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Until about 1975, major league baseball players almost never enjoyed free agency. They could not shop themselves to other teams unless their employer no longer wanted them. They typically received a one-year contract during the offseason, but when the contract ran out the “reserve clause” reserved that player to his current ballclub for one additional season. His only option was to sit out an entire year unpaid, an option very few players chose to pursue.

Michael J. Haupert writes in the Economic History of Baseball:

Player contracts have changed dramatically since free agency. Players used to be subject to whatever salary the owner offered. The only recourse for a player was to hold out for a better salary. This strategy seldom worked, because the owner had great influence on the media, and usually was able to turn the public against the player, adding another source of pressure on the player to sign for the terms offered by the team. The pressure of no payday – a payday that, while less than the player’s MRP, still exceeded his opportunity cost by a fair amount, was usually sufficient to minimize the length of most holdouts. The owner influenced the media because the sports reporters were actually paid by the teams in cash or in kind, traveled with them, and enjoyed a relatively luxurious lifestyle for their chosen occupation. A lifestyle that could be halted by edict of the team at any time. The team controlled media passes and access and therefore had nearly total control of who covered the team. It was a comfortable lifestyle for a reporter, and spreading owner propaganda on occasion was seldom seen as an unacceptable price to pay.

Baseball Reference now has year by year salary figures for the 1946-1974 era for many of the most famous players (often Haupert’s archival research), and it makes pretty amusing reading.

Stan

For example, in 1953, Augie Busch bought the St. Louis Cardinals and and the St. Louis Browns moved to Baltimore, leaving the Cardinals as the only game in town. That season Stan Musial of the Cardinals hit .337 with 30 homers and 113 RBIs, 127 runs scored, 53 doubles, and 105 walks, so the St. Louis Cardinals cut his salary from $75,000 to $57,500. Musial responded by hitting .330 with 35 homers and 126 RBIs, so the Cards cut his salary to $50,000.

How could you not make money owning a baseball team under monopsony?

Yogi, Ted, Mickey

I also like how the Boston Red Sox cut Ted Williams’ salary from $90,000 in 1951 to $50,000 by 1956. Then after 1957 when Williams batted .388, with a .526 on-base average, and a .731 slugging average, the Red Sox gave him a raise back to $60,000.

Mickey Mantle was the best player in the American League as judged by Wins Above Replacement each year from 1955-1958. In 1957, Mickey batted .365 with .512 on-base average and a .665 slugging average and the Yankees gave him a raise from $60,000 to $65,000. (Don’t assume that the ball was juiced in 1957 — Mantle and Williams were just playing in their own universe that year.)

In 1959, Mantle fell all the way to the 3rd highest WAR in the AL, and Yankees cut his salary from $70,000 to $60,000.

Ah, the Yankees … The greatest winner in the history of baseball was the Yankee’s catcher Yogi Berra, who played in 14 World Series from 1947 through 1963, winning 10 of them. With almost twice as many teams today, that record will likely never be broken. Derek Jeter, for instance, has been in seven World Series, winning five of them.

In the seven seasons from 1950-1956, during which the Yankees won five World Series, their catcher Yogi Berra was no lower than fourth in the AL Most Valuable Player voting, winning three MVPs. In 1957 he fell to 14th in the MVP, so the Yankees cut his pay. The next season he was 18th so they cut his pay again. Then he clawed his way back to 12th most valuable player in the league, so they let him have the same salary.

Olivia de Havilland

The funny thing is that when the arbitrator threw out the Reserve Clause and free agency finally came along in the mid-1970s, many people were convinced baseball would be ruined.

The movie business had a similar gimmick where the studios could arbitrarily extend an actor’s seven year contract whenever he refused to appear in a movie with a bad script. That’s the ending to the Coen Brothers’ “Barton Fink:” the mogul takes a disliking to the writer Fink, so he vows to extend his contract forever.

Here’s the tough guy who stood up to the Hollywood studio cartel and filed a lawsuit in 1943 arguing that seven years meant seven calendar years.

She eventually won in the California Supreme Court.

