3 Men Forged 2 Decades of Labor Peace
Sometime early in Bud Selig‘s celebration of baseball’s new collective bargaining agreement on Wednesday, he wondered if the two sides had needed to go through the pain of 1994 in order to achieve the peaceful — and very profitable — coexistence they enjoy today. It was almost certainly meant as a rhetorical question. Selig answered with a casual “perhaps.” But there is nothing rhetorical about the question. And the answer to it is a most emphatic yes.
Because it took the pain of that experience to teach Bud Selig, Donald Fehr and George Steinbrenner — the three men most responsible for baseball as we now know it — that they had to work together instead of continuing to pull the game apart. It was the partnership of these three men, forged in baseball’s worst moment, that took the game from the turmoil of the early ’90s to what will be 21 years of uninterrupted prosperity when the new five-year agreement ends in 2016.
Just how far did this partnership propel baseball? Consider these two elements in the sport’s newest agreement:
One calls for the realignment of the game into two 15-team leagues, an idea first put on the table by the union more than 10 years ago. Not only did management adopt an idea developed by the players, it gave the union the credit it deserved. Gone is the acrimony that held back the game for so long. Indeed, both sides praised the other so often at Wednesday’s news conference, one almost wondered if that was really Selig sitting in the middle of the dais.
Another is the change that ties revenue sharing to the luxury tax. This works two ways. One, by the end of the agreement, the 15 teams in the game’s largest markets are disqualified from receiving revenue sharing funds. That encourages underperforming franchises to increase revenues — in theory by fielding a better team — instead of living on welfare, a position long held by the union.
Two, the money these teams once received is tossed into a pot and split among the 12 to 14 teams that annually contribute to the $400 million-plus revenue sharing pool — but only if they’re under the luxury tax threshold. This creates a double incentive for the big spenders to hold down payroll: avoiding the tax and getting a revenue sharing rebate.
With the tax threshold rising to $189 million in the last three years of the deal, even the Yankees — whose payroll now hovers around $200 million — may be tempted to cut spending. And that’s something baseball has long desired. So the union got what it wanted and management got what it wanted — on the same issue.
How did that happen?
For starters, Selig, whose single greatest achievement as baseball’s commissioner is unifying the owners under the revenue-sharing banner, learned to stop treating Fehr, the leader of the players union, as an existential threat. Make no mistake, Selig’s decision in 1994 to end one of the game’s extraordinary seasons and shutter a World Series was all about driving Fehr from the game and breaking the union. For the game’s new commissioner, there could be no other way.
Back then, the only means for a small-market owner to survive — especially the one in Milwaukee, the game’s smallest market — was to socialize the game’s revenues in the manner of the N.F.L. And the only way baseball’s richest owners — especially the one in the Bronx — would agree to that sort of revenue sharing was to force a salary cap on their players. In effect, Selig promised to pay back a George Steinbrenner with the money he took from the pockets of Fehr’s clients.
When Sonia Sotomayor, then a Federal District Court judge, told Selig that his strategy wouldn’t fly, he was forced to change tactics. Instead of trying to crush the union, Selig hired Randy Levine, who at the time was New York City labor commissioner, to work with Fehr and devise a system they could all accept. The result wasn’t perfect, but it was a start. And if it wasn’t an end to the hostilities, it was a start to the kind of trust that the two sides needed to develop.
And they have.
The experience taught Fehr that to forgive and forget was not only noble, but necessary if he truly wanted the game to grow. It’s doubtful that Fehr and the union staff — including his former assistant Michael Weiner, the union’s current executive director — ever learned to respect Selig. Not after Selig, then head of the owners’ labor committee, thanked the union for giving up a year of salary arbitration in 1985 by helping to shut down the free-agent market for the next three years. Not even the $280 million the owners paid for collusion could completely erase that.
But Fehr did learn how to keep his personal feelings from getting in the way of making a sensible deal. And how to finally shrug off the sharp criticism of Marvin Miller, the players union’s godfather, who treated any union giveback — from salary arbitration to random drug testing — as an act of betrayal. Now Weiner, who spent 20 years working under Fehr, has done the same.
Steinbrenner’s lesson might have been the costliest, at least in dollars and cents. Between revenue sharing and luxury-tax payments, Steinbrenner’s Yankees have contributed upwards of $1.5 billion to the rest of Major League Baseball. Steinbrenner threatened to file a lawsuit against his peers when they came together on the first revenue-sharing agreement. Then he became the only owner to vote against the 2002 agreement, which took an even bigger bite out of his profits.
But rather than cut back, Steinbrenner learned how to push his people hard enough to not only survive the system, but also build one of the most valuable franchises in sports. How many sports teams have the worldwide name recognition of Apple, Google or Facebook?
Though only Selig is still active in the game, the best testament to the three men’s legacy of cooperation is not what baseball’s labor negotiators just did, but what they did not do. While their counterparts in football and basketball mirrored most of corporate America, using today’s dismal economic conditions as an excuse to gouge their workers at the bargaining table, M.L.B. and its union quietly put together a deal that kept both sides happy.
Who would have thought that possible in 1994?
(Editor’s Note: This article originally appeared in the New York Times and has been reprinted with the author’s permission).