Collusion and the no-risk free agents of 1988

The power brokers in baseball have long sought ways to control spending. Ten years into the free agency era in 1985, ownership thought it figured out a way to keep player salaries in check while destroying free agency. It culminated in a series of messy showdowns between the players and ownership that took almost 10 years to resolve.

This is the story of the first collusion grievance and the class of seven no-risk free agents it created.

The genesis of collusion

From September to December in 1985, baseball executives and owners held a series of meetings where they discussed exercising “fiscal responsibility” as it pertained to free agency and the awarding of players long term contracts. In particular, it participants at these meetings noted that a player’s performance seemed to drop after signing a long term deal or they would suffer injuries that would force them out of the game, while still earning their salary.

Of course, research has been done that refutes a players performance as it relates to their contract situation. And injuries happen—it’s the nature of the game. But often times perception outweighs reality. Baseball owners felt player salaries were escalating out of control and they set about attacking the roots of the problem.

The idea of teams avoiding the free agent market began to take shape at a meeting in St. Louis in October of 1985. Lee MacPhail, the then Director of the Player Relations Committee, urged the owners not to be swayed by pressure from fans and the media to spend money on player contracts. He asked that teams “exercise more self-discipline,” and “resist the temptation to give in to unreasonable demands of experienced marginal players.” MacPhail continued, “We must stop daydreaming that one free agent signing will bring a pennant.”

At the general manager’s meeting the following month, Commissioner Peter Ueberroth followed up MacPhail’s comments when told the assembled that signing players to long-term contracts was “dumb.”

Then at the Winter Meetings in San Diego that winter, the idea of “fiscal responsibility” was preached to ownership. A list of the 62 players who filed for free agency was circulated to all teams and a message was sent to avoid the free agent market until a player was “released” by their former club, meaning a team would have to make it public that a player no longer fit in their plans. If all teams participated in the plan, the free agent market would no longer be free, but it would be controlled by the teams.

The message was received. Not a single offer was tendered to a free agent from a rival team.

I’ll see you in court

The problem was, the actions of the owners and management were prohibited by the collective bargaining agreement. Article 18H of the agreement covers individual rights and states, “Players shall not act in concert with other players and clubs shall not act in concert with other clubs.”

With players facing a dearth of offers, by January the free agent market was at a standstill. Although they had no way of knowing about the specific discussions among the owners at the time, reaction from the players association was swift. In February of 1986, Don Fehr, the executive director of the association, filed a grievance charging the owners violated the collective bargaining agreement by acting in collusion. The case was assigned to Thomas Roberts, baseball’s impartial arbitrator.

The owners argued that what happened in the winter between the 1985 and 1986 seasons was simply the evolution of a more rational free agent market. They maintained there was not a concerted effort among teams to restrict player movement and that each team individually came to a “rational conclusion” that they should practice a form of fiscal responsibility.

The players association disagreed. They argued that the owners essentially formed a “boycott” of the market with the intent to destroy free agency. They also contended that teams wouldn’t voluntarily turn away from free agency unless they were certain all other teams would do the same.

The hearing over the grievance took 11 months and was not without controversy. At the same time Thomas was presiding over the collusion hearing, he was making a ruling in another case. In that grievance, pertaining to drug testing, Thomas ruled teams couldn’t negotiate individual drug testing clauses for their players. After his ruling in the drug case, Thomas was fired by the owners. The players union argued his removal as baseball’s independent arbitrator was an attempt by the owners to subvert the collusion case. He was subsequently reinstated to his post through another arbitrator.

Kirk Gibson: the star no one wanted

The Gibson case was the one that drew the most attention throughout the entire process and was highlighted by Thomas in his finding.

Gibson was the premier free agent on the market after the 1985 season. The 28-year-old star of the Detroit Tigers, his 1985 season had been the best of his career. A complete package of power and speed, Gibson missed joining the 30/30 club by a single home run. His 301 total bases was the sixth highest total in the AL and his .882 OPS ranked him seventh. Gibson made $685,000 that season and was looking for a big payday, as he was about to appear on the open market for the first time in his career.

At the 1985 World Series, reporters asked Royals general manager John Schuerholz about needs for the 1986 season. “We need a slugger. Somebody who can be a real cleanup hitter for us,” Schuerholz told reporters. A reporter mentioned Gibson as a good fit for Kansas City and the Royals GM, knowing he couldn’t comment or else he would violate baseball’s tampering rules, smiled.

It was true, the Royals were among the teams that could have used Gibson. They won the World Championship in 1985 after winning 91 games in the regular season using a collection of right fielders including Darryl Motley, Pat Sheridan, Omar Moreno and Dane Iorg. That season, their primary cleanup hitter was 39-year-old DH Hal McRae, who was breaking down with injuries and hit .259/.349/.450 with 14 home runs. Signing Gibson would have provided the Royals stability both in the lineup and in the field and would have given them a great shot at repeating in 1986.

The Royals aggressively courted Gibson that winter. They actively sought out Gibson’s agent to open negotiations and even hosted him on a hunting trip. But suddenly, their interest cooled and the Royals announced they would not be signing Gibson, or any free agent for that matter.

The Royals weren’t the only team to back away. The Yankees, who also had interest—not to mention ample cash—suddenly decided not to pursue the right fielder.

Gibson, the best player available on the free agent market, did not receive a single offer from any team except the Tigers. He re-signed with Detroit for three years and a total of $4 million.

The verdict

On Sept. 21, 1987, Roberts ruled the owners violated the collective bargaining agreement by acting in collusion to restrict the free market.

