FOR LOVE OF THE GAME:

179

FOR THE LOVE OF THE GAME

WHY MAJOR LEAGUE BASEBALL PLAYERS

SHOULD DEMAND A SALARY CAP AND REVENUE

SHARING IN THE 2011 CBA

Kimberly B. Taft

Introduction ..........................................................................................

180

I. Major League Baseball’s Competitive Balance Problem ................ 183

A Lack of Competitive Balance Means a Lack of Interest in

the Sport ................................................................................. 183

What a Lack of Parity Means for Players ................................... 185

II. Salary Caps and Revenue Sharing ................................................. 187

Salary Caps as the Answer .......................................................... 187

Revenue Sharing as the Answer .................................................. 189

The “Partnership” Model .............................................................. 190

Major League Baseball’s Current Model ..................................... 191

III. It Is in the Players’ Best Interest to Use the Collective

Bargaining Process to Achieve Competitive Balance ................. 193

The History of Collective Bargaining in Baseball ...................... 194

Players Would Benefit from a Hard Salary Cap and Revenue

Sharing ................................................................................... 196

Conclusion ............................................................................................. 202

B.A. 2009, University of Alabama, cum laude; J.D. Candidate 2012, University of

Mississippi School of Law. This article was first written in Spring 2011 under the

supervision of Professor William Berry at University of Mississippi School of Law, and

has been updated for publication. In addition to Professor Berry, the author wishes to

thank William H. Glover, Jr. for his support and guidance in writing this article. I am

also grateful to the editors of the M

ISSISSIPPI SPORTS LAW REVIEW who offered

comments and constructive criticism. Finally, I wish to thank my parents, Walter Taft,

Jr. and Brenda Jones Taft, for their perpetual love and support in all of my endeavors.

180 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

NTRODUCTION

Americans must realize what makes NFL football so great:

socialism.

-- Bill Maher

Many avid baseball fans will agree that Major League

Baseball (“MLB”) is in trouble. After the 1994-1995 work

stoppage, average attendance per game declined from 31,612 to

25,021.

Through the first two weeks of the 2011 baseball season,

six teams had set all-time lows for single-game attendance at their

home ballparks.

As of mid-June in 2011, attendance at MLB

ballparks was down significantly, by 475,476 fans, from the same

point in the prior season.

This year, 111 million people watched

Super Bowl XLV, making it not only the most-watched Super

Bowl in history, but also the most-watched program of any kind in

American television history.

In 2008, only 13,635,000 tuned in to

watch the World Series, in spite of the Tampa Bay Rays’

Cinderella-style finish.

Tampa Bay had not experienced a

winning season until that year, having finished in last place in the

previous season, and the Philadelphia Phillies had only won one

World Series ring in the team’s 125-year history.

Andrew Zimbalist, May the Best Team Win: BASEBALL, ECONOMICS, AND PUBLIC

POLICY 93 (2003).

The 2010 World

Series ratings tied an all-time low, with the average rating

Gabe Lacques, Cold April for Baseball: Six Stadiums See Worst Crowds Ever,

USA Today (Apr. 14, 2011, 4:26 PM),

http://content.usatoday.com/communities/dailypitch/post/2011/04/baseball-attendance-

april-six-teams-record-low/1.

Change in Baseball Attendance 2010 to 2011, Baseball-Reference,

http://www.baseball-reference.com/leagues/current_attendance.shtml.

Mark Sweeney, Super Bowl 2011 Draws Highest Ever Attendance for US TV

Show, The Guardian (Feb. 8, 2011, 7:55AM)

http://www.guardian.co.uk/media/2011/feb/08/super-bowl-highest-ever-audience. It

was the second year in a row that the Super Bowl broke viewing records.

Baseball Almanac, World Series Television Ratings, http://www.baseball-

almanac.com/ws/wstv.shtml (last visited Nov. 28, 2011). Compiled by Nielsen Media

Research.

2008 World Series, Baseball Almanac, http://www.baseball-

almanac.com/ws/yr2008ws.shtml.

2012] For the Love of the Game 181

declining 28 percent from the 2009 Series.

For the first time, a

regular-season National Football League (“NFL”) game drew more

viewers than a game of the World Series on the same day.

It may no longer be accurate to refer to baseball as

“America’s pastime,” considering the number of fans it has lost.

Bill Maher may be a comedian, but he understands that people

stop going to Pittsburgh Pirates games in May because “if you’re

not in the game, you become indifferent to the fate of the game.”

If teams stand no chance of winning, they have a hard time

motivating themselves. Green Bay, Wisconsin has a population of

about 100,000,

but their football team has as realistic a chance

of making it to the Super Bowl as any other team. Over 500,000

fans crowd into Lambeau Field each year during Green Bay’s

eight home games to cheer on the “Pack,”

while the Pittsburgh

Pirates only draw in an average of 1.5 million over an 82 game

season.

One glaring reason for this discrepancy in interest is that

football employs an equal opportunity model, while in baseball

every team must fight for its own survival. In three of the four

major professional sports – The National Football League,

National Basketball Association (“NBA”) and National Hockey

League (“NHL”) – franchises share revenue with players on a

percentage-based model.

Baseball Almanac, supra note 5. In 1978, over 44 million people watched the

World Series. The last time even 30 million viewers tuned in was 1992. Over the past

decade, World Series ratings have been deplorable.

Major League Baseball employs a

different approach, with each team largely keeping its own

revenue, with the “wealthy” franchises sharing only a small

CBS News, World Series Loses to NFL Game in TV Ratings (Nov. 1, 2010 12:57

PM), http://www.cbsnews.com/stories/2010/11/01/sportsline/main7011381.shtml.

Bill Maher, New Rule: Americans Must Realize What Makes NFL Football So

Great: Socialism, Huffington Post (Jan. 28, 2011, 5:45 PM),

http://www.huffingtonpost.com/bill-maher/new-rule-football-sociali_b_815673.html.

City Data, Green Bay, Wisconsin, http://www.city-data.com/city/Green-Bay-

Wisconsin.html.

NFL Attendance 2010, ESPN, http://espn.go.com/nfl/attendance/_/year/2010.

Pittsburgh Pirates Attendance Data, Baseball Almanac, http://www.baseball-

almanac.com/teams/pitatte.shtml.

Graydon Ebert & Eric Macramalla, A Primer on Revenue Sharing in the NHL,

MLB, NFL, & NBA, Offside Sports Law Blog (Sept. 29, 2010, 1:06 PM),

http://offsidesportsblog.blogspot.com/2010/09/part-2-in-series-of-comparing-cbas-

show.html.

