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- [00:00]
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- [00:24]
Jacob Goldstein
At 4am on October 8, 1969, Curt Flood got woken up by a phone call. Flood was 31 years old at the time, and he'd spent the last 12 years, almost his entire adult life, playing center field for the St. Louis Cardinals. He was an all star. He'd led the Cardinals to the World Series three times. Sports Illustrated called him the best center fielder in baseball. And he planned to finish out his career in St. Louis.
- [00:50]
Keith Roemer
But when he rolled over and picked up the phone at 4am A middle manager from the Cardinals front office told Curt Flood he had just been traded to the Philadelphia Phillies.
- [01:00]
Jacob Goldstein
Curt Flood didn't want to go to Philadelphia. They just finished second to last in their division. And on top of that, Curt Flood was black. And Phillies fans had a history of treating the team's black players badly. One black Phillies player in the 60s actually wore a helmet in the outfield because Phillies fans threw batteries at his head.
- [01:19]
Keith Roemer
But Curt Flood did not really have a choice. The way baseball worked at the time, when you got drafted by a major league baseball team, you played for that team. They wanted to trade you. You went where they traded you. You didn't like it, you could quit baseball. This was explicit in every player's contract. It was called the reserve clause because teams reserved the rights to each player.
- [01:41]
Jacob Goldstein
Ker Flood thought this was ridiculous. In fact, he didn't just think it was ridiculous, he thought it was illegal. So he decided to sue Major League Baseball for a right that most of us take for granted, the right to work for whatever employer might want to hire him.
- [01:58]
Keith Roemer
His case went all the way to the Supreme Court. Kind of ruined Curt Flood's life, and it helped change professional sports forever. Hello and welcome to Planet Money. I'm Keith Romer.
- [02:09]
Jacob Goldstein
Can I say hello and welcome to Planet Money. It's been a long time. I'm Jacob Goldstein.
- [02:13]
Robert Smith
Are we getting the band back together? I'm Robert Smith.
- [02:16]
Keith Roemer
It's Alumni Day at Planet Money. Jacob and Robert, you both used to host Planet Money.
- [02:22]
Jacob Goldstein
Welcome back. Thank you. Truly happy to be back.
- [02:25]
Keith Roemer
And you have returned today to share a version of an episode from your excellent new podcast, Business History.
- [02:32]
Jacob Goldstein
It's a show about the history of business.
- [02:33]
Keith Roemer
It's all there in the name, including, in this case, the history of the business of Major League Baseball. So we are going to turn over the rest of the episode to the two of you. You guys remember how to do the next part?
- [02:45]
Robert Smith
I got this Today on the show, the story of Curt Flood and the Reserve clause is a story about capital versus labor, a story about antitrust law and competition. And really, it's a story about the moment when people stopped thinking of professional sports as just a game and started to think of it as a business.
- [03:09]
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- [03:26]
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This message comes from NPR sponsor Charles Schwab. When is the right time to sell a stock? How do you protect against inflation? Financial decisions can be tricky and often your own cognitive and emotional biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab can help the Join host Mark Reape as he offers practical solutions to help overcome the cognitive and emotional biases that may affect your investing decisions. Download the latest episode and subscribe@schwab.com financialdecoder this message comes from LinkedIn Ads Ever invest in something that seemed incredible at first but didn't live up to the hype? For marketers, that's impressions. When ads don't create revenue, they that's a tough conversation with the CFO. Instead, invest in results your CFO will love. LinkedIn Ads generates the highest ROAS of all major ad networks. So advertise on LinkedIn, spend $250 and get a $250 credit. Just go to LinkedIn.com NPRpod Terms and Conditions apply. Support for this podcast and the following message come from E. Trade from Morgan Stanley. This is Discover a wide range of investing choices and banking solutions all in one place. Plus get up to $1,500 when you open a brokerage account with a qualifying deposit today. Learn more@etrade.com offer banking products and services are provided by Morgan Stanley Private Bank, national association member fdic. Terms and other fees apply. Investing involves risks. Morgan Stanley Smith Barney LLC Membercypic so
- [05:05]
Jacob Goldstein
it's 1969 and Curt Flood is one of the highest paid players in baseball. He made $90,000. Whoa. Robert Smith do you want to guess how much that is in inflation adjusted 20? $26?
