Archives: Major League Baseball (MLB)

On March 30th, the Chicago Cubs assigned wunderkind slugger Kris Bryant to its minor league affiliate in Iowa, rather than bringing him north from spring training for MLB’s opening day.    Bryant – the consensus number one prospect in professional baseball – completely annihilated Cactus League pitching this spring, with a league-leading 9 homers in 40 at-bats and a slash line of .425/.477/1.175.    Bryant’s assignment to Iowa was met with strong reaction from the Major League Baseball Players Association which issued the following statements via Twitter:

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The implication from the players association and others is that the Cubs had an ulterior motive for sending Bryant to the minor leagues, i.e. due to a longstanding wrinkle in the collective bargaining agreement, delaying Bryant’s promotion to the major leagues for the Cubs’ first 8 games of the season  – indeed, the Cubs called up Bryant to the majors on April 17th (and he has continued crushing the ball to the tune of a .409/.552/.591 slash line) – allows the Cubs to keep Bryant’s contractual rights for an additional season.  Instead of being able to declare free agency after the 2020 season, Bryant will become free-agent eligible no sooner than after the 2021 season.  Essentially, by delaying Bryant’s promotion, the Cubs traded eight games of Bryant in 2015 for an entire season of Bryant in 2021.

Both the Cubs and certain pundits have defended Bryant’s non-promotion as justifiable for the purpose of Bryant’s development, such as to improve his defensive skills.  However, it is unclear precisely what defensive skills (or other parts of his game) Bryant was made to “work on” between opening day and April 17.

Bryant is not the first young prospect to be held in the minors by his club for the alleged purpose of delaying the player’s service time.  Teams have been accused of doing this in order to either delay a player’s free agency or arbitration eligibility, and occasionally players have filed grievances against their clubs that have done so.  While transcripts of these grievances are not made public, one can assume that players have accused MLB clubs – who are given a great deal of deference for promotion/demotion decisions in both the CBA and standard player contracts – of violating the implied covenant of good faith and fair dealing in the standard player contract.   But while allegations of “service-time games” against clubs are not novel, it is difficult to recall a minor league player who was held back after so convincingly dominating every level of minor league competition and then statistically outperforming – arguably – every other participant in major league spring training.

I will not speculate here on the likelihood of success if the MLBPA or Bryant’s agent (Scott Boras) files a grievance on behalf of Bryant.  Other authors have so speculated.  The question I pose is whether there is a viable alternative system for determining free agency that can prevent conflicts like this from reoccurring, without causing unintended negative consequences.

Copyright:  / 123RF Stock Photo
Copyright: / 123RF Stock Photo

Regardless of whether one sympathizes with the Cubs (and MLB) or Bryant (and the MLBPA) on this issue, it is easy to find fault with the current linkage between service time and free agency.  Regardless of whether you believe the Cubs in this instance, this linkage clearly provides clubs with iniquitous incentives.  Clubs are incentivized to potentially hold back even the most “ready” of their best young players – something not seen in the other major professional U.S. team sports.  And thus, aspiring major league players, MLB fans, and potentially the clubs (e.g. if they lose games they could have won with the rookie player) suffer.

So I’d like to propose a solution for MLB and the MLBPA to kick around before the next round of negotiations: end (or substantially limit) the linkage between service time and free agency.  Right now, players are eligible for free agency after amassing 6 years of service time.  This is the case regardless of whether they are 25 or 35 or 45 years old.  Why not instead allow all players – regardless of service time – to file for free agency upon reaching a certain age?

