Baseball's Collective Action Problem

The following article is a guest contribution by written by Evan Zepfel.  Zepfel is a Portfolio Management Analyst at PAAMCO, is a graduate of Harvard College, was a member of Harvard’s Varsity Water Polo team and served a sports editor for The Harvard Crimson.

Alex Rodriguez will appeal his 211 game suspension.

On Monday, Major League Baseball announced an extended suspension for Alex Rodriguez in accordance with the Joint Drug Prevention and Treatment Program (JDA) and the 2012-2016 Basic Agreement (CBA).  The suspension is scheduled to last through the 2014 season (including playoffs), meaning that Rodriguez will be ineligible to compete for more than 200 games and lose over $30 million in salary if the suspension is upheld in the appeals process.  However, MLB based the suspension partially on violations of MLB’s drug policy, giving Rodriguez the ability to appeal the suspension and making him eligible to play until the appeals process is complete.

MLB’s JDA specifically delimits penalties related to usage of prohibited substances.  In this case, Rodriguez’s suspension is clearly greater than the pre-determined suspension for the use of a prohibited substance.  According to section 7(A) of the JDA, a player who “tests positive for a Performance Enhancing Substance, or otherwise violates the Program through the use or possession of a Performance Enhancing Substance” for the first time will be subject to a 50 game suspension. 

Union Professional, Chief Economist, and Baseball Executive: How Marvin Miller Used the Law to Forever Change the Face of baseball forever

On Tuesday, the first chief of the Major League Baseball Players Association Marvin Miller passed away at the age of 95. It is without question that Miller not only changed the game of baseball economics, but had a profound impact on every professional sport and their players.
Friend of the blog and current American University law student Jennifer Simile was kind enough to forward us her term paper on Miller and his impact on the game. It has never felt more appropriate to share this insight with our readers so everyone who loves the game of baseball today can better understand how we’ve come to this point in time.

Baseball management has had a profound impact on organized baseball throughout history.  There have been successes and failures alike on the part of management but each decision, for better or for worse, brought the game one step closer to what it is today.  The baseball executive who had the most influence on organized baseball was Marvin Miller. Without Miller, players’ rights and bank accounts would have greatly suffered.  Organized baseball depends on the players, but the game also hinges on the direction that baseball executives provide.  Miller utilized his education and the law to direct baseball players to make enormous advances.

In order to appreciate how important Marvin Miller was to the game of baseball, it should be mentioned how baseball was before Miller made an impact.  Players typically needed to have a second job during baseball season and worked fulltime during the offseason just to support their families because their salaries were so low.  Players had little to no ability to negotiate for more money, different contracts, or even better working conditions.  One example that illustrates how truly difficult it could be for players to make ends meet was the Black Socks scandal which took place in 1919.  Eight members of the White Sox were permanently banned from baseball for intentionally losing games and allowing the Reds to win the World Series.  The players were motivated by a dislike of team owner Charles Comiskey who was known for severely underpaying his players.  Because of baseball’s reserve clause, owners like Comiskey could mistreat his players and make big profits.  The players worked out the plan to throw games in order to make money by betting on the Reds during the series.  Even with the lifetime bans, many fans view Comiskey as the true villain of the scandal because of the way he treated his players.  After Marvin Miller took control of the MLBPA, players would never again have to stoop to such lows simply in order to put food on the table and clothing on their children’s backs.