A rumor is that when Sandy Koufax and Don Drysdale teamed up to threaten to hold out unless they got raises from the Dodgers after going 26-8 and 23-12 respectively in the Dodgers’ 1965 World Championship year, they threatened to sue in California by analogy to the De Havilland rule. Eventually, the Dodgers caved in and gave them modest raises.

 
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  1. OT: Steve Sailer’s commentaries on the War in Gaza have been conspicuous by their absence. Very interesting

    • Replies: @DCThrowback
    @cj

    #whocares

    , @keypusher
    @cj

    Sailer has said many times that he tries not to write about stuff that everyone else is writing about, unless he has a different & worthwhile perspective to offer.

  2. August Busch Jr. went by “Gussie,” not Augie.

  3. @cj
    OT: Steve Sailer's commentaries on the War in Gaza have been conspicuous by their absence. Very interesting

    Replies: @DCThrowback, @keypusher

    #whocares

  4. Just looking backwards..

    Say a player like Williams or Mantle sat out a year relatively early in their career.

    If I understand the rules in place correctly, they could then have signed with any other team, or resigned.

    So why didn’t anyone ever pull the trigger? Heck seems like you could write a hypothetical alternate history baseball novel where one of these guys does it early.

    I just think in any era there would have been a bidding war over players like Williams. There is collusion, and then there things that cannot be held in check.

  5. She must be tough-she’s still around.

    • Replies: @Scotty G. Vito
    @anony-mouse

    Ha, nice revenge on little sis for taking away her Oscar 70 years ago

  6. Steve,

    Thank you for writing “on base average” and “slugging average” instead of “. . . percentage.” We baseball-language purists are making headway.

    Now, if only we can make some progress in the battle against “ground rule double.” Not that there’s no such thing as a ground rule double, but most of what are so called are not so.

  7. The disruption in soccer came in 1995 when Marc Bossman sued his club, the Belgium football federation and UEFA(European football federation).

    It dramatically changed football. The ruling made it illegal to have restrictions on foreign players(except from outside of the EU). It also allowed players to freely go into contract with any club after the current contract was up. It gave the players power but it also empowered agents who have come to be known as leaches of the game(normally from clubs wanting to contain saleries). It also meant clubs who prided themselves on creating talent were in a big disadvantage and thereby favoured a structure of few top clubs getting most of the talent. Since then it has been much harder to break through to the top. On the other hand why shouldn’t players be treated as any other labourer?

    The libertarian in me tells me they should have the same rights and why not complete labour freedom. On the other hand I like that players have some constraints that keeps it somewhat rigid. After all, the rigidity and localism is what makes soccer special.

    http://en.wikipedia.org/wiki/Bosman_ruling

  8. All of the old Hollywood dames were tough gals and worked out their own deals with the old moguls. They fought hard and they played hard. Women have had a much harder time in the free market post-studio Hollywood.

  9. Back during the Great Healthcare Debate of 2009, the truly great Mark Stern routinely pointed out that 40% of the doctors in Great Britain, a nation not known for its under-educated populace, are foreign-owned immigrants, a result of the state limiting the earning power of government-employed doctors. Monopsonistic abuse is thus far more consequential than limiting the earning potential of actresses and has bell players. It causes the state to import tens of thousands of workers, if not hundreds of thousands, who undermine the earnings potential of natives, especially of the intelligent women who are disproportionately drawn to the medical field.

  10. By the way, that snapshot of Yogi, Ted and Mickey must have been taken at an All Star Game. How can we tell?

    It’s not the bunting. That could seen on Opening day, too.

    Well, on further reflection, it couldn’t be Opening Day, since that is obviously not Fenway Park or Yankee Stadium. What’s the other reason?

    • Replies: @Jimbo
    @I, Libertine

    What, nobody's answered Jim O's puzzler yet?

    Simple - they are all wearing white (home team) uniforms...

    Replies: @I, Libertine

    , @Brutusale
    @I, Libertine

    All Star Game. Yankees and Red Sox both wearing home uniforms.

  11. “A rumor is that when Sandy Koufax and Don Drysdale teamed up to threaten to hold out unless they got raises from the Dodgers after going 26-8 and 23-12 respectively in the Dodgers’ 1965 World Championship year, they threatened to sue in California by analogy to the De Havilland rule.”

    Anti-Semitism!!!

    Okay: Semi-Anti-Semitism.