This plan is inherently neither management-friendly nor union-friendly.  Who is favored under such a rule would depend on the “free agent age” that the sides negotiate.  For example, it would likely be quite league-friendly to say that all players become eligible for free agency at age 35, and it would likely be quite player-friendly for the CBA to provide that all players become eligible for free agency at 25.  Somewhere in the middle, however, there is a “fair” age for free agency that both sides can live with.  [n.b. however, there may be some not-so-obvious advantages for MLB clubs if the “free agent age” were not too high, particularly for clubs who have the financial wherewithal to frequently dip into the free agent market.  While some MLB clubs would be primarily concerned with losing team control over players at too young an age, others would prefer if most of the available high-end free agents were not on the “wrong side of 30.”         The thinking here is that if the entire supply of free agents consists of players in their decline years, teams would artificially drive up the market by signing “bad contracts” to older players, expecting them to repeat their peak years]

Clearly, details would need to be hashed out.  For example, this system would probably have to be phased in over time (e.g. becoming effective as to all players who sign their first-year player contract in or after 2015).  Moreover, either side might object on the grounds that this would flood the market with free agents.  Perhaps, if an excess of free agents were a concern, there could be some nominal service time quota to prevent “late bloomers” who have one great season from immediately hitting free agency before their clubs lose contractual control.

Regardless, even if the parties to collective bargaining hate my idea, I am hopeful that the interested parties will immediately begin brainstorming for creative alternatives to the current, system for determining free agency eligibility. While on the macro-level, the game is flourishing financially and player salaries are at an all-time high, I would argue that has happened in spite of – not because of – the current system of free agency. Now that we are well into a 20+ year period of relative baseball labor peace, there is no need to maintain vestiges of former CBAs that needlessly put clubs at odds with their players and fans, as I believe this system does.

Monmouth Park Racetrack
Copyright: andykazie / 123RF Stock Photo

Today is a crucial day for New Jersey in its mission to legalize sports betting, as it will argue its position on the issue against attorneys for the four major American professional sports leagues and the NCAA this morning in the Third Circuit Court of Appeals in Philadelphia, Pennsylvania.

Attorney Theodore B. Olson, who represents New Jersey in this action, plans to argue that U.S. District Court Judge Michael Shipp erred in ruling that that New Jersey’s partial repeal of its prohibition against sports wagering violates the federal Professional and Amateur Sports Protection Act of 1992 (“PAPSA”).  New Jersey will likely also assert that the professional sports leagues have “unclean hands” due to their partnerships with fantasy sports websites.

While it is true that some sports leagues have recently embraced pay-fantasy sports websites, the leagues remain steadfast in their quest to thwart New Jersey’s legalization efforts.  They believe that PAPSA clearly prohibits the 46 states not exempted from the act’s application from legalizing sports betting in any fashion.

The Third Circuit has previously ruled in favor of the sports leagues, but the Court’s prior Opinion potentially provided the state with a loophole – it acknowledged that even under PAPSA, states have “much room . . . to make their own policy” and can establish their own parameters of sports betting prohibitions.  New Jersey will assuredly use that language in support of its argument today.

Led by Governor Chris Christie, New Jersey has been undeterred by many unfavorable court decisions in the two-plus years since the sports leagues initially sued to prevent the state from commencing sports betting.  While nearly all casinos and racetracks in New Jersey have seen revenues decrease each of the last few years, the state and its casino/racetrack owners believe that sports betting could reverse their fortunes and bring in millions of dollars yearly.

Whether the Third Circuit will continue to affirm the sports leagues’ position that PAPSA prevents New Jersey from having authority to legalize sports betting remains to be seen. What is certain is that today’s oral argument and the resulting decision is extremely crucial in determining the future of potential sports betting in New Jersey, in addition to many other states that may wish to follow its lead.

Source: Pixabay
Source: Pixabay

On October 24, 2014, Aaron Senne and several former minor league baseball players filed a consolidated amended class action complaint against the Office of the Commissioner of Major League Baseball, former Commissioner Bud Selig himself, and the 30 major league clubs.  The amended complaint alleges in its introductory paragraphs that the defendants “openly collude on the working conditions for the development of [their] chief commodity: young baseball players.”