- [05:18]
Robert Smith
I mean, highest paid players in baseball? It must be like $2 billion.
- [05:23]
Jacob Goldstein
Close. It's $800,000.
- [05:26]
Robert Smith
I mean it's a lot.
- [05:27]
Jacob Goldstein
Well so is it a lot or a little? It's a lot of money relative to somebody with a normal job today. But it's like, I don't know, 30 times less than a star baseball player would make today. And so let's think about why. Why were top players in baseball making so much less in 1969? Well, part of it is baseball was just a smaller game then. It's a more lucrative game today. There is more money overall. The pie is bigger.
- [05:53]
Robert Smith
Broadcasting, merchandising, everything, advertising.
- [05:56]
Jacob Goldstein
But there's another reason, a reason that's, you know, the center of today's show, and that is the players didn't have very much leverage because of the reserve clause, because they couldn't go play for other teams. So as a result, they were getting a smaller share of the money that was coming into the game, a smaller share of the pie.
- [06:12]
Robert Smith
And we're used to thinking of sports as different. But think about it for a moment, how wild this is. Imagine if, if every year Google and Apple drafted the computer science graduates coming out of Stanford and Carnegie Mellon and mit, and when you got drafted, you had to go work for that company, even if you didn't like Apple. Like you had a contract and you had to work for them forever until they fired you or traded you to another tech company, in which case you had to work for that company or not be a computer engineer. The employees would have no bargaining power. They would absolutely be underpaid. Not what they're paid now. Right. It would be flagrantly, wildly illegal.
- [06:51]
Jacob Goldstein
And in fact, this is not a hypothetical. It was somewhere back around 2010, there was, in fact this scandal where Google and Apple and a few other companies had these secret deals not to recruit each other's employees. It wasn't quite as stringent as the reserve clause, but it was definitely illegal. And they had to pay hundreds of millions of dollars because you can't do that. You can't have a no poaching agreement.
- [07:14]
Robert Smith
There's a term that we love here at Planet Money and at business history, it's called monopsony. It's Monopoly's lesser known cousin. In a monopoly, of course, there is one seller, so they can charge a lot of money for their monopoly product. In the case of monopsony, there is only one buyer. It's often applied to job markets, like in a company town where there's only one employer, that's monopsony, which means that they can actually pay people much less. And the reserve clause is a classic case of monopsony. The Only buyer at this point for Curt Flood's labor is the St. Louis Cardinals. He has to take whatever they give him, or if they want to trade him, he gets traded.
- [07:54]
Jacob Goldstein
So this is why Curt Flood wanted to sue baseball. And when he was thinking about doing this, trying to make his decision, he talked to the head of the baseball players union, which had only recently become a full fledged official union. And the head of the union tells Flood that there have been a couple of similar court cases in past decades and that the players always lost.
- [08:14]
Robert Smith
And to be fair, there is something to the owner's stance here because professional sports do require at least a little bit of collusion, some light collusion. Well, you have to show up in the same place at the same time, right, Obviously. But also because you want the teams to be competitive, you want to have exciting games. The fans want that, the owners want this. This is how you make money. So if you had a truly free market where anyone could just start a new team, pay any amount for the best talent, one really rich guy, and you know, this would happen, would just start a team, buy up all the best players, and then win every game and nobody would watch. It would ruin the entire league.
- [08:53]
Jacob Goldstein
And baseball fans right now are probably thinking of the Dodgers, who have the highest paid team in baseball, who've won the last two World Series. And we will talk more about that at the end of the show.
- [09:01]
Robert Smith
They are fun to watch.
- [09:02]
Jacob Goldstein
Okay, so back to Curt Flood trying to think about whether to sue baseball. There's one other thing that is stacked against him, and that is this. When you look back at the cases that came before Curt Flood, you really get the sense that the judges just kind of didn't want to mess with baseball. Like, baseball, it's like apple pie. It's this special game. It's not a normal business. And you, you see this in their decisions. So remember, Curt Flood had gone to the head of the union for advice. And the bottom line, the head of the union tells Flood, is your case is like a million to one shot. And even if you happen to win, you're not going to get damages because you're already making this huge, you know, huge for the time, salary. Oh, and also, by the way, if you bring this case, your career as a player, because nobody's gonna wanna hire the guy who sued baseball, even as a manager, as whatever, you're done with baseball if you bring this case.