  12. OT: Steve Sailer’s commentaries on the War in Gaza have been conspicuous by their absence. Very interesting

    He hasn’t been talking about ISIS or the Ukraine either, so maybe he just doesn’t care much about foreign policy.

    Of course, he is interested in Jews. Steve is no Israeli-firster, but he does recognize Israel as a civilized country that deserves to exist and is too good at “noticing” to see the Arabs as noble savages happy to make peace with Jews. On this site, no leftist scumbag is too evil to publish as long as they hate Israel.

  13. Were those people who thought that baseball would be ruined wrong?

    My impression from the ballpark is that most of baseballs’ existing customers fell in love with the game in the pre Curt Flood Era. The game has never been less culturally relevant.

    MLB expects teams to compete financially for players, but does not allow teams to compete for revenues. They have a wierd, unequal, territorial revenue system that says Boston, or example, gets all of the revenues from New England, but Pittsburgh only gets Western PA, even though many more people and more rich people live in New England.

    That’s unequal, and the same teams are on top of the standings every year. If MLB didn’t give your team a good territory, your team stinks most years.

    The rigged nature of the contest was evident to all after Curt Flood, although it existed before then.

    • Replies: @buzz arlett
    @Rotten

    Not sure I follow your reasoning. Free agency began in '76. The Yankees benefited by signing Reggie Jackson, but only got to one Series between '78 and '96. The Red Sox, with that protected territory you think is so important, and a famously generous owner, didn't make the Series untll '04. The Dodgers, with perhaps the best cash flow of all, haven't been in the Series since '88. Meanwhile, an expansion team with an extremely marginal fan base won two championships in the first ten years of its existence. Obviously, from the standpoint of competitive balance, there's been nothing remotely "unfair" about the setup. The old system was better for the serious fan because you get a better effort from players who don't have guaranteed generational wealth. But according to you those fans aren't culturally relevant, so where's your problem?

  14. iSteveFan says:

    Monopsony – Thanks for this post. A few years ago on the old iSteve there was a post about immigration and wages. I can’t remember all the details, but a guy supporting immigration pointed out that immigrants were able to come into the major league baseball market and salaries increased dramatically. He then posed the question to all of us nativists to explain how this flew in the face of our conventional wisdom which said that increasing immigration would lower wages.

    Of course there were some good attempts to explain this phenomenon about baseball and foreign labor not resulting in lower wages. But I don’t think anyone hit on monopsony or the reserve clause.

    Now I know if it ever comes up in the future.

  15. @anony-mouse
    She must be tough-she's still around.

    Replies: @Scotty G. Vito

    Ha, nice revenge on little sis for taking away her Oscar 70 years ago

  16. I thought that a player who wanted to “play out his option” could do so by not signing, and the owner could only cut him 20%. Maybe that was one of Marvin Miller’s early reforms, when the union was just getting off the ground. Being abused didn’t prevent players from acting like owners. In his biography, Hank Greenberg says that when he was Cleveland’s G.M. in 1954, he cut Al Rosen’s salary after Rosen had a great year.

  17. “As editor of their high school newspaper, Olivia apparently published a fake will: ‘I bequeath to my sister the ability to win boys’ hearts, which she does not have at present’ ”
    http://www.hollywoodreporter.com/race/joan-fontaine-olivia-de-havilland-666087

  18. @cj
    OT: Steve Sailer's commentaries on the War in Gaza have been conspicuous by their absence. Very interesting

    Replies: @DCThrowback, @keypusher

    Sailer has said many times that he tries not to write about stuff that everyone else is writing about, unless he has a different & worthwhile perspective to offer.

  19. @Rotten
    Were those people who thought that baseball would be ruined wrong?

    My impression from the ballpark is that most of baseballs' existing customers fell in love with the game in the pre Curt Flood Era. The game has never been less culturally relevant.

    MLB expects teams to compete financially for players, but does not allow teams to compete for revenues. They have a wierd, unequal, territorial revenue system that says Boston, or example, gets all of the revenues from New England, but Pittsburgh only gets Western PA, even though many more people and more rich people live in New England.

    That's unequal, and the same teams are on top of the standings every year. If MLB didn't give your team a good territory, your team stinks most years.

