Lessons from the Strike of 1981

Baseball is the most historically-minded sport, and the “Today in Baseball History” column is a common fine-print feature. But there won’t be any “20 years ago today” entries this month: July 1981 was the Month Without Baseball.

Before the 1994-95 meltdown, the 50-day labor stoppage that split the 1981 season marked the lowest point in modern baseball history. It offers several lessons for the current labor situation.

Lesson One: The sky is NOT falling. In January 1981, Whitey Herzog warned, "Before long, you can look for some teams to go bankrupt, like the Minnesota Twins. The Twins and some other clubs just can't afford to compete for salaries the way things are set up. I think the bankruptcies will start in two or three years." Instead of going bankrupt, the Twins won two World Series in 10 years.

Sound familiar? At press time, those same Twins would knock the Yankees out of the playoffs -- thanks largely to a trade, widely described as a salary dump, that brought them Eric Milton and Cristian Guzman for Chuck Knoblauch.

Lesson Two: Ignore what the owners say; look at what they do. Before the 1981 season, MLB spent $2 million on a strike-insurance policy. The policy contained a 153-game deductible, after which the owners would receive $100,000 for each of the next 500 games lost to a labor dispute. After taking a hard line for months, the owners yielded on the central issue just as the strike insurance ran out.

Coincidence? I’ll believe Bud Selig’s talk of contraction just as soon as I see him write a $10-$15 million check to the owners losing their teams.

Lesson Three: The owners don’t really understand their own business. After having free agency rammed down their throats before the 1976 labor talks, the owners vowed to limit its effect. The owners and players resolved every other issue in 1980; the one and only issue in the 1981 talks was the owners’ insistence that teams losing a free agent should be compensated with a player off the signing club’s major league roster.

Under their original proposal, free agent signings would have become, in effect, forced trades. A club losing any free agent could draft a player from the signing club. Since the signing club would be allowed to protect only 15 players from its roster, the price of signing a free agent would probably include the loss of the club’s best reserve, fifth starter, or #2 setup man.

It would be hard to design a compensation formula less suited for achieving its intended purpose. The owners’ formula would have had no effect on the competition for the elite free agents whose salaries drove the market: the Red Sox’ pursuit of Manny Ramirez would hardly have been deterred by the prospect of losing Mike Lansing or Rod Beck in return. But it would have destroyed the free agent market for the less skilled veterans who dominate every roster. The owners couldn’t understand why these players led the opposition to their proposal.

Lesson Four: Whatever solution is ultimately reached, the owners will find a way to screw it up. The 1981 strike ended with a compensation formula along the lines proposed by the players. Teams losing free agents ranked among the top 20% at their position – “Type A” free agents – would be entitled to a compensation pick -- but that player could be drafted from the roster of any team eligible to sign free agents. Clubs signing a Type A free agent could protect 24 players in their entire organization. Everyone else could protect 26, except for five teams (including the Red Sox) who opted out of the free agent market for three years. Those five couldn’t sign anyone else’s free agents, but in return were exempted from the draft.

This unwieldy system worked fine for two years. But the 1983-84 offseason brought two self-inflicted public relations embarrassments which ultimately brought down the system.

First the White Sox, who lost Dennis Lamp to the Blue Jays after posting the majors’ best record in 1983, drafted Tom Seaver from the last-place New York Mets. Even Commissioner Kuhn admitted that he had asked the White Sox not to draft Seaver. Because every player in the organization was subject to the draft unless protected, the Mets had shielded 12 minor leaguers ahead of Seaver, including future All-Stars Dwight Gooden, Kevin Mitchell, Sid Fernandez and Len Dykstra.

Then the Yankees lost a player they hadn’t even been able to protect. Oakland drafted Tim Belcher from the Yankees even though Belcher, the nation’s top amateur pitching prospect, hadn’t signed with the Yankees until three days after the deadline for submitting protected lists. Adding insult to injury, the draft price paid by Oakland was a fraction of the bonus the Yankees had given Belcher.

After forcing a 50-day strike to win the compensation draft, the owners quietly abolished it in the next labor agreement. Only time will tell if the owners will again fight a battle that’s not worth winning...but if history is any guide, they probably will.

Copyright © 2001 Doug Pappas. All rights reserved.
Originally published in the July 2001 issue of Boston Baseball.

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