- [09:57]
Robert Smith
So it's scary. I mean, he's being told, like, you could throw your whole career away if you make this move.
- [10:03]
Jacob Goldstein
And importantly, I think Curt Flood has already been through a lot in his life up to this point. When he was coming up in professional baseball in the 1950s, he played on minor league teams in North Carolina and Georgia, where there was just constant racist heckling from the fans. One time, he even got yell by his team's own trainer because he put his dirty uniform in the laundry with his white teammates uniforms. And in fact, the trainer pulled Flood's uniform out with a stick and sent it to a black laundry 10 miles away.
- [10:36]
Robert Smith
And as Flood is thinking about swing baseball, race is clearly part of the dynamic in his mind. All of the owners are white. More and more of the players are black.
- [10:44]
Jacob Goldstein
And after the union head tells Flood how he'll probably lose his case and be ostracized from baseball, Flood says, okay, but if I do win, will it help other players in the future? And the union head says, yeah, it will. And Flood says, that's good enough for me. Let's do it. He decides to sue Major League Baseball.
- [11:05]
Robert Smith
So how do you do this? At this point, he knows. What was it? Million to one odds of winning? Yeah. How do you find a lawyer for that?
- [11:13]
Jacob Goldstein
You find a guy who's kind of half politician, half lawyer. That'll do it. Yeah, that'll do it. So the union finds this lawyer named Arthur Goldberg. He had been a friend, former Supreme Court justice, who stepped down to be the ambassador to the UN which truly seems like a step down, I guess. You know, maybe it was a different story.
- [11:30]
Robert Smith
Well, back in those days. Yeah.
- [11:31]
Jacob Goldstein
Goldberg says he'll take the case if the union just pays his expenses. And Goldberg and Flood come up with a strategy that is this. They're not just going to fight the case in court. They're going to fight the case in what journalists love to call the court of public opinion. They're gonna try and convince America that the reserve clause is wrong. You're out of order, America. So their first move is not to file the lawsuit, but in fact, to send a letter to the commissioner of baseball, a guy named bowie Kuhn. It's 1969 when they send this letter, and the language in the letter is pretty clearly invoking something bigger than Curt Flood's case. It's invoking the civil rights movement. Robert, you want to read a little bit from the letter?
- [12:18]
Robert Smith
Dear Mr. Kuhn, After 12 years in the major leagues, I do not feel that I am a piece of property to be bought and sold irrespective of my wishes. I believe that any system which produces that result violates my basic rights as a citizen and is inconsistent with the laws of the United States and of the several states.
- [12:37]
Jacob Goldstein
Yeah. And then in the second paragraph, Flood says he wants to talk to other teams about playing for them. Last line of the letter.
- [12:44]
Robert Smith
I therefore request that you make known to all the major league clubs my feelings in this matter and advise them of my availability for the 1970 season. Sincerely yours, Curt Flood.
- [12:55]
Jacob Goldstein
A week later, Bowie Kuhn calls Flood at home and reads his response. The league's response to Curt Flood's letter. The response says, in part, dear Kurt,
- [13:07]
Robert Smith
I certainly agree with you that you as a human being are not a piece of property to be bought and sold. This is fundamental in our society and I think obvious. However, I cannot see its applicability to the situation at hand. You've entered into a current playing contract. Under the circumstances and pending any further information from you, I do not see what action I can take and cannot comply with the request contained in the second paragraph of your letter. Sincerely yours, Bowie Kuhn.
- [13:34]
Jacob Goldstein
So now this is a big deal. The court of public opinion is in session, and around this time, Flood does this interview with Howard Cosell, the famous sportscaster, and, and Cosell says some version of what a lot of commentators are saying about Flood's case, which is essentially in this letter. You say you're not a piece of property to be bought and sold, but you're getting rich playing baseball. How can you compare yourself to somebody who's enslaved?
