Baseball: Salary Cap and Free Agency

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  • Topic: Major League Baseball, Salary cap, Major League Baseball Players Association
  • Pages : 8 (2287 words )
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  • Published : January 18, 2013
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Running head: BARGAINING STRATEGY IN MAJOR LEAGUE BASEBALL

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Bargaining Strategy in Major League Baseball Michael D. Lavespere Amberton University

BARGAINING STRATEGY IN MAJOR LEAGUE BASEBALL

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Table of Contents
Amberton University...................................................................................................1 Table of Contents....................................................................................................... 2 Major Developments of Labor-Management Relations in Baseball.............................3 Methods...................................................................................................................... 5 What is Free Agency?..............................................................................................5 The Demise of the Reserve Clause and the Rise of Free Agency............................5 Salary Cap...............................................................................................................6 Historical Wounds and Lingering Issues for the Upcoming Negotiations ................6 Luxury Tax and the Salary Cap................................................................................7 Union Weapons for the 2006 Negotiations..............................................................7 Distributive Bargaining vs. Integrative Bargaining..................................................8 Union Top Priority....................................................................................................9 Conclusion.................................................................................................................. 9 References................................................................................................................11

BARGAINING STRATEGY IN MAJOR LEAGUE BASEBALL

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Major Developments of Labor-Management Relations in Baseball Major League Baseball (MLB) has a long history of negotiations between players and owners dating back to 1968 with the first successful bargaining agreement to increase the minimum salary for players. The Major League Baseball Players Association (MLBPA) was created in 1953 by the players to advocate for a better pension fund and by 1968 owners formed the Major League Player Relations Committee (PRC) to counter the growing strength of the MLBPA. Many player unions have formed and failed over the preceding years, but it was apparent that the MLBPA was a serious threat to the owners. The 2nd Basic Agreement emerged two years later in 1970, which established the right for binding impartial arbitration. This laid the foundation for today’s player compensations system (Rosner and Shropshire, 2004). In 1972, the first players strike occurred for only 13 days due to disagreements over pension contributions while negotiation the 3rd Basic Agreement. It was obvious that Major League Baseball was going to have many battles ahead. With owners instilling a “reserve clause” early in baseball history to prevent players from becoming free agents, the 4th Basic Agreement was a monumental win for the MLBPA who successfully abolished this century old passage. The ability of free agency rights for players brought in the 5th and 6th Basic Agreements to negotiate issues around compensations for teams that lost players due to free agencies and pension contributions. Regrettably, both Basic Agreements were not reached until after player strikes occurred. This represents a pivotal point in the ongoing disputes between ownership and players in that fans are growing weary of the regular stoppages—a potential demotion of power for both MLBPA and PRC.

BARGAINING STRATEGY IN MAJOR LEAGUE BASEBALL

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The early 90’s brought the lowest point in baseball history with a 232 day strike and the cancelation of the World Series because of failed negotiations in the 7th Basic Agreement. The PRC was intensely lobbying for revenue sharing among owners and salary caps. ESPN.com...
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