182 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

percentage with the “poor” franchises.

This system has many

flaws, the most concerning being that the “poor” teams pocket the

money rather than utilizing it to acquire players.

Indeed, the

players’ union has complained that clubs have failed to use their

money appropriately.

In addition, baseball does not utilize a salary cap.

Major

League Baseball implements a luxury tax in which the league

“taxes” teams whose total payroll exceeds a certain threshold.

Unfortunately, the luxury tax has had little effect on leveling the

playing field for the thirty MLB teams.

For the foregoing reasons, fewer people are singing “Take Me

Out to the Ballgame” lately. This article presents two solutions—a

hard salary cap and increased revenue sharing—to baseball’s

competitive imbalance problem. This article seeks to demonstrate

that not only the game of baseball but also players, owners, and

organizations would benefit from these proposed structural

changes.

If a team (such as

Boston, New York, or another team with a high payroll) can afford

to pay one player an amount that equals some teams’ entire

payroll, the small luxury tax is but a drop in the proverbial

bucket.

This article, in Part I, explains that Major League Baseball

has a competitive balance problem. Part II offers some

conventional wisdom about salary caps and revenue sharing in

professional sports. Finally, Part III chronicles the history of

collective bargaining in Major League Baseball, and argues that it

is most beneficial for players to demand a hard salary cap and

Id.

Todd Wright, MLB Forcing Marlins to Spend Cash on Players, NBC Miami (Jan.

12, 2010, 8:30 PM), http://www.nbcmiami.com/news/local/Marlins-Forced-to-Spend-

Cash-81265972.html.

Philip Derstine, Is MLB Not Having a Salary Cap Fair?, Bleacher Report, (Jan.

28, 2009), http://bleacherreport.com/articles/116711-no-salary-cap-in-baseballfair.

Maury Brown, Correcting the Falsehood that MLB’s Luxury Tax is Part of

Revenue Sharing, The Biz of Baseball (Apr. 11, 2010 10:54 AM),

http://www.bizofbaseball.com (author profiles; then Maury Brown articles from staff).

Brandon Mitchell, From the MLB to the NBA: Major League Salary Problems,

Bleacher Report (Apr. 3, 2008), http://bleacherreport.com/articles/16076-from-the-mlb-

to-the-nba-major-league-salary-problems.

2012] For the Love of the Game 183

increased revenue sharing in the 2011 collective bargaining

agreement (“CBA”).

I. MAJOR LEAGUE BASEBALL’S COMPETITIVE BALANCE PROBLEM

If people don’t want to come out to the ballpark, how are you

going to stop them?

-- Yogi Berra

A Lack of Competitive Balance Means a Lack of Interest in the

Sport

As mentioned above, this year’s Super Bowl broke records

with an astonishing 111 million viewers, making it the most-

watched television broadcast of all time.

In fact, the last four

Super Bowls rank in the top five most-watched events in United

States television history.

By contrast, ratings for last year’s World Series between the

Texas Rangers and the San Francisco Giants tied an all-time low

at 8.4, clearly demonstrating baseball’s corresponding decline in

popularity.

The five lowest-rated World Series of all time have

occurred since 2005, with the 2010 All-Star Game ratings hitting a

record low as well.

Interest in baseball still persists, though, in the markets that

have high payroll (and consequently more successful) teams. The

best example of this may be the New York Yankees, whose payroll

far exceeds any other franchise.

Despite charging comparatively

high ticket prices, the Yankees sold a league-high three million

tickets prior to the start of the 2011 season.

David Bauder, Super Bowl Sets Records with 111M Viewers in US, Yahoo Sports

(Feb. 7, 2011), http://sports.yahoo.com/nfl/news?slug=txsuperbowl.

Consistently having

Id.

World Series ratings tie all-time low, ESPN (Nov. 2, 2010, 7:30 PM),

http://sports.espn.go.com/mlb/playoffs/2010/news/story?id=5757137.

Kurt Badenhausen, Baseball Opening Day Business Preview and Predictions,

Forbes (Mar. 30, 2011, 2:15 PM),

http://blogs.forbes.com/kurtbadenhausen/2011/03/30/baseball-opening-day-business-

preview-and-predictions/.

USA Today Salaries Databases, 2011 MLB Salaries by Team, USA Today (2011),

http://content.usatoday.com/sportsdata/baseball/mlb/salaries/team.

Id.

184 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

the highest payroll in baseball has clearly paid dividends on the

field for the Yankees, who have won twenty-seven World Series—

one-fourth of all MLB championships.

In 2011, the New York Yankees’ total payroll was $202

million; Philadelphia has the closest payroll with approximately

$173 million. At the bottom of the list are the Kansas City Royals

with about $36 million, and teams such as Pittsburgh, and San

Diego with $41-45 million in total payroll.

It is no surprise, then,

that Kansas City ranks 29 out of 30 in average attendance,

with

Pittsburgh close behind.

These statistics have demonstrated that, not surprisingly,

there is a strong correlation between high payrolls and success on

the playing field, which in turn correlates with fan interest.

While a few successful teams do enjoy success (and fan interest)

because of high payrolls, the league as a whole suffers, along with

the sport itself.

Len Coleman, the former president of the

National League, remarked: “The days of kids being born with a

glove next to their ear in the crib and boys playing catch in the

backyard by age three, those are over.”

From 2000 to 2009, the

number of kids aged 7 to 17 playing baseball fell 24%, and

enrollment in youth football has soared 21% over the same time

span, while ice hockey jumped 38%.

This lack of interest, in

turn, diminishes the talent pool in a way that, according to scouts,

could significantly affect the future quality of Major League

Baseball.

Economist Brad Humphreys explains,

Competitive balance is thought to be an important

determinant of demand for sporting events. Competitive

World Series History, Baseball Almanac http://www.baseball-

almanac.com/ws/wsmenu.shtml.

USA Today Salaries Databases, supra note 24.

Cleveland ranks last, averaging only about 1,000 fewer attendees than Kansas

City.

MLB Attendance Report, ESPN, http://espn.go.com/mlb/attendance.

See SCOTT ROSNER & KENNETH L. SHROPSHIRE, THE BUSINESS OF SPORTS (2004).

Matthew Futterman, Has Baseball’s Moment Passed? The Wall St. Journal (Mar.

