The structure of baseball, by the approach of the 1994 season, was one that pitted three parties squarely against one another, with the players’ union, small market teams and large market teams all entering into a dispute with contrary interests.Two parties which had an interest in the proceedings, but with pointedly antithetical abilities to impact the direction thereof, were the fans and cable television broadcasters.
While the latter were immensely influential on the drive of large and small market teams to move the league toward adopting a salary cap to help bring star-quality players to marquis advertising venues, the former had no voice in the proceedings which would eventually deprive them of the 1994 World Series.Essentially, the strike occurred because owners, on both the small and large market sides, who viewed free agency as a destructive force, which had presaged the massive inflation of player salaries, argued that they were losing money on account of diminished returns. “Despite revenues of $1.8 billion, the owners calculated that Major League Baseball lost at least $150 million in 1993. Owners complained that 14 of 28 teams were losing money (despite contrary accounting records ) due to soaring player salaries , shrinking television and gate revenue, and increased competition from other forms of entertainment like professional basketball.” (11)Major League Baseball’s Players’ Union, however, is the most powerful and best-earning labor union in America.
Its leverage is so significant, as 1994’s breakdown would illustrate, because of the irreplaceable standard of talent which the league’s legacy demands. Herein is an indication of the fundamental role which the fans do play in contending with the assignment of economic values in baseball.While free agency represented the threat, and indeed sparked a manifestation of drastically increased player salaries, with its first year, 1976, seeing an across the boards 50% increase in player salaries. Such a rise, unheard of in any other form of labor arbitration, is based on a value ultimately created by the fans, who for the first decade and a half of free agency, rated its attractiveness by increasing the MLB’s overall returns on ticket sales, concessions and merchandise.For a duration of 234 days, the strike swallowed the end of the 1994 season, became the subject of a presidentially appointed mediation and ultimately came to an end without any rectification of the major grievances which drove a rift through the respective parties. The league continued without a salary cap under the previous, discontenting collective bargaining agreement.
League revenue sharing solutions proposed by the owners would not be adopted either.But the instability in the relationship between owners and players that led to this fundamental and damaging breakdown is not simply built on old tradition of securities mismanagement. It has also been exacerbated by the more recent influence that cable companies levy over team owners, with the contracts that teams acquire thereto, by 1993 constituting the single largest factor in profitability.
It is assessed that at this time, only a quarter of the money which all Major League Baseball teams earned from such contracts was designated to paying player salaries. And it is no coincidence that the labor arbitration breakdown that led to a player strike in 1994 came one year after the sunset of an unsuccessful contract between MLB and the CBS and ESPN Networks. When the value of broadcast rights diminished significantly across the boards, both small and large market owners turned their attention on the inflated salaries of their players.