- [14:02]
Robert Smith
And Flood says a well paid slave is nonetheless a slave.
- [14:08]
Jacob Goldstein
That is probably Curt Flood's most famous quote. There's a biography of Flood by Brad Snyder that was a key source for this show that is actually called A well Paid Slave.
- [14:18]
Robert Smith
There was also that subtler argument against Flood's case as well. If the reserve clause went away, the richest teams would just buy the best players and win all the time. Baseball wouldn't be competitive anymore. The league would destroy itself. So the owners said, and most people
- [14:34]
Jacob Goldstein
agreed with the owners. A poll around this Time found that 69% of people thought the reserve clause was necessary for baseball. So Flood is losing the case in the court of public opinion when his case goes to the court of law. The court court in Manhattan in 1970. And Flood's lawyers know they need a good witness to change public opinion. But nobody who's playing baseball at the time wants to testify. Because they're too scared. Right? Why would they? But you know who agrees to testify? Jackie Robinson.
- [15:08]
Robert Smith
Amazing.
- [15:09]
Jacob Goldstein
Curt Flood's hero. First black man to play in the major leagues. At this point, he's 51, he's retired, he's going blind, but he agrees to testify. He takes the stand, and Flood's lawyer asks Jackie Robinson about the reserve clause.
- [15:24]
Robert Smith
And Robinson says anything that is one sided in this country is wrong. And I think the reserve clause is a one sided thing in favor of the owners. And I think it certainly should be at least modified to give a player an opportunity to, to have some control over his destiny.
- [15:41]
Jacob Goldstein
So fundamentally, Jackie Robinson is saying something quite similar to what Curt Flood has been saying, but in a, in a little bit of a subtler way.
- [15:49]
Robert Smith
And he is a national hero at this point.
- [15:52]
Jacob Goldstein
Yes. In fact, the judge in the case asked Jackie Robinson for an autograph for his grandson. And it is the case that when Jackie Robinson says this, people listen. The coverage in the news is warmer than when Curt Flood says it. So now the public is starting to consider Flood's argument a little more seriously. The vibes are changing. But the judge in the case doesn't care about vibes. He cares about legal precedent. And the legal precedent is clear. The Supreme Court has repeatedly upheld the reserve clause. And so that's what the judge does. He finds against Flood and in favor of Major League Baseball.
- [16:30]
Robert Smith
Flood's lawyer says this is only the end of the first inning. See, that's what you want out of a lawyer. Is someone who can make that joke
- [16:36]
Jacob Goldstein
a good baseball metaphor. Yeah, I feel like lawyers always talk about innings, so you must be so psyched if it's a baseball case. It's like, finally, Flood's lawyers appeal the case. They lose on appeal, they appeal again, and the Supreme Court of the United States agrees to take the case.
- [16:53]
Robert Smith
The super bowl of trials in a minute.
- [16:56]
Jacob Goldstein
When our program continues. We know that it's supposed to be the World Series. It's a joke.
- [17:12]
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- [17:29]
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This message comes from NPR sponsor Charles Schwab. When is the right time to sell a stock? How do you protect against inflation? Financial decisions can be tricky, and often your own cognitive and emotional biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab can help. Join host Marc Reape as he offers practical solutions to help overcome the cognitive and emotional biases that may affect your investing decisions. Download the latest episode and subscribe@schwab.com financialdecoder this message comes from LinkedIn Ads Ever invest in something that seemed incredible at first but didn't live up to the hype? For marketers, that's impressions. When ads don't create revenue, that's a tough conversation with the CFO. Instead, invest in results your CFO will love. LinkedIn Ads generates the highest roas of all major ad networks. So advertise on LinkedIn. Spend $250 and get a $250 credit. Just go to LinkedIn.com NPRpod Terms and Conditions apply. Support for this podcast and the following message come from E. Trade from Morgan Stanley Discover a wide range of investing choices and banking solutions all in one place. Plus, get up to $1,500 when you open a brokerage account with a qualifying deposit today. Learn more@etrade.com offer banking products and services are provided by Morgan Stanley association member fdic. Terms and other fees apply. Investing involves risks. Morgan Stanley Smith Barney, LLC Member Sipic
- [19:08]
Robert Smith
Oye, oye Oye the Supreme Court hears oral arguments in the case of Curtis C. Flood versus Bowie K. Keun, Commissioner of Baseball, et al, on March 20, 1972.