11, 2011),

http://online.wsj.com/article/SB10001424052748703712504576232753156582750.html.

Id.

Id. (citing the National Sporting Goods Association).

Id.

2012] For the Love of the Game 185

balance reflects uncertainty about the outcomes of

professional sporting events. The conventional wisdom holds

that to induce fans to purchase tickets to a game or tune in to

a broadcast, there must be some uncertainty regarding the

outcome. Neale (1964) called this the League Standing Effect.

If a league lacks competitive balance, fan interest in the

weaker teams will fall and, eventually, fan interest in the

stronger teams will also decline. Thus, greater competitive

balance should lead to greater demand, other things held

equal. Quirk and Fort (1997) attribute the demise of the All

American Football Conference, which started play in 1946

and merged with the National Football Conference in late

1949, to a lack of competitive balance.

Thus, although a team such as the New York Yankees may

still be able to sell three million tickets prior to the start of the

season, even interest in the Yankees will eventually decline.

Other leagues, such as the NFL, NHL, and NBA, have

implemented a salary cap and revenue sharing in order to ensure

that teams can compete on equal ground.

Major League Baseball

has not taken the same approach; meanwhile, fan interest is on

the decline.

What a Lack of Parity Means for Players

A lack of competitive balance can jeopardize a sport such that

fans begin to lose interest. Payroll disparities not only cost fans

“the chance to see competitive teams matched up on the field but

also puts the home city in grave danger of losing its team to

another location through franchise free agency.”

Brad Humphreys, Alternative Measures of Competitive Balance in Sports

Leagues, 3 J. S

PORTS ECON. 133 (2002).

MLB

commissioner Bud Selig has remarked, “it makes no sense for

Id.

Ebert, supra note 13.

The Harris Poll, While Gap Narrows, Professional Football Retains Lead over

Baseball as Favorite Sport, 1 (Jan. 20, 2011),

http://www.harrisinteractive.com/vault/HI-Harris-Poll-Favorite-Sport-Football-2011-

01-20.pdf. (31% of Americans say football is their favorite sport, while only 17% chose

baseball, which had the greatest decline in interest).

PAUL C. WEILER, LEVELING THE PLAYING FIELD 304 (2000).

186 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

Major League Baseball to be in markets that generate insufficient

local revenues to justify the investment in the franchise.”

In the past, Major League Baseball has eliminated certain

teams who failed to generate sufficient revenue.

Though the

NFL eliminated 38 franchises before 1952, no team has folded

since.

Scott Rosner, author of The Business of Sports and two

publications concerning contraction in professional sports, cites

four possible reasons for contraction in Major League Baseball:

increased revenues, enhancing and reestablishing monopoly

power, improving competitive balance, and collective bargaining

leverage.

Whatever the reason for eliminating a team may be,

the result will be harmful to players. For example, contraction

may affect players’ salaries.

Furthermore, the contraction of two

teams would eliminate fifty players,

not to mention the minor

league players, executives, and more who would also be jobless.

Contraction forces players to relocate their families to other teams

who are willing to assume their contracts, be demoted to the

minor leagues, or end up jobless.

Currently, there are rumors of certain big-market MLB

teams hoping to eliminate the Oakland A’s and Tampa Bay Rays –

and not merely from the pennant race.

Bill Saporito, Baseball: Yer Out!, Time Magazine (Nov. 19, 2001),

http://www.time.com/time/magazine/article/0,9171,1001231,00.html.. Commissioner

Selig further explained that the two teams to be contracted historically failed to

generate sufficient revenue.

New York Yankees co-

chairman Hank Steinbrenner said, “At some point, if you don’t

want to worry about teams in minor markets, don’t put teams in

Scott R. Rosner, Squeeze Play: Analyzing Contraction in Professional Sports, 10

ILL. SPORTS & ENT. L.J. 29-33 (2003).

Id. at 33.

Id. at 37-41.

See Roger G. Noll, The Economics of Baseball Contraction, STAN. INST. FOR

ECON. POL’Y RES. 7-8 (2002). (noting proposal of contraction tied to players’ salaries).

Id.

Rosner, supra note 41, at 44.

Ken Rosenthal, Contraction’s Not the Answer for MLB, Fox Sports (2011),

http://msn.foxsports.com/mlb/story/oakland-as-tampa-bay-rays-need-to-relocate-or-face-

contraction-022211.

2012] For the Love of the Game 187

minor markets or leave teams in minor markets.”

The Rays ... have nowhere to go – no new ballpark, no new

market where they clearly would be better off. Making matters

more difficult: Bob Dupuy, the former baseball executive who

excelled at resolving ballpark and ownership issues, resigned last

September. The whole thing is a shame.

As baseball

analyst Ken Rosenthal points out,

Tampa stars Evan Longoria and David Price understand

what is at stake. Last year, the players publicly appealed to fans

for support.

Rosenthal also knows that the game depends on

each franchise being competitive: “Healthy franchises are in the

best interests of all parties, generating greater revenues, leaving

fewer teams to subsidize, raising player salaries.”

II. SALARY CAPS AND REVENUE SHARING

It is in the

players’ best interest to realize this as well.

Major League Baseball has not adopted the same approach to

ensuring parity as other leagues, such as the NFL, NHL, and

NBA. As explained below, the salary cap and revenue sharing are

two effective methods to maintain competitive balance among

teams.

Salary Caps as the Answer

In a salary cap system, there is a minimum and maximum

collective salary for each team.

Id. Steinbrenner was either referring to the contraction or relocation of small-

market teams. Many large-market executives are asking why they should bear the

burden of keeping struggling clubs afloat.

In all salary cap systems, there

must be a way to determine the salary floor (the minimum

Id.

David Brown, Tampa Bay Ray Stars Call Low Attendance at Home

“Embarrassing,” Big League Stew, Yahoo Sports Blog (2010),

http://sports.yahoo.com/mlb/blog/big_league_stew/post/Tampa-Bay-Rays-stars-call-low-

attendance-at-home?urn=mlb-272868.

Rosenthal, supra note 47.

Graydon Ebert, Part 3 in Series Comparing CBAs: How Does the Salary Cap

Work, Offside: A Sports Law Blog (2010),

http://offsidesportsblog.blogspot.com/2010/10/part-3-in-series-comparing-cbas-

how.html.

188 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

amount that must be spent on players) and the cap (the maximum

amount that may be spent).

In 2009, the final capped year under the CBA that recently

expired, the NFL had a maximum cap of $123 million per team,

with a salary floor of about $107 million.

