Summer 1996: The MacPhail Report of 1946

Like the rest of America, Organized Baseball experienced sweeping economic and social change after World War II. Overnight the number of minor leagues jumped from twelve to 42. The White Sox, who operated no farm teams in 1945, had seventeen in 1946. The majors adopted a new bonus rule, seeking to deter expensive bidding wars for young prospects by mandating that any player signed for a bonus of $6,000 or more could not be optioned or sent to the minors without clearing irrevocable waivers. The Yankees inaugurated the luxury-box era by creating a Stadium Club: at a cost of $600 for a four-seat box, fans could enjoy a private lounge, bar and restaurant, as well as priority rights for tickets to postseason games, pro and college football and championship boxing.

But three areas dominated Organized Baseball's thinking: race, unionization and the Mexican League. Checkbooks in hand, the Pasquel brothers dangled huge sums to entice major leaguers south of the border. Robert Murphy's fledgling American Baseball Guild sought to unionize those who remained, demanding salary arbitration, a $6,500 minimum salary and a requirement that players sold to another team receive 50% of the purchase price. Meanwhile in Brooklyn, Branch Rickey's signing of Jackie Robinson to a contract with Montreal of the International League threatened the majors' 60-year-old "gentleman's" agreement barring blacks.

The majors appointed a six-member Major League Committee to study these and other issues. The Committee included both league presidents, Will Harridge and Ford Frick, along with owners Phil Wrigley, Tom Yawkey and Sam Breadon, and Larry MacPhail, operator of the Yankees. Under MacPhail's leadership, the Committee met seven times in July and August 1946 before reporting to the owners at the August 27, 1946 owners' meeting. Recognizing the explosive nature of the report, MLB took great pains to keep its contents secret, asking the recipients to destroy their copies. Even the existence of the Committee report did not become public knowledge for five years, until a Congressional committee uncovered a copy. Excerpts then appeared in the October 24, 1951 Sporting News, and then-Commissioner Chandler's copy is quoted extensively in Murray Polner's 1982 biography of Branch Rickey.

Organizational Inadequacies. The report condemned Organized Baseball's outmoded management structure. "Professional baseball has not attempted survey or analysis of its administration set-up for 35 years. The Major League Agreement has been in effect for 35 years, the National Association agreement for 45 yerars, without any material revision to meet changing conditions."

More specifically, "League presidents have little actual responsibility and authority for anything except employment and assignment of umpires and control of players. The Advisory Council, whose responsibility or authority is not defined in the rules, has never met, and might as well not have existed. Boards of directors of the leagues are rotating honorary appointments. Club owners, in whom all legislative authority is properly vested, meet generally once a year. . . . League meetings, lasting a day or so, have been aptly described as `town meetings.' Minor league conventions are apt to be little more than political log-rolling contests."

Notwithstanding this condemnation from within, the majors only made matters worse. The only central authority, Commissioner Happy Chandler, antagonized many owners by acting like a CEO. He was replaced by Ford Frick, who aggressively avoided any sign of leadership for 14 years. Frick once congratulated himself for completing the American League's annual meeting in only seven minutes -- symptomatic of the hands-off style which prompted Bill Veeck to suggest that Frick title his autobiography Armageddon Is a League Matter. More recently, after briefly giving Peter Ueberroth the power to save them from themselves, the owners have tied their own hands by requiring a 3/4 majority for important decisions such as revenue sharing and a labor agreement, thereby assuring that they can't even formulate their own position without six months of internal infighting.

Labor Issues. Unionization efforts forced the owners to act: they established the first player pension, adopted a $5,000 minimum salary and a 25% limit on annual salary reductions, and agreed to pay moving expenses and $25/week spring training expenses ("Murphy money"). Yet the MacPhail Report warned that Robert Murphy's attempt to unionize professional baseball players "would have been successful if he had started with minor league players."

The Mexican League threat was not so easily addressed, for it implicated the fundamental issue of clubs' right to control player contracts in perpetuity. The MacPhail Report admitted: "In the well-considered opinion of counsel for both major leagues, the present reserve clause could not be enforced in an equity court in a suit for specific performance, nor as the basis for a restraining order to prevent a player from playing elsewhere, or to prevent outsiders from inducing a player to breach his contract." In other words, the reserve clause didn't bind players at all! When baseball executives were questioned on this point during the 1951 Congressional hearings, they disavowed the report. NL lawyer Louis Carroll testified that the report was merely a draft, subsequently altered because it contained legal opinions that "we did not think were accurate and should not be contained at all in a report of that character." After all, if that report became public, players might think they should have the same right as other employees to switch jobs when their contract expired...