- [19:21]
Jacob Goldstein
It's the big day. The courtroom's packed, the press box is overflowing. People are spilling out onto the courthouse steps or whatever. But you know one person who was not there?
- [19:31]
Robert Smith
Curt Flood.
- [19:32]
Jacob Goldstein
Curt Flood at this point is apparently living in Mallorca, Spanish island in the Mediterranean, working part time as a sports announcer for an English language radio station, also working part time at a bar. Kurt Flood is generally having a tough time at this point in his life.
- [19:49]
Robert Smith
I mean, think of it a few years before he's an All Star, and now it seems like everyone in America is mad at him for shaking up Major League Baseball.
- [19:56]
Jacob Goldstein
Yes, yes, exactly. But you know, his lawyer is there at the Supreme Court to represent him, and his lawyer steps up at oral arguments to make the case before the Supreme Court against the Reserve Clause. Against this rule that Curt Flood is fighting. Flood's lawyer says the reserve clause is
- [20:14]
Robert Smith
a group boycott and a blacklist. All owners under the rules are obligated not to deal with a player if he is on a reserve list, he is blacklisted.
- [20:24]
Jacob Goldstein
In other words, Flood's lawyer is saying the reserve clause is literally a bunch of businesses getting together and saying, this guy, nobody hire him. We're not going to hire this guy.
- [20:34]
Robert Smith
And then Flood's lawyer says, and this is the most obvious restraint of trade known to man. Hmm.
- [20:41]
Jacob Goldstein
To an antitrust lawyer, this sentence would
- [20:43]
Robert Smith
be amazing because there was much murmuring in the courtroom.
- [20:46]
Jacob Goldstein
Because restraint of trade is maybe the key phrase in American antitrust law.
- [20:52]
Robert Smith
Almost as old as baseball.
- [20:53]
Jacob Goldstein
Almost as old as baseball. And by the way, this meaning of trade has nothing to do with, like, trading a player to another team. It's trade as in commerce. It means it is illegal for businesses to conspire to restrain commerce. And then Flood's lawyer delivers a line that is more appealing to the masses.
- [21:09]
Robert Smith
He says, and I love this. Free American workers determine their own destiny.
- [21:15]
Jacob Goldstein
This fundamentally is what Curt Flood wants to be, A free American worker determining his own destiny. Put her on a T shirt, usa with an airbrushed eagle flying over it.
- [21:26]
Robert Smith
I'm gonna say it again. Free American workers determine their own destiny.
- [21:31]
Jacob Goldstein
Flood's lawyer sits down, and the lawyers for Bowie Kuhne and the league and the owners make their case next. Predictably, they point out what they've pointed out in previous cases. For one, a truly free market in players labor could lead to one team buying up all the best players and winning all the games, and that this, in turn, would make baseball boring to watch and so could destroy the league as a business. They point out that the courts have previously ruled that baseball is basically exempt from antitrust laws. And then, in addition to those arguments, they make this new really interesting argument that's going to prove to be quite important, and that's this. They point out that the players union, just a few years earlier had negotiated its first ever collective bargaining agreement with the league, a union contract. And the union has agreed to the reserve clause in that contract. And so the lawyer for the league
- [22:25]
Robert Smith
says, no suit can appropriately be brought by a member of the collective bargaining organization in a matter which is essentially a matter for collective bargaining.
- [22:35]
Jacob Goldstein
In other words, if you don't like the reserve clause, don't file a lawsuit. Don't take us to court. Just have your union negotiate a different deal in the next union contract. A few months later, the Supreme Court issues its ruling. The justices point out that Congress has frequently considered passing legislation to apply antitrust law to baseball, but that Congress has never passed that legislation. And according to the court, according to the opinion, this is proof that Congress does not want antitrust law to apply to professional baseball. In their opinion, the justice is right.
- [23:09]
Robert Smith
If there is any inconsistency or illogic in all of this, it is an inconsistency and illogic of longstanding that is to be remedied by the Congress and not by this court.