Despite this introduction, and unlike prior and pending cases brought by professional baseball players, the 100-page amended complaint in Senne does not make claims for antitrust violations.  The complaint instead consists of claims under the federal Fair Labor Standards Act, state wage-and-hour laws, state unfair-business-practice laws, and equitable state theories such as quantum meruit.  In short, the players allege that they are paid significantly less than what is fair and/or what is required by laws governing minimum wages and overtime.

The lawsuit is generating publicity not merely because of its subject matter, but also because of the media relations efforts of one of the plaintiff’s lead attorneys, Garret Broshuis, a 33-year old former minor leaguer and recent (2013) law school graduate.  In addition to the sports-related periodicals one would expect to cover this case, Broshuis has recently been featured in the Village Voice, the Daily Beast, and  Mother Jones – publications with decidedly non-jock audiences that are not known for their coverage of either sports or the business thereof.  Broshuis explains in these features that minor leaguers typically earn $1,000 or less per month, and then are expected to purchase their own equipment and pay for their own lodging.  [side note: The New York Mets have generated some recent negative press for requiring their minor leaguers to pay for use of Mets training facilities in the offseason – something which their co-defendants would privately concede is not helpful to MLB’s p.r. efforts in justifying the defendants’ stance in this Senne case].  Defendants and their proponents argue that the minor league experience is not run-of-the-mill employment but is instead designed to be a training ground for the major leagues; in short, minor leaguers are provided with more than what can be measured in their paychecks.

While opinions abound about the plaintiffs’ likelihood of success, it would seem that the federal claim, at least, will turn on the applicability of the exemptions in the Fair Labor Standards Act that are geared toward certain types of seasonal employees.  Plaintiffs are aware of these exemptions but argue that they are inapplicable.

The case is Senne et al v. Office of the Commissioner of Baseball, et al, Case Number 3:2014cv00608, United States District Court for the Northern District of California (San Francisco).  Motions to dismiss and to transfer venue are pending.  To the extent that the case is not cut short by dispositive motions or a settlement, an 8-week trial is set for early 2017.

Cuba and baseball
Copyright: / 123RF Stock Photo

Luis Tiant and Tony Pérez were two wonderful Cuban baseball players. The way I heard the story told, Pérez was asked about Luis. “When I was a boy growing up in Cuba, Luis Tiant was 35. Now I am 35 and he is still 35. America is a wonderful country!”

As profiled on the BBC, Alan Schwarz mused about what the new diplomatic outreach means for baseball. It likely will loosen up the tiger hold on great players, who now have to defect, but there is no guarantee. Right now, you need permission to leave the island and there is no waiver for baseball players. Cuba has a law against departing; if you leave, you are not allowed to return. Here is hoping that some fan in government negotiates this out for the benefit of baseball.

Monmouth Park Racetrack
Copyright: andykazie / 123RF Stock Photo

On Friday, Judge Michael Shipp granted the NCAA and four major professional sports leagues a permanent injunction to prevent New Jersey casinos and racetracks from offering sports betting.  The decision was unsurprising, but still extremely disappointing, to New Jersey state officials who have been attempting to establish legalized, regulated sports betting in the state for over three years.

New Jersey should, and it appears will, exercise any and all legal options it has in fighting to establish sports betting in the state.  State Senator Raymond Lesniak, the leader of New Jersey’s campaign to legalize sports betting, told ESPN on Friday that New Jersey would appeal Friday’s decision to the Third Circuit Court of Appeals this week.

Regardless of the outcome of the appeal, hopefully other leagues will follow the lead of National Basketball Association Commissioner Adam Silver.  Eight days before Judge Shipp’s ruling, Silver, whose league ironically is a party fighting against sports betting in New Jersey, wrote a heavily-discussed op-ed in the New York Times calling for Congress to “adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards.”

Silver acknowledged that sports betting in the United States currently operates mainly through “illicit bookmaking operations and shady offshore websites.”  Why not legalize and regulate the industry so governments and legitimate businesses can be the beneficiaries instead of underground bookmakers and offshore websites?