Unsurprisingly, despite Carroll's disavowal the owners rewrote the standard player contract after the 1946 season to address just these issues. During the AL-NL and Federal League wars, courts had routinely held player contracts unenforceable for lack of mutuality: the player was bound to the club for life, while the club could release the player at any time, for any reason, and owe only 10 days' pay. The revised contract responded to these decisions by eliminating the old 10-day clause. Instead players released for injury were entitled to their full salary for the contract period, while those released for lack of skill received 30 days' pay plus travel expenses home. Reinforcing the clubs' claim for injunctive relief, a new paragraph 4(a) of the revised contract required the player to warrant that he had exceptional and unique skills; that the club would suffer irreparable injury if he breached the contract; and that if he breached, the club would be entitled to enjoin him from playing for any other team for its duration.

The new contract also modified the language dealing with renewal of unsigned players. The original contract bluntly asserted club authority: if the parties couldn't agree on a salary for the upcoming season, "the player will accept such salary rate as the club may fix, or else will not play baseball otherwise than for the club, or for an assignee thereof." The revised contract allowed the club to renew it "by written notice...for the period of one year on the same terms, except that the amount payable to the Player shall be such as the Club shall fix," subject to a 25% limitation on salary cuts. Another paragraph stated that the renewal rights "have been taken into consideration in determining the amount payable" under the contract. Thereafter, the clubs contended that renewal "on the same terms" created another right of renewal the following season, thus perpetuating a lifetime reserve clause. Thirty years later arbitrator Peter Seitz disagreed: his decision that the reserve clause was not self-perpetuating created the free-agent era.

Race. With Jackie Robinson already tearing up the International League, Organized Baseball launched every tired, circular weapon in its arsenal to defend the color line.

Baseball is being pressured by meddling publicity hounds who don't care about blacks: "Certain groups in this country including political and social-minded drumbeaters, are conducting pressure campaigns in an attempt to force major league clubs to sign Negro players. Members of these groups are not primarily interested in Professional Baseball. They are not campaigning to provide a better opportunity for thousands of Negro boys who want to play baseball. . . . They know little about baseball -- and nothing about the business end of its operation. They single out Professional Baseball for attack because it offers a good publicity medium."

Signing a few black players won't solve anything because most Negro Leaguers aren't qualified for the majors: "Jobs for half a dozen good Negro players now employed in the Negro Leagues are relatively unim-portant. Signing a few Negro players for the major leagues would be a gesture -- but it would contribute little or nothing towards a solution of the real problem."

Negro Leaguers can't play in the majors because they haven't played in the minors: "A major league player must have something besides great natural ability. He must possess the technique, the coordination, the competitive attitude, and the discipline, which is usually acquired only after years of seasoning in the minor leagues. The minor league experience of players on the major league rosters, for instance, averages 7 years. The young Negro player never has had a good chance in baseball. Comparatively few good young Negro players are being developed. This is the reason there are not more players who meet major league standards in the Negro Leagues."

Club owners had to respect Negro League contracts: "They do not sign, and cannot properly sign, players under contract to Negro clubs. This is not racial discrimination. It's simply respecting the contractual relationship between the Negro leagues and their players." The report conveniently ignored the options of signing black players before they entered the Negro Leagues or after their contracts expired -- and once the color line was broken, many clubs disregarded Negro League contracts, realizing that as a political matter, Negro League owners couldn't let themselves be perceived as blocking their players' path to the majors.

Almost as an afterthought came the real reasons. Many teams profited from segregation: "The Negro leagues rent their parks in many cities from clubs in Organized Baseball. Many major and minor league clubs derive substantial revenue from these rentals. . . . Club owners in the major leagues are reluctant to give up revenues amounting to hundreds of thousands of dollars every year. They naturally want the Negro leagues to continue." And black players would attract black fans, whose presence might drive away more desirable white patrons: "a situation might be presented, if Negroes participate in Major League games, in which the preponderance of Negro attendance in parks such as the Yankee Stadium, the Polo Grounds, and Comiskey Park could conceivably threaten the value of Major League franchises owned by these clubs."

This section of the MacPhail Report closed with a thinly veiled warning to Rickey and the Dodgers: "There are many factors in this problem and many difficulties which will have to be solved before any generally satisfactory solution can be worked out. The individual action of any one Club may exert tremendous pressures upon the whole structure of Professional Baseball, and could conceivably result in lessening the value of several major league franchises." But the Dodgers had the last laugh. While the lily-white lineups fielded by Breadon's Cardinals and Yawkey's Red Sox -- who met in the last pre-Robinson World Series -- faded from contention, Robinson, Roy Campanella and Don Newcombe helped the Dodgers dominate the NL for a decade.

Copyright © 1996 Doug Pappas. All rights reserved.
Originally published in the Summer 1996 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.

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