- [23:20]
Jacob Goldstein
Don't blame us if it's crazy. Blame Congress.
- [23:23]
Robert Smith
Congress wanted it to be crazy.
- [23:25]
Jacob Goldstein
Baseball is weird. This whole reserve clause thing is not our problem.
- [23:30]
Robert Smith
And it stays in place.
- [23:30]
Jacob Goldstein
And it stays in place. Curt Flood loses. The reserve clause persists. But. But the story is not over yet. Curt Flood has lost in the court of law. But remember, we were talking about the court of public opinion. And in the court of public opinion, Curt Flood did pretty well.
- [23:49]
Robert Smith
I mean, I can't imagine America is watching the proceedings at the Supreme Court.
- [23:54]
Jacob Goldstein
Well, remember, there was Jackie Robinson testifying. There was Flood doing all those interviews. And also, time has passed, Right. This is an era when public opinion is shifting in fairly broad ways in America.
- [24:06]
Keith Roemer
Right.
- [24:06]
Jacob Goldstein
The case starts in the late 60s. It proceeds now. We're into the early 70s. And it's pretty clear that over this period of time, people around the country have started to think differently about the reserve clause and about baseball. And I mean, I think the core of it is a lot of people started to see really, the foolishness of treating baseball as something other than a business. People stopped thinking of baseball players as players, as grown men playing a boy's game, and they started thinking of them as workers. And when you start thinking of baseball players as workers, the reserve clause kind of becomes ridiculous because you think of
- [24:48]
Robert Smith
your own job, and you want free determination to work any job that you want.
- [24:53]
Jacob Goldstein
After the verdict comes out, papers around the country write editorials condemning the decision. Taking the side of Curt Flood, for example, the New York Times writes, the
- [25:03]
Robert Smith
highest court in the land is still averting its gaze from a system in American business that gives the employer outright ownership of his employees. Echoing Curt Flood's words.
- [25:12]
Jacob Goldstein
Yeah, that word ownership is clearly echoing that Curt Flood letter. That kind of started the whole thing. A poll taken around this time finds that popular opinion has in fact shifted dramatically at this point, by an overwhelming margin. People support Curt Flood and the players. And of course, the players see this shift. They feel this shift, and they take action. A few players decide to test what the reserve clause really means. Specifically, the clause says, if a player refuses to sign his new contract, these
- [25:47]
Robert Smith
are the exact words, pay close attention. The club shall have the right to renew the contract for the period of one year.
- [25:56]
Jacob Goldstein
And so the way people had read that language up to this point is the teams have the right to renew the contract for one year, and then another year and another year.
- [26:07]
Robert Smith
There's always another year. Forever.
- [26:08]
Jacob Goldstein
There's always another year.
- [26:09]
Robert Smith
But there is another reading of the language. Maybe the club shall have the right to renew the contract for the period of one Year means that the club's right to renew only lasts for one exact year. And if the player refuses to sign a new contract and waits for one exact year, can the player then go work for any team that will hire them? I don't know.
- [26:30]
Jacob Goldstein
The players didn't know either. But in 1975, a couple of them decided to test it out. They refused to sign the new one year contract offered by the team, the kind of contract that everybody had been signing. They play for one year with no contract, and at the end of the year, the players and the teams go before an arbitrator to decide, you know, what is the correct reading of the reserve clause. And the arbitrator finds in favor of the players. After one year, the players are free to sign with any team that'll hire them. And in fact, these players go sign with other teams and get paid a lot more money. Surprise. They were being underpaid before. Around the same time this is happening, the players union was negotiating their big overarching contract with the owners with the league, the contract that covered all of the players.
- [27:22]
Robert Smith
And the players are walking into this union contract negotiation with a pretty strong hand. At this point. They have that arbitration ruling, but also public opinion is on their side.
- [27:31]
Jacob Goldstein
And in fact, the players are able to use all this leverage to kind of win, to get the owners to capitulate. The owners agreed to get rid of the reserve clause, although in the contract, players were only allowed to become free agents after their sixth year in the major leagues.
