ITS HISTORY AND ITS EFFECT ON THE GAME
In the United States, professional baseball has had a hallowed position. It has been glorified by the fans and public at large, and protected by the Congress and the Courts. Yet, it has a dark side, too. It has survived strikes, scandals, the Great Depression, and two world wars. In more recent years, players and owners have been embroiled in a contract dispute. Baseball has suffered a serious blow to its reputation because both players and owners seem to be motivated by greed. Baseball will no doubt survive this latest challenge, but the effects of baseball's exempt status will have profound effects for years to come.
What follows is a discussion of the historical background of baseball's exempt status and of the reserve clause. Discussion then turns to the watershed year 1976, in which the Major League Baseball Players Association successfully eliminated the reserve system, and thereby re-defined baseball owners' assertion of baseball's exempt status.
Exempt status refers to baseball owners' claims that they are exempt from antitrust laws. (Their rationale is explained in the ensuing pages.) The reserve clause refers actually to the renewal clause in players' contracts. This clause allows the team to renew the player's contract for the next season at a salary fixed by the club, within certain restrictions. According to Hill and Spellman, "once a player was signed by a club, his services became the sole property of that club for his entire stay in organized baseball, unless his contract was sold or traded to another club" (Hill & Spellman 2). Other than to play for the team that signed them (or be traded), their only other choice was not to play at all. Free agency refers to the player's right, as a result of their 1976 agreement, to enter their names in the reentry draft, and sign, as a free agent, with any team willing to pay for their services.
Before free agency,...