then demand free agent rights in arbitration. The owners, understanding that the reserve clause was under threat, were able to convince several players to relent, but in 1975 both Dave McNally and Andy Messersmith played through the season without a signed contract (actually, McNally retired partway through the season, then refused to accept a proposed salary increase in order to see his case reach arbitration).

Arbitrator Peter Seitz ruled for McNally and Messersmith. In essence, Seitz ruled that since the owners had written the contract, it was their responsibility to spell out its terms exactly. Because the reserve clause didn’t explicitly state that it would be applied to the season played without a signed contract, he had to accept the players’ interpretation that the clause only extended for one season and not in perpetuity. The owners challenged Seitz’s ruling in court, but it was upheld, ending over 80 years of the reserve system.

Now, my office mate, being a good free market guy a la Virginia Tech, had no time for stuff the restricted competition, of which the reserve clause in baseball was a shining example. Owens, steeped in the whiskey-sodden traditions of MLB, thought that baseball depended on the reserve clause, and he hated free agency, aka, “the free market.” He had distinguished company. Sparky Anderson, the long-time manager of the Reds and the Tigers, detested free agency. He thought it was ruining baseball in the 1990s, and bailed out of the game, saying he couldn’t stand what it had become. Oh, God, Sparky, if you could see it now.

Now, Villanova lore has it–I wasn’t there, you see–that my office mate and Paul Owens tangled at the post graduation reception over the reserve clause. I’m sure Owens was three sheets to the wind. My office mate didn’t need liquor to be outrageous. Ownes apparently told my office mate that baseball needed the reserve clause because it spent so much in training and grooming young players–only a few of whom would ultimately make it to the Bigs-that the reserve clause made perfect financial sense. My office mate, LOL, proceeded to tell Owens that this was precisely the justification that the Soviet Union used in its refusal to let skilled Jewish scientists and intellectuals emigrate to the West. In other words, Owens, red-white-and-blue American baseball man, was a Commie. Much merriment ensued.

I take it there was a scene. On graduation day. Between an Honored Guest of Villanova –and some smart-ass VU pointy head economist who was a libertarian. I only heard stories about it, but, damn, I wish I had been there. The two of them deserved each other, but, nisi sed bonum. I missed out on a great time. Years later, I got my revenge on Owens, who had come down to field-managing the club after firing somebody, at Candlestick Park. I stood up and called him every name I could think of, much to the chagrin of my sweet wife, who was my date, not to say of the San Francisco Giants security people, who were getting ready to remove me. Payback, Owens, is Hell. I called him every name I could think of, in honor of my office mate (strictly speaking, at this point, he was still alive). At one point, going out to the mound, Owens stopped, looked around, and he stared straight at me. I gave him the finger. It felt good.

Now, what has all of this to do with economics, the reserve clause, and saving baseball?

Glad you asked.

Look, I don’t claim any expertise in baseball. I’m just the average fan. I’m always astounded at how much real students of the game know. I don’t consider myself a real student of the game, although I’ve watched my share. In fact, I guess all I do is follow the Philadelphia Phillies. That is hardly the same as being a serious fan. And even there, it’s been years since I’ve listened or watched every game. Probably the last season was 1980, which is when my life got turned upside down and I left Philadelphia. Probably for good. Anyway. I watch baseball when I can these days. And I follow the Phillies via the Inkwire. That’s about it. Too many other things call, and the caliber of the Phillies play is not such as to give up some more productive use of my time–like going to the head. Honestly, they stink.

I think back to when Ryne Sandberg managed the Phillies in the early 2010s. He was a HOF player and a true pro. I remember him trying to do base running drills with one of the teams he manged. The players didn’t like it. Ok. Maybe Sandberg, as good as he was, wasn’t cut out to be a manager. It happens. But then consider what Mr. Philly, Larry Bowa said–and Bowa flopped as a manger in Philly too

“When Ryno came up, I thought he was going to be a good player,” Bowa said. “But did I think he was going to be a Hall of Famer? No. He worked. A lot of Hall of Fame guys have natural ability. He had the ability and he worked. I think he thought if he worked that hard, why can’t everybody work that hard? He was shocked at not everybody, but some guys that were on the fringe. He’d look at them and say, ‘Why don’t you work harder?’ That bothered him a lot.”

Yeah, I get it. I looked at a lot of my students, especially the undergraduates since 2010. You’re not stupid, I thought. But you’re lazy and lack motivation. And I can’t give that to you. Nor can I give you the fundamentals you didn’t get in grade school. A lot of my students couldn’t do stuff that I had learned to do by the time I was in junior high. Spelling, grammar, organization, thinking in a straight line. Forget it. They were hopeless. And I couldn’t give them the fundamentals that they didn’t have. It was too damn late. You need five years of Sister Marie Suzanne. And you’re not about to get it. Frankly, they don’t pay me enough. They expect a scholar and a babysitter? Forget it. It’s not happening. Sister Marie Suzanne didn’t have a professional reputation to worry about. I did.

But then I watch the state of modern baseball. Oh my God. I watch the Phillies (among others) make mistakes that Little Leaguers shouldn’t make. Where is the play? What are the rules? How many outs are there? Do I cut off the throw from the outfielder? Where do I throw the ball if I do? How does a catcher block a low pitch? And on and on and on. They may be better athletes, bigger and stronger, but they play stupid, as if no one ever bothered to teach them the fundamentals. And then I wonder.

The idea idea behind the reserve clause, an “exclusive services contact”, was that you spent an awful lot developing players knowing full well very few would make it. But when they did, you had their services for the duration. Maybe that was–and I think it was–an abuse–but any decent economist can explain why an exclusive services contract exists. You invest a great deal in some raw talent. Most don’t make it. But you are compensated by the few who do. Economists call it monitoring your dependencies. And, alas, it makes more than a little sense.

I sometimes wonder how much teams spend these days in actually developing their players? Do they figure they can’t hold on to them that long anyway (I think maybe 12 years max, both minor and major leagues), so there’s a limit to how much you want to spend developing a player? I don’t know. I’d welcome someone coming in here and telling me this is complete nonsense, like most economic theory is. Go ahead, make my day. Otherwise, I’ll keep wondering if the reserve clause was really as bad an idea as the players made it out to be. Meanwhile, enjoy your next bat flip. That, they can do.

Where have you gone, Joe DiMaggio?

[Note: I apologize to early readers for so many typos. It’s true. You really see what you think is there. Not what is there. Like a lousy umpire calling balls and strikes]