If the NCAA and other professional sports leagues adopt Silver’s position, Congress would be more inclined to pass legislation revoking the outdated Professional and Amateur Sports Protection Act.  The benefits of an industry that will continue to thrive whether or not it is operating legally should shift from underground bookmakers and offshore businesses to governments and legitimate businesses.

 

As featured in the Economist, major league sports have major league headaches softened by insurance for catastrophic injuries. The New York Times this past weekend, regaled us with how the Yankees decisions are muted by the ongoing Alex Rodriguez contract, which is starting to appear outsized for what is now an aging superstar. A certain proportion of injury risk is laid off on insurers, willing to take a gamble on the health of a major league player.

The soft and squishy part of these stories is likely played out in very private….what is an injury? Did the athlete take a dive? What is career ending? A surprising few of these matters end up in court, with the only one I can remember being the all-flop Brian Bosworth, who was never in the pros that which he was at Oklahoma. Maybe teams should start putting the names of their insurers on the backs of their players to defray the cost, but it is quoted in the Economist as only being four percent, which is a reasonable bet for the owners.

 

By Jeffrey S. Kravitz, Esq.

Marvin Miller died and there will be obituaries in most media outlets for this pioneer. His contribution to the profession was summed up by former All-Star third baseman Ron Cey, who I heard speak the other night. Cey is now an executive with the Dodgers and the discussion was about the how the game had changed over the course of the years. His immediate response was "Thank God for Curt Flood," the courageous player who challenged the baseball reserve clause. Before the legal challenge, players basically had to either accept management’s contract or withhold their labor.

Well, without Marvin Miller, there would have been no Curt Flood. As head of the players’ union, he directed and supported that fight, resulting in what are now record breaking salaries. What also needs to be pointed out is that baseball itself has prospered, growing from a $10 billion business in 1995 to a gross receipts business of over $30 billion last year. Miller had what has been described as the demeanor of an accountant and that in part allowed the American public to view him as a sane representative of (high priced) labor, rather than as a bomb thrower. The greatest player….obviously Jackie Robinson, but how many kids have baseball cards with union leaders on them?  

Saw a terrific movie over the weekend called "Rice Field of Dreams", about the national baseball team in Cambodia. Part "Bad News Bears", part "The Caine Mutiny", the film chronicles the training and international debut of a team where there was none before.

Why is it great?

Each of the recruits brings boundless enthusiasm to the sport that they had never played before. Their organizing coach is a cook in a Japanese restaurant in Alabama (can’t make this stuff up folks). The professional staff was sent over by MLB Asia to train the rookies. Predictably, they get crushed but live to fight again. Non-predictably, we learn a lot about training people, human emotion, ego, all good stuff. 

 

From the outside, all law firms look alike. From the inside, the ones that work are the ones where people make investment in each other teach skills and perform for the benefit of the clients. I commend this film to every lawyer/manager in terms of what works and does not work. Suffice it to say that the investment pays dividends in both sports and law.

At the end of last month, Kelly Phillips Erb posted an article on Forbes.com about a great night of MLB play as the regular season drew to an end (including the Rays big comeback against those Yankees). Perhaps more importantly to you gamblers out there, Erb put her readers on notice of the requirement to report your winnings from betting on sports games for tax purposes, “even if it comes from your neighbor or office pool” (leave it up to the IRS to take the fun out of betting on sports games).  Erb even identified the forms necessary to fill out to report the winnings as well as those to claim your losses. This is great advice for the casual gambler who doesn’t want to get caught up in any trouble for some innocent fun.  Like the phrase goes, “Better safe than sorry.” You never know what can of worms might be opened up by some innocent, casual sports gambling.  Though not necessarily tax-related, think back to Rick Neuheisel’s neighborhood basketball gambling pool that not only violated NCAA rules but also led to a whole slew of related headaches. As my father used to say, “You can do things the hard way or the easy way.” I was an adult before I realized that the easy way was always his way!