Under the NFL “hard

cap,” first introduced in 1994, no team could spend a dollar over

the cap – the commissioner would not approve the contract.

Based on projections of shared revenue for the season, the salary

cap for 2010 constituted 57 percent of the projected shared

revenue amount.

The salary cap can never be less than in the

previous season, but the salary cap, when added to player

benefits, can never be more than 61.68 percent of shared

revenue.

The NBA, which was the first to introduce a salary cap for

the 1984-1985 season,

takes a different approach, operating a

“soft cap,” where teams can spend in excess of the salary cap in

certain situations.

Teams that spend over the cap (which teams

such as the Los Angeles Lakers and Dallas Mavericks frequently

do) are subject to a luxury tax. In 2009, the NBA set its salary cap

at 51 percent of projected shared revenue.

The cap for the 2010-

2011 season was set at $58 million.

Although the NHL calculates its salary cap in a different

manner, the number is still tied to revenue and the league still

employs a “hard cap.”

Id.

The NHL uses a slightly more complicated

NFL, Key Questions and Answers about the CBA (2010),

http://www.nfl.com/news/story?confirm=true&id=09000d5d815da1d2&template=with-

video-with-comments.

Ebert, supra note 52.

Id.

Id. The new deal reached by the players and the NFL in the fall of 2011 alters

this arrangement.

See Helmut Dietl et al., The Combined Effect of Salary Restrictions and Revenue

Sharing in Sports Leagues (forthcoming in Economic Inquiry), available at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1393407.

Ebert, supra note 52. One of the primary exceptions is the “Larry Bird” rule,

which allows teams to resign their free agents for amounts in excess of the salary cap.

Id.

CBS Sports, Salary Cap for Next Season set at $58 million (2010),

http://www.cbssports.com/nba/story/13612167/salary-cap-for-next-season-set-at-58-

million/rss.

Ebert, supra note 52.

2012] For the Love of the Game 189

formula, using a “growth factor” to account for the league’s

revenues growing every year. The NHL allows teams to spend ten

percent over the salary cap from the first of July until the

beginning of training camp, allowing for flexibility.

While in many industries, salary caps might be in violation of

antitrust laws, they are typically exempt from such laws when

they are the result of collective bargaining agreements.

effective salary cap promotes competitive balance by preventing

wealthy teams from acquiring all of the most talented (and

expensive) players. Thus, each club theoretically has the same

economic power to sign those talented players.

The salary cap

also serves to limit the cost of operating a team, which benefits

owners.

The salary cap has proven to be effective, particularly in

football.

One writer remarked, “there isn’t an NFL club now that

won’t try and sell its fans on the belief that when training camp

opens it, too, can finish on top.”

MLB teams have a harder time

selling that idea to fans because teams with higher payrolls in

baseball tend to make the playoffs and often win World Series

championships.

And “if there’s anything people hate more than a

losing team, it’s a team that wins all the time.”

Revenue Sharing as the Answer

“Economists are nearly unanimous in stating that the closer

to equality the level of on-field competition, the greater the overall

revenues for the league.”

Id.

The Eastern District of Pennsylvania

recently noted the consistency of the findings of these economists,

Dietl, supra note 58.

See id.

Id.

See Figure 1 (illustrating parity in the 2010 season).

Rick Maloney, Competitive Balance Keeps Football on Top, Business First (2002),

http://www.bizjournals.com/buffalo/stories/2002/02/11/newscolumn2.html.

Baseball Almanac, supra note 26.

David Jacobson, MLB’s Revenue-Sharing Formula, CBS Interactive Business

Network (2008), http://www.bnet.com/article/mlbs-revenue-sharing-formula/210897.

See Noll, supra note 44, at 122-23.

190 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

observing, “[v]irtually all commentators on this subject agree that

‘competitive balance’ is a desirable goal for a sports league.”

If their analysis is accurate, league attendance will be

substantially higher if many teams alternate in winning rather

than a few dominating.

In other words, parity breeds popularity

among fans. “Major League Baseball has a strong collective action

problem. In the absence of an explicit revenue sharing agreement,

each owner’s personal incentives lead him or her to improve his or

her own team regardless of the effect on competition.”

The “Partnership” Model

In the NFL, NBA, and NHL, the league divides its revenue

between teams and players using a “partnership” or “percentage-

based” model.

Players in these leagues receive a percentage of

the league’s total revenues, including ticket, concessions,

merchandise, and broadcast revenue.

This creates an

atmosphere of partnership between the league and the players

because the players have a monetary interest in the game’s

growth.

If player contract compensation exceeds the percentage of

shared revenue, the leagues still ensure that players receive the

stipulated amount owed under their contracts.

For example, in

the NBA, the league pays the union the difference, and the union

distributes the money; in the NFL, the league pays the deficit

directly to the players.

Philadelphia World Hockey Club, Inc. v. Philadelphia Hockey Club, Inc., 351 F.

Supp. 462, 486 (E.D. Pa. 1972). See also Mid-South Grizzlies v. N.F.L., 550 F.Supp.

558,568 (E.D. Pa. 1982) (“a franchise’s popularity is inextricably bound up with the

quality of its competition on the playing field and the resulting excitement and sense of

team loyalty”).

The NHL uses an escrow system, in

which players pay a percentage of their salaries from each

paycheck into an escrow fund. The league bases its salary cap on

Id.

Jeffrey A. Rosenthal, The Football Answer to the Baseball Problem: Can Revenue

Sharing Work? Seton Hall J. Sports L. 419, 428. The argument is that the league

suffers from competitive imbalance when an individual team profits.

Ebert, supra note 13.

Id.

2012] For the Love of the Game 191

projected revenue for the season, and if the league earns that

amount, the players receive with the deposited money.

Major League Baseball’s Current Model

Major League Baseball has not implemented the same type of

revenue sharing system.

Baseball teams earn the majority of

their revenue locally.

In 1999, a “blue ribbon” panel

commissioned by MLB found that “large and growing revenue

disparities exist and are causing problems of chronic competitive

imbalance. Year after year, too many clubs know in spring

training that they have no realistic prospect of reaching

postseason play.”

The panel reported that by 1999, the top seven

teams averaged more than double the revenues of the bottom

fourteen teams, and that in the late 1990s, none of the fourteen

teams in the bottom half of payroll spending won even one of the

158 postseason games played. Every World Series champion in the

five years studied was in the top seven in payroll spending.

Big-market teams increase their revenue even more with

local cable television contracts, such as the Yankees’ 1989 contract

that paid the team an average of $42 million per year.

In 1933,

broadcasting rights accounted for only 0.3 percent of total

revenues, rising to 6.7 percent in 1943, and by 1995, broadcasting

rights accounted for 44% of league revenues, totaling $775 million

in 1993—more than gate receipts.

Id.

Not only have broadcasting

fees risen sharply, but the disparities in local broadcasting

Jacobson, supra note 70.

Id.

Richard C. Levin et al., The Report of the Independent Members of the

Commissioner’s Blue Ribbon Panel on Baseball Economics (2000),

http://www.mlb.com/mlb/downloads/blue_ribbon.pdf.

LISA PIKE MASTERALEXIS & MARY A. HUMS, PRINCIPLES AND PRACTICE OF

SPORTS MANAGEMENT 404 (3d ed. 2009).

See Horowitz, Sports Broadcasting in Government and the Sports Business 357

(1974); Michael Ozanian, The $11 Billion Pastime, Financial World, May 10, 1994 at

50.

192 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

revenues between the top and bottom teams increased from $13

million in 1964 to $52.6 million in 1990.

To correct this problem, the blue ribbon panel suggested

significant increases in revenue sharing.

Under the current

CBA, all teams pay a mere 31% of their local revenues to the

league, splitting the total amount among all thirty teams.

One additional shortcoming of this limited revenue-sharing

model is the tendency of low-revenue teams not to use the

revenue-sharing money to increase payrolls.

Last year, in an

unprecedented move, MLB threatened the Florida Marlins with

legal action in order to force the team to use its receipts to

increase its payroll.

The team had spent the least money in

three of the previous four years despite having received the most

money from wealthier teams.

This may be related to the Marlins

preparing to open a new ballpark next year, but nonetheless, low

attendance has continued with the decision to have a lower

payroll.

Baseball has also implemented a “luxury tax” on the amount

that teams spend above a set payroll amount, which rises each

year.

Unfortunately, this attempt at curtailing payroll spending

has been fairly unsuccessful. The league sets the thresholds at

such a high amount that the luxury tax only regularly affects the

New York Yankees and Boston Red Sox.

See Andrew Zimbalist, Baseball and Billions 150 (1994) (observing that the ratio

of the top to bottom clubs in local media revenues increased from 5.3:1 in 1964 to 18.5:1

in 1990).

In 2008, the Yankees

Levin, supra note 84.

MLB Press Release, MLB, MLBPA Reach Five-Year Labor Accord (2006),

http://www.mlb.com/news/press_releases/press_release.jsp?ymd=20061024&content_id

=1722380&vkey=pr_mlb&fext=.jsp&c_id=mlb.

Jacobson, supra note 70.

Id.

ESPN, Marlins Pay Heed, Will Increase Payroll (2010),

http://sports.espn.go.com/mlb/news/story?id=4819982.

ESPN, MLB Attendance (2011), http://espn.go.com/mlb/attendance (the team

currently ranks 27 out of 30 in attendance, averaging just 17,912 per game in 2011).

Jacobson, supra note 70.

Maury Brown, Yankees, Red Sox Pay Luxury Tax in 2010, Biz of Baseball (2010),

http://www.bizofbaseball.com/index.php?option=com_content&view=article&id=4972:y

ankees-red-sox-pay-luxury-tax-in-2010&catid=30:mlb-news&Itemid=42.

2012] For the Love of the Game 193

paid the equivalent of the Florida Marlins’ entire payroll in luxury

taxes.

Economists point out that baseball’s attempts at achieving

competitive balance have not been successful: the Yankees’ payroll

spending rose from 1.86 times the MLB average in 2002 to 2.85

times the average in 2005.

The team’s top-paid player in 2008,

Alex Rodriguez, could have used his season’s salary to pay the

Marlins’ players that year and still walked away with six million

dollars.

Teams with below-average payroll have won their

divisions less than ten percent of the time over the past twenty

years.

III. IT IS IN THE PLAYERS’ BEST INTEREST TO USE THE

COLLECTIVE BARGAINING PROCESS TO ACHIEVE COMPETITIVE

BALANCE

This is an unusual year in sports, because the collective

bargaining agreements in basketball, football, and baseball have

or will all expire during the year.

100

Soon, MLB and the Major

League Baseball Players’ Association (“MLBPA”) will begin the

collective bargaining process in an attempt to sign a new

agreement before the current Collective Bargaining Agreement

(“CBA”) expires. In fact, formal bargaining sessions have already

commenced.

101

Jacobson, supra note 70.

As explained below, this article concludes that it

would be in the players’ best interest to demand a hard salary cap

and true revenue sharing, specifically with regard to local media

revenue, in the 2011 Collective Bargaining Agreement.

Id. (citing DAVID BERRI ET AL., THE WAGES OF WINS (2006)).

Id.

100

William B. Gould IV, Labor Issues in Professional Sports: The Upcoming

Negotiations in the NFL, NBA, and MLB 1 (2011), available at

http://blogs.law.stanford.edu/newsfeed/files/2011/01/Gould_Labor_Issues_in_Pro_Sport

s.pdf. The NFL had a lockout that lasted over four months before reaching a ten-year

agreement in August. MLB announced the details of a new CBA on November 22,

almost a month before the old deal expired. The NBA had a lockout that began in July

and lasted until a tentative deal was reached on November 26. Games are scheduled to

commence on Christmas day.

101

Baseball Union, Owners Start Bargaining, Associated Press

(2011),http://sportsillustrated.cnn.com/2011/baseball/mlb/wires/02/26/2010.ap.bbo.unio

n.weiner.1st.ld.writethru.0449/index.html .

194 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

The History of Collective Bargaining in Baseball

The MLBPA is the official bargaining representative for all

MLB players.

102

In 1968, the Major League Baseball Players Association

negotiated the first-ever Collective Bargaining Agreement

(CBA) in professional sports. It has evolved and strengthened

over the years with each generation of players, sometimes at

great personal sacrifice, ensuring the continuity of rights for

the next.

The official site of the MLBPA reads,

103

This first-ever CBA gave the players the right to have an

independent arbitrator from outside MLB to decide their

grievances with the owners.

104

It was not always easy for players

and teams to engage in the collective bargaining process.

105

The National Labor Relations Act (“NLRA”) controls union-

management relations in professional sports.

106

The NLRA, for

many years, did not offer protection to baseball, as the courts did

not find that baseball affected interstate commerce.

107

In 1969,

though, the National Labor Relations Board (“NLRB”) held in

American League of Professional Baseball Clubs

108

that baseball

did affects interstate commerce, and as a result, was subject to the

jurisdiction of the NLRB.

109

As a result, the players enjoy the

right to collective bargaining, self-organization and choice of

representation.

110

The downside to the collective bargaining process is the

likelihood of work stoppage where negotiation fails, with the

parties usually resorting to strikes or lockouts.

111

102

MLB Players, Frequently Asked Questions, http://mlb.mlb.com/pa/info/faq.jsp.

Since 1972, each

time a labor contract has expired, with the exception of the two

103

MLB Players, MLBPA Info, http://mlb.mlb.com/pa/info/cba.jsp.

104

MLB Players, supra note 102.

105

WALTER T. CHAMPION, JR., SPORTS LAW IN A NUTSHELL 39 (3d ed. 2005).

106

Id. See also 29 U.S.C.A. §§ 151-166.

107

See Federal Baseball Club v. National League, 259 U.S. 200 (1922).

108

Id. at 39-40. See also 180 N.L.R.B. 190 (1969).

109

Id. at 40.

110

Id.

111

See 29 U.S.C.A. §§ 151-166 (West 2011).

2012] For the Love of the Game 195

most recent CBAs, there has been a work stoppage, caused either

by a players’ strike or an owners’ lockout.

112

In 1972, the MLBPA demanded an increase in pensions, and

after a thirteen-day work stoppage, reached an accord with team

owners that raised pension contribution by about $500,000.

113

Players also gained the right to salary arbitration.

114

The 1981 players’ strike cancelled 712 games as team owners

lost the right to require direct compensation for the loss of free

agents.

115

In 1985, the owners agreed to contribute even more ($33

million) for the following three years to the pension fund and $39

million in 1989. The players’ minimum salary was also increased

by $20,000 that year.

116

In 1990, there was yet another increase in

pension fund contribution—$55 million annually—and the

minimum player salary, which rose to $100,000.

117

Then, in 1994, in a strike which lasted 232 days, the league

cancelled the postseason because of an ongoing labor dispute. A

judge ordered the players to play the 1995 and 1996 seasons under

the previous labor agreement. The parties signed a new

agreement in 1997, which contained the first luxury tax.

118

Over the course of these disputes, the MLBPA’s most

valuable acquisitions were (1) grievance arbitration in 1970, (2)

salary arbitration in 1971, and (3) free agency in 1975, which

ironically resulted from an arbitrator’s ruling.

119

The threat of contraction in 2002 also arose as part of a labor

dispute. The owners announced in 2001 that it would contract two

teams before the 2002 season. Owners claimed that they did not

need the MLBPA’s approval to contract two teams because the

labor contract had not yet expired, and the union filed a grievance

112

Labor Pains, SportsIllustrated.com,

http://sportsillustrated.cnn.com/baseball/news/2002/05/25/work_stopppages.

(documenting each of baseball’s eight work stoppages with type, length, games missed,

and key issues)

113

Baseball Strike is Settled; Season to Open Tomorrow, N.Y. Times, Apr. 14, 1972,

at 1, col. 6.

114

Labor Pains, supra note 112.

115

Id.

116

Id.

117

Id.

118

Id.

119

David Grabiner, Frequently Asked Questions About Baseball Labor Negotiations,

Remarque, http://remarque.org/~grabiner/laborfaq.html#A1.

196 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

challenging whether baseball could unilaterally decide to contract

without bargaining with the MLBPA over the decision. Under the

NLRA, employers must bargain with their employees’ union

before making changes to terms and conditions of employment—so

called “mandatory subjects of bargaining.”

120

Both parties asked

for an arbitrator to rule on the question of contractor, but the

arbitrator never issued a decision. Sensing that the owners and

union had tried to negotiate a compromise but failed, the

commissioner eventually retracted the decision to contract.

121

. On

August 30, 2002, MLB and the MLBPA reached a deal on a new

Basic Agreement, avoiding a work stoppage for the first time since

1970.

122

Also, baseball announced that it would not contract until

at least 2007.

123

The most recent agreement, signed in 2006 and set to expire

in December of this year, closely resembles the 2002-2006

agreement with regards to free agency, the amateur draft, and the

drug policy.

124

This CBA was quite unusual because the parties

negotiated it privately.

125

The owners had the right to contract

two teams in 2007 without the union filing a grievance, but there

was no talk of contraction in 2006, and the parties agreed that

contraction would not occur throughout the 2011 season.

126

Players Would Benefit from a Hard Salary Cap and Revenue

Sharing

The collective bargaining process provides the perfect

opportunity for players to demand that MLB institute a hard

salary cap and reform revenue sharing. The players’ union has

fought the idea of a salary cap due to fears that it would result in

a decrease in their salaries.

127

120

Josh Alloy, Addition by Contraction, in LEGAL ISSUES IN PROFESSIONAL

BASEBALL 65, 84 (Lewis Kurlantzick, ed., 2005).

Former MLB great Andy Van Slyke

121

Michael O’Keefe, Contraction Delayed Until ‘03; 30 Clubs Will Play This Year,

NYDailyNews (Feb. 6, 2002), http://articles.nydailynews.com/2002-02-

06/sports/18193758_1_contraction-union-chief-donald-fehr-major-league-baseball.

122

Alloy, supra note 120, at 97.

123

Id.

124

Grabiner, supra note 119.

125

Id.

126

Id.

127

Gould, supra note 100.

2012] For the Love of the Game 197

once said that there “will be peace in the Middle East before there

is a salary cap in baseball.”

128

It may be counterintuitive, or even

repulsive for players to consider a salary cap at first, but baseball

players share less in league revenue than players in the other

leagues.

129

The Yankees’ gross revenue is three times that of the

Marlins, even after the Yankees pay, and the Marlins receive,

revenue sharing.

130

A hard salary floor and cap, such as the one

the NFL has used, would ensure that all teams spend roughly the

same amount on payroll.

131

In 1994, baseball owners proposed a salary cap, but it sought

to promote competitive balance, but rather to reduce player

salaries.

132

Players should propose a cap in which the amount of salary

affected by the cap is less than the amount affected by the floor.

One commentator, for example, proposed that, based on 2010

revenues and salaries, a cap of $147 million and a floor of $62

million would affect no more than one-third of MLB teams.

That proposal would have reduced the amount paid to

players by about $60 million annually. This article does not

suggest that players accept a salary cap of this type, but rather a

cap that promotes greater competitive balance while also

rewarding the players.

133

fact, such a proposal would only affect the Yankees and the Red

Sox.

134

If the gap between $62 million and $147 million is too

great, that is where a more equal revenue sharing system would

function well.

135

128

Thinking Cap, Itsaboutthemoney.net,

http://itsaboutthemoney.net/archives/2010/05/10/thinking-cap-part-3-the-union/

129

Kristi Dosh, Why MLB Does Not Need a Salary Cap, It’s a Swing and a Miss (

May 3, 2010) http://www.itsaswingandamiss.com/2010/05/03/why-mlb-does-not-need-a-

salary-cap/.

130

Thinking Cap, Itsaboutthemoney.net,

http://itsaboutthemoney.net/archives/2010/05/03/thinking-cap-part-1-introduction/.

131

Id.

132

Id.

133

Thinking Cap, Itsaboutthemoney.net,

http://itsaboutthemoney.net/archives/2010/05/04/thinking-cap-part-2-the-

numbers/comment-page-1/#comment-1450.

134

Id.

135

Id.

198 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

Most teams are unable to afford paying “Yankee prices”

136

order to sign talent, and the Yankees only can have twenty-five

players on their active roster. Many baseball analysts have

pointed out that over the last decade, baseball players’ salaries

have actually been declining.

137

NFL, NBA, and NHL players

receive a greater percentage of the revenues earned by their

leagues than baseball players do, and this is in part because the

salary caps in those leagues force owners to pay a higher

percentage of revenues as salaries.

138

“In other sports, salary caps

have been designed to win the (grudging) support of the players,

with the result that these caps boost player salaries.”

139

Baseball

analyst Maury Brown even recommends that baseball owners

abandon their support of salary caps due to their salary-

enhancing effects:

140

“[e]ven from the point of view of the players,

establishing payroll standards might well increase rather than

decrease the total amount spent by the league on salaries.”

141

In fact, both players and owners have profited under the

NFL’s most recent collective bargaining agreement, which was an

extension of the original CBA signed in 1993.

142

The 1993

agreement instituted the salary cap and more than 15 years of

labor peace in the NFL.

143

Since 1999, the average franchise value

has risen by 171 percent, with 19 of the 32 franchises valued over

$1 billion, according to Forbes’s annual valuations.

144

136

Will Leitch, Why Ryan Howard is More Expensive than Mark Teixeira, New York

Magazine (April 27, 2010, 12:00 PM),

http://nymag.com/daily/sports/2010/04/why_ryan_howard_is_more_expens.html.

In 2010, the

average value of a MLB franchise was $491 million—half that of

137

See Andrew Zimbalist, Reflections on Salary Shares and Salary Caps, Journal of

Sports Economics (Apr. 1, 2010).

138

Id.

139

Thinking Cap, supra note 128.

140

Id.

141

Weiler, supra note 39, at 191.

142

David Madland, The NFL’s Win-Win Labor Agreement, American Progress

Action (Sept. 9, 2010),

http://www.americanprogressaction.org/issues/2010/09/nfl_labor_agreement.html. See

also Figure 2 (graph illustrating the rise in median salary and average value of NFL

franchises).

143

Id.

144

Id. See also Figure 3 (graph illustrating the average value of professional sports

franchises from 2001 to 2010).

2012] For the Love of the Game 199

the average NFL team.

145

The Pittsburgh Pirates, the least

valuable baseball franchise, was worth $289 million in 2010. By

contrast, the least valuable NFL franchise, the Jacksonville

Jaguars, was worth $725 million.

146

Owners are not reaping the

benefits to the exclusion of the players, though. Median NFL

player salaries rose 9.4 percent between 2006 and 2009 (team

values rose 16.2 percent over the same period).

147

And from 2000

to 2010, the median NFL player salary increased by 79 percent,

even during a time of economic recession.

148

The NFL has demonstrated that the collective bargaining

process can create benefits for both players and owners. Because

MLB and the players have not utilized the bargaining process in

the manner that the NFL has, and have not instituted a salary

cap and a strong revenue sharing system, the league has not

prospered as greatly as the NFL.

149

“Through collective

bargaining agreements and strong league institutions, the NFL

boasts a system that creates wealth for all of its owners and

players. The institutional models of Major League Baseball . . . do

not produce anything rivaling the broad-based prosperity the NFL

creates.”

150

Teams have unsuccessfully attempted to take matters into

their own hands to remedy the problem. Take the 2009 Baltimore

Orioles, for example. In September of that year, the team offered

tickets at the stellar price of only one dollar, yet attendance barely

improved.

151

Not surprisingly, the team’s win-loss record in 2009

was 64-98.

152

Conversely, as of August 2011, the World Series champion

San Francisco Giants increased attendance by nearly 5,000 per

game, while the American League champion Texas Rangers had

145

Id.

146

Id.

147

Id.

148

Id.

149

Id.

150

Id. The institutional model of Major League Baseball is the strong union, strong

top-team, weak-league model.

151

Neil de Mausse, Plenty of Good Seats Still Available,: The Collapse of the Sports

Ticket Bubble, Slate (Aug. 4, 2011, 10:06 AM),

http://www.slate.com/id/2300802/pagenum/all/#p2.

152

2009 Baltimore Orioles: Batting, Pitching, & Fielding Statistics,

BaseballReference.com, http://www.baseball-reference.com/teams/BAL/2009.shtml.

200 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

its attendance rise by more than 8,000 fans per game. Eighteen of

the remaining 28 teams have seen their attendance decline.

153

Note that while some baseball teams are unable to practically give

away tickets, an event like the Super Bowl incites thousands of

fans to pay $200 for tickets to watch the game on screens outside

the stadium. And when those tickets sell out, fans are willing to

purchase them for double their original price on websites such as

StubHub.

154

Baseball journalist Neil deMause observes,

All in all, while it is a great time to find bargains

when looking for tickets to a baseball game, this fortune will only

endure for as long as the franchise does.

Unlike musicians, sports teams compete on the field for

both wins and players. When the Eagles (not the

Philadelphia ones) cancel tour dates, they don’t have to

worry about another band snapping up Joe Walsh as a free

agent. In the sports realm—not counting the NFL,

whose

outrageously huge TV contracts

, split evenly among its 32

teams, has effectively made it into a television show with a

sideline in ticket sales—a more pronounced revenue split

can be catastrophic for low-revenue teams, since

somewhere in the neighborhood of 30 to 40 percent of

revenue comes from ticket sales.

155

Some argue that revenue sharing causes teams to have

“incentive problems,” because large markets guarantee many

teams profits.

156

Gerald Scully

157

estimates that the Yankees

would still post profits, even assuming a .500 record.

158

153

de Mausse, supra note 151.

Revenue

sharing, however, could actually increase incentives to win. If

teams would agree to share fixed local television revenues (which

are determined by population), but allow home teams to retain

most of their gate receipts, teams would have a strong incentive to

154

Id.

155

Id.

156

Rosenthal, supra note 74, at 433.

157

Gerald Scully conducted a study, which correlated salary with winning

percentage. See Scully, The Business of Major League Baseball (1989).

158

In 1991, however, small-market teams were able to bring in more fans than even

the New York Mets and Yankees because of their team performance.

2012] For the Love of the Game 201

perform.

159

“If all clubs receive the same amount of TV revenue,

fan attendance at home games will in part determine which teams

have the highest net profit.”

160

Fans become discouraged when franchises struggle to field a

winning team only to have star players leave because the team

lacks the ability to pay them. Players rarely spend their entire

careers with one team anymore.

161

Chipper Jones of the Atlanta

Braves observed, “[s]ome guys don’t want to stay in the same

place, they want to go to the highest bidder, they want to go to a

new place for the most money.”

162

On May 7, 2010, Jones played

his 2,191

game, moving him to second place on the all-time list of

games played for one manager.

163

A look at team rosters reveals that many teams are without a

veteran over 30 who has spent his entire career with the same

team, much less with the same manager. Small-market teams

cannot afford to resign their star players. Revenue sharing would

increase the number of franchise players like Jones, because

players would be encouraged to stay with the team if they could

receive nearly equal wages in every city. “Lower player turnover

and the ability of teams to sustain quality teams should increase

fan attendance. Players will be seen less as mercenaries and more

as local heroes.”

164

Therefore, it is in the best interests of baseball to distribute

income equally among the teams to improve the standard of living

for most baseball players and to increase the value of MLB

159

Rosenthal, supra note 74, at 431. Both Rosenthal and Gerald Scully propose

awarding a substantial prize to winning teams to overcome the disincentive of equal

revenue sharing that some claim exists.

160

Henderson and Bruggink, Will Running Baseball as a Business Ruin the Game?,

28 Challenge 53, 56-57 (March-April 1985).

161

Tim Kurkjian, Once a Brave, Always a Brave, ESPN (June 5, 2010),

http://sports.espn.go.com/mlb/draft2010/columns/story?columnist=kurkjian_tim&id=52

49761. Chipper Jones of the Atlanta Braves was drafted as the number one overall pick

in 1990, and he has never left the team. Until 2010, when Bobby Cox retired as

manager of the Braves, Jones had played his entire career for one manager, something

that might never happen again in baseball history. It was not without sacrifice that

Jones accomplished this feat, however. The star has restructured his contract with the

Braves in the past in order to sign good players that the team required.

162

Id.

163

Id.

164

Rosenthal, supra note 74, at 432.

202 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1

franchises.

165

The best way to implement a revenue sharing plan

would be to do so along with a salary cap and floor.

166

This would

stabilize the finances of all teams, rather than depress player’s

salaries. Though players may be philosophically opposed to a

salary cap, they could use the collective bargaining process to

make other demands from the owners in turn for accepting the

salary cap. “Remember that the Players Association was also a

long-time opponent of testing players for performance-enhancing

drugs. But once it became clear that baseball needed drug testing,

the union . . . went along.”

167

Under revenue sharing, revenues

would rise because more fans would become interested in the

competition, thus increasing attendance in small-market cities in

particular. “Making the game a better one means that we fans will

spend even more money to watch and enjoy it – thus increasing

the total size of the pie to be divided up among players and

owners.”

168

CONCLUSION

Baseball is poised for a catastrophe. And it might not be far

off.

-- Former MLB Commissioner Fay Vincent

America’s pastime is on its way to becoming the forgotten

pastime. Fans enjoy competition, not predictability, in sports.

When, as last year, a regular season NFL game’s viewership far

exceeds that of game four of the Fall Classic, baseball clearly has a

problem. This article offers two proposals— a salary cap and

revenue sharing—that other leagues use to maintain a

competitive balance.

The implementation of revenue sharing will allow the league

to more easily institute a salary cap, because they will receive

comparable profits. The result is that teams will have a roughly

equal chance of acquiring talent and winning games. Players, too,

165

Thinking Cap, supra note 128. See also Madland, supra note 142.

166

Players who are concerned about the effects of a salary cap will feel protected by

the salary floor.

167

Thinking Cap, supra note 128.

168

Weiler, supra note 39, at 219.

2012] For the Love of the Game 203

will be happier, as they will have more freedom to move from team

to team while receiving higher salaries as they do so. Players will

also have the potential to spend an entire career with a team if

they choose. This is the reason players should break from their

tradition of rejecting a salary cap, and instead demand one in the

2011 CBA.

169

All in all, this article has sought to achieve several purposes.

First, the article emphasized the competitive balance problem in

Major League Baseball. Second, this article examined two

methods, revenue sharing and salary caps, that other leagues use

to achieve parity among teams. Finally, the article observed the

history of collective bargaining in baseball, and explained that the

collective bargaining process is the most effective means for

players to save the game of baseball and improve their own

standards of living.

169

The details of the new five-year agreement reached by the players and MLB

were released on Tuesday, November 22, 2011. See MLB Press Release (2011)

http://www.mlb.com/news/article.jsp?ymd=20111122&content_id=26025138&vkey=pr_

mlb&c_id=mlb. The CBA mandates that players attend the All-Star Game, adds

replay, and expands playoffs, but failed to adequately address the competitive balance

problem. MLB will give teams Signing Bonus Pools, and will penalize teams by taxing

them or denying them draft picks for spending over their assigned pool. Since the draft

is where a lot of small-market teams find their talent, this will have a negative impact

on those teams and MLB as a whole. Teams in the largest fifteen markets will not

receive revenue-sharing welfare, and the luxury tax thresholds will not change over the

next two years. The agreement changes baseball in many ways, but probably not for

the better.

204 MISSISSIPPI SPORTS LAW REVIEW [VOL. 1:1