Aside from the fact the owner’s plan was ill conceived, a large part of their undoing was fact they went too far in restricting their offers. In his finding, Roberts wrote the players, “had a value at some price and yet no offers were advanced.” (The emphasis was Roberts’.) Perhaps if a few players had received offers and signed for other teams, the owners could have gotten away with their plan, at least for a time. But they overreached, drew attention to their actions, and were found guilty by an independent arbitrator.

The lack of offers was highlighted in his report where Roberts found that after the 1984 season, 16 teams signed free agents who played for other teams the previous year. But of 29 free agents on the open market after the 1985 season, all 29 signed with their former clubs. And of those players, only Carlton Fisk received what was called a “bona fide offer” from a team other than his previous employer. Fisk, seeking stability, re-signed with the White Sox for two years at a total of $1.8 million.

No-risk free agents

By January of 1988, only 14 players of the initial free agent class of 62 were still under contract to teams. Roberts granted no-risk free agency to seven: Gibson, Fisk, Tom Brookens, Joe Niekro, Juan Beniquez, Butch Wynegar and Donnie Moore. The remaining seven were not granted free agency because they had re-entered the free agency pool since the winter of 1985.

The no-risk free agency was truly a unique opportunity for the seven. Granted Jan. 22, 1988, it allowed the players to negotiate with teams for a period of about a month, until March 1, while still remaining under contract to their current team. If the players found the offers on the open market to be undesirable, they could remain with their current team under the terms of their current contract.

With seven new free agents on the market, the owners found themselves in a precarious situation. There was another collusion case (from 1986) still pending and another one (1987) yet to be filed. If the owners reversed their previous course and aggressively pursued Gibson, Fisk and the others, it would be seen as a sign that the owners had in fact been guilty of colluding to damage the free agent market. On the other hand, if they chose not to court the new free agents, it could be perceived that the owners did not get the message handed down by the arbitrator and monetary award to the players effected, which was yet to be ruled upon, would be harsh.

Luckily for ownership, there was already a strong market for Gibson. While his production declined slightly in the two seasons after 1985, he was still one of the best outfielders in the game. From 1986 to 1987, he averaged 26 home runs and hit .273/.372/.490. At the winter meetings in December of 1987, both the Dodgers and the Yankees had approached the Tigers about a trade for the right fielder. The Yankees were offering Dave Winfield while the Dodgers dangled Pedro Guerrero. The Tigers favored the Dodgers’ offer but trade talks had stalled because of the pending ruling.

Of course, the rest has become part of baseball lore. After signing a three-year deal with the Dodgers worth a total of $4.5 million, Gibson hit .290/.377/.483 and led Los Angeles to the World Series for the first time since 1981 and was named the 1988 NL MVP. Oh, he also hit one of baseball’s signature home runs in the 1988 World Series.

The Other Six

Of the seven no-risk free agents, only Gibson shifted teams.

Brookens was the only other of the seven to directly benefit from the ruling making him a free agent. Due to make $350,000 in 1988, he remained with the Tigers after they decided to extend his contract for the 1989 season at an additional $475,000. He was traded to the New York Yankees for Charlie Hudson in March of 1989 and finished his career a year later with Cleveland.

Fisk was the only one of the seven who signed a two-year deal after the 1985 season. (The others signed for three years.) Fisk had recently signed a one-year deal for $700,000 with the White Sox before the ruling was issued, and turned down an offer from the Kansas City Royals to remain in Chicago under his new contract. He played for the White Sox until his release at age 45 in 1993.

Niekro opted to remain with the Minnesota Twins. The 43-year-old knuckleballer was in the final year of a three-year contract and was due $800,000 for 1988. He appeared in only five games for the Twins, throwing 11.2 innings and had an ERA of 10.03 at the time of his release in May of 1988. He retired shortly after his release.

Moore was coming off of elbow surgery to remove a bone spur and stayed with the California Angels for the final year of a three-year contract that would pay him $1 million. He appeared in 27 games for the Angels and had a 4.91 ERA and four saves before his release in August of 1988. He never played in the majors again.

Wynegar remained with the Angels for the final year of a three year contract that would pay him $733,000. He appeared in 27 games for the Angels in 1988, hitting .255/.338/.418. The 32-year-old Wynegar was released by California at the conclusion of the 1988 season and never played in the majors again.

Beniquez remained with the Toronto Blue Jays at a salary of $400,000. The 38-year-old appeared in 27 games, mostly as a DH, and hit .293/.373/.379 before being released in May. He retired shortly after his release.

Postscript

After ruling in favor of the players and granting the seven players another chance at free agency, Roberts awarded monetary damages to the players whose 1986 seasons were impacted by collusion. Based on three different methods of calculating the players’ salary shortfall, Roberts decided on an amount totaling $10,528,086.71 to be paid out to 139 players who were eligible for free agency after the 1985 season or who were eligible for salary arbitration for the 1986 season.

After issuing the penalties, Roberts was once again fired by the owners.

There were two more collusion grievances filed by the players association. The second collusion case was for the class of 1986 free agents which included Lance Parrish and Tim Raines, while the third collusion case was filed on behalf of the free agents of 1987 which included Andre Dawson and Jack Morris. The players won both cases.

The owners ultimately agreed to pay the players a total of $280 million in damages covering the three years of collusion. The distribution of the money was supervised by Roberts, and by the time the final payment was mailed in 1994, the total outlay to the players (which included interest) came to $434 million.

This winter, free agents signed contracts totaling more than $1 billion.

Roberts passed away last week at his home in California. He was 84.

References & Resources
The archives of the were an invaluable resource as well as the late Doug Pappas’ salary database.

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