    The rigged nature of the contest was evident to all after Curt Flood, although it existed before then.

    Replies: @buzz arlett

    Not sure I follow your reasoning. Free agency began in ’76. The Yankees benefited by signing Reggie Jackson, but only got to one Series between ’78 and ’96. The Red Sox, with that protected territory you think is so important, and a famously generous owner, didn’t make the Series untll ’04. The Dodgers, with perhaps the best cash flow of all, haven’t been in the Series since ’88. Meanwhile, an expansion team with an extremely marginal fan base won two championships in the first ten years of its existence. Obviously, from the standpoint of competitive balance, there’s been nothing remotely “unfair” about the setup. The old system was better for the serious fan because you get a better effort from players who don’t have guaranteed generational wealth. But according to you those fans aren’t culturally relevant, so where’s your problem?

  20. Rich People’s Problems.
    Interesting but old hat for baseball fans.

  21. Maybe one factor that helped the reserve clause survive into the 70s was that all salaries were compressed compared to today. Corporate presidents in the 50s (they weren’t called CEOs yet) made $100-200k/year, so superstar athlestrs making half of that didn’t seem so bad.

    • Replies: @Steve Sailer
    @International Jew

    Yes, and movie stars didn't make that much either.

  22. @International Jew
    Maybe one factor that helped the reserve clause survive into the 70s was that all salaries were compressed compared to today. Corporate presidents in the 50s (they weren't called CEOs yet) made $100-200k/year, so superstar athlestrs making half of that didn't seem so bad.

    Replies: @Steve Sailer

    Yes, and movie stars didn’t make that much either.

  23. I personally prefer the old system. I do not think today’s so-called baseball greats (and other athletes) deserve the exorbitant pay they get, since it is US who pay for them!

  24. Owners made less money off the game back then. Tickets were much cheaper, and there weren’t TV rights, merchandising, etc.

    It also wasn’t really culturally acceptable to pay ballplayers a lot of money, since they were playing a game for a living, rather than doing real work.

  25. That’s how they blackmailed Musial for being closeted. They had the reporters on the Cards’ payroll promote the “Stan the Man”nickname in print and said that as soon as he got out of line or demanded more money, they’d be putting “Stan the Man-Lover” all over the papers until the whole country knew he was a fairy.

    • Replies: @Steve Sailer
    @Bill M

    You can tell because he was married for 71 years and had four children: that's just proves he was trying too hard.

    Replies: @Bill M

    , @Bill M
    @Bill M

    It was Ted Williams who was closeted, not Musial. Musial was bisexual, and it was well known, at least in the Cardinals' clubhouse.

    Replies: @Steve Sailer

  26. @Bill M
    That's how they blackmailed Musial for being closeted. They had the reporters on the Cards' payroll promote the "Stan the Man"nickname in print and said that as soon as he got out of line or demanded more money, they'd be putting "Stan the Man-Lover" all over the papers until the whole country knew he was a fairy.

    Replies: @Steve Sailer, @Bill M

    You can tell because he was married for 71 years and had four children: that’s just proves he was trying too hard.

    • Replies: @Bill M
    @Steve Sailer

    Well he had that whole Spartan ethos, both on and off the diamond. They don't make fairies today like used to, that's for sure.

  27. @Steve Sailer
    @Bill M

    You can tell because he was married for 71 years and had four children: that's just proves he was trying too hard.

    Replies: @Bill M

    Well he had that whole Spartan ethos, both on and off the diamond. They don’t make fairies today like used to, that’s for sure.

  28. Someone should write about the Yankification of pro hockey.

  29. “OT: Steve Sailer’s commentaries on the War in Gaza have been conspicuous by their absence. Very interesting”

    “He hasn’t been talking about ISIS or the Ukraine either, so maybe he just doesn’t care much about foreign policy.”

    But Steve did prepare longtime readers for the current ISIS crisis. http://isteve.blogspot.com/2007/04/yezidis-slaughtered-in-iraq-for-years.html

  30. @I, Libertine
    By the way, that snapshot of Yogi, Ted and Mickey must have been taken at an All Star Game. How can we tell?

    It's not the bunting. That could seen on Opening day, too.