- [27:49]
Robert Smith
So not purely a free market, which is interesting. It sounds like this was negotiated. Teams get several years of exclusivity from the players they drafted and presumably trained and brought up through the minors. But then players get to look forward to being a free agent after they'd put in their time.
- [28:06]
Jacob Goldstein
And similar kinds of things are happening outside of baseball around this time. Partly inspired by Curt Flood, players in the NBA and the NFL are challenging restrictive rules. In 1976, two separate cases made it easier for players in those leagues for basketball and football players to become free agents. Though actually free agency was rather limited in the NFL until the 90s. Now we can step back here and ask kind of a fundamental economic what has this shift in sports meant for the way that the pie is split between capital and labor, between the owners and the players? And there's a pretty clear answer. In the early 70s, when Curt flood brought his case, less than a quarter of the revenue going to the teams went to the players. Today it's around half, half the revenue. So the share of the pie going to players to labor has basically doubled.
- [29:05]
Robert Smith
That's amazing in economics. Now, it is worth pointing out that in the last couple of years, the potential downsides of free agencies, in fact, the same ones that the owners had warned about at the very beginning, have kind of come to pass. The Los Angeles Dodgers, may they forever win, have far and away the highest payroll in baseball. Famously, they are paying Shohei Ohtani $70 million a year.
- [29:29]
Jacob Goldstein
Most of that is deferred.
- [29:30]
Robert Smith
Yes, still a lot of money. And they've won the World Series two years in a row. Dynasty. You know, there's an argument to be made that they are just buying their way to championships.
- [29:40]
Jacob Goldstein
That is a reasonable argument, but. But I think it's clear that it doesn't have to be that way. I mean, just look at the NFL and the NBA. In those leagues, about half of all the revenues go to player salaries. Similar to, you know, the way the pie is divided in baseball. But the NFL and NBA players unions have agreed to a salary cap, basically a total amount that each team can pay all of its players. There are some wrinkles, but. But that's basically the way it works, which means it's possible for players to get a bigger piece of the pie without letting one team buy its way to victory. And by the way, the current contract for the baseball players union is coming up for renewal at the end of this year. And you know what the owners want?
- [30:26]
Robert Smith
They want a salary cap.
- [30:28]
Jacob Goldstein
They want a salary cap.
- [30:28]
Robert Smith
Yeah, sure, cap.
- [30:31]
Jacob Goldstein
My downside there, I guess, but it doesn't necessarily mean more of the pie goes to the owners. But anyways, the players don't want the salary cap, and so we'll see what happens with that.
- [30:40]
Robert Smith
So that's basically the end of the story for now in the news, but we need to finish Kurt Flood's personal story.
- [30:46]
Jacob Goldstein
Yes, when we last heard from him, it was 1972, and he was working at a bar in Majorca and drinking a lot. He did eventually get sober, moved back to the US and eventually became recognized for what he'd done for baseball and for that matter, for all of professional sports. And he did have this last kind of big moment in 1994. At the time, the baseball players were on strike, among other things going on. There were accusations that teams were colluding to suppress pay for free agents. And the strike was dragging on and on. They had canceled the World Series, and some of the players started wondering if they should just call off the strike and go back to work.
- [31:29]
Robert Smith
Yeah, public opinion was shifting against them.
- [31:31]
Jacob Goldstein
So they called in Flood to give the players a pep talk. And Curt Flood stood up in a room full of Major League Baseball players and he told them, you know, stand your ground. I fought so you could be where you are today, he said. And this part's a direct quote. Don't let the owners put the genie back into the bottle. And when he finished, the players stood up and applauded.
- [32:01]
Keith Roemer
Robert Jacob, thank you so much for coming in and sharing that episode with us today. Roemer.
- [32:06]
Jacob Goldstein
It was truly a great time.
- [32:07]
Keith Roemer
Where can people find the excellent podcast Business History?
- [32:11]
Jacob Goldstein
Literally wherever they're listening to Planet Money right now and also on YouTube. Just recorded one on Lloyd's of London about insurance. Great Planet Money subject got Southwest Airlines, Warren Buffett, Sears, Thomas Edison, a lot.
- [32:24]
Keith Roemer
Business History is the name of the show. Also, if you like Jacob's reporting, you can find it in our book. Find the