    Well, on further reflection, it couldn't be Opening Day, since that is obviously not Fenway Park or Yankee Stadium. What's the other reason?

    Replies: @Jimbo, @Brutusale

    What, nobody’s answered Jim O’s puzzler yet?

    Simple – they are all wearing white (home team) uniforms…

    • Replies: @I, Libertine
    @Jimbo

    Yes.

  31. Olivia’s badass. Her family heritage is amazing; she had relatives with William the Conqueror. Her cousin was a well-known military aircraft designer (http://en.wikipedia.org/wiki/De_Havilland_Mosquito), her father was a patent attorney who set up practice in Japan, her mother was an actress.

    She didn’t work the entire time she took the studio to court, and won both her Oscars after her victory–and was also nominated for The Snakepit. Many of her movies aren’t famous, but are wonderful. The Heiress, for which she won her second Oscar, is simply one of the best movies of psychological cruelty ever made. As good as she is, Richardson’s a tiny step better.

    And at 98, she’s not the oldest living Oscar winner. Luise, she just keeps on going, and going, and going.

  32. @I, Libertine
    By the way, that snapshot of Yogi, Ted and Mickey must have been taken at an All Star Game. How can we tell?

    It's not the bunting. That could seen on Opening day, too.

    Well, on further reflection, it couldn't be Opening Day, since that is obviously not Fenway Park or Yankee Stadium. What's the other reason?

    Replies: @Jimbo, @Brutusale

    All Star Game. Yankees and Red Sox both wearing home uniforms.

  33. @Jimbo
    @I, Libertine

    What, nobody's answered Jim O's puzzler yet?

    Simple - they are all wearing white (home team) uniforms...

    Replies: @I, Libertine

    Yes.

  34. @Bill M
    That's how they blackmailed Musial for being closeted. They had the reporters on the Cards' payroll promote the "Stan the Man"nickname in print and said that as soon as he got out of line or demanded more money, they'd be putting "Stan the Man-Lover" all over the papers until the whole country knew he was a fairy.

    Replies: @Steve Sailer, @Bill M

    It was Ted Williams who was closeted, not Musial. Musial was bisexual, and it was well known, at least in the Cardinals’ clubhouse.

    • Replies: @Steve Sailer
    @Bill M

    Nah, it was Jackie Robinson. He and Branch Rickey were an item.

    Replies: @Bill M

  35. @Bill M
    @Bill M

    It was Ted Williams who was closeted, not Musial. Musial was bisexual, and it was well known, at least in the Cardinals' clubhouse.

    Replies: @Steve Sailer

    Nah, it was Jackie Robinson. He and Branch Rickey were an item.

    • Replies: @Bill M
    @Steve Sailer

    No, Robinson was the first female-to-male transsexual player. They played up the colored angle because America wasn't ready for a trans pro athlete at the time.

    That's why "he" went by "Jackie".

  36. Stan Musial was gay like Mike Piazza was gay. Well maybe not alternating playboy playmate gay but close.

    • Replies: @Steve Sailer
    @Sam Haysom

    Nobody was more obvious about being gay than Sandy Koufax: Jewish kid from Brooklyn who spent his post-baseball life living in small towns with his couple of wives and now lives with former first lady Laura Bush's college roommate, all while he works on his cars, fiddles with his high end stereos, and plays golf. Obviously, he's trying hard to cover up something.

  37. @Steve Sailer
    @Bill M

    Nah, it was Jackie Robinson. He and Branch Rickey were an item.

    Replies: @Bill M

    No, Robinson was the first female-to-male transsexual player. They played up the colored angle because America wasn’t ready for a trans pro athlete at the time.

    That’s why “he” went by “Jackie”.

  38. @Sam Haysom
    Stan Musial was gay like Mike Piazza was gay. Well maybe not alternating playboy playmate gay but close.

    Replies: @Steve Sailer

    Nobody was more obvious about being gay than Sandy Koufax: Jewish kid from Brooklyn who spent his post-baseball life living in small towns with his couple of wives and now lives with former first lady Laura Bush’s college roommate, all while he works on his cars, fiddles with his high end stereos, and plays golf. Obviously, he’s trying hard to cover up something.

  39. That’s the perfect example Steve. I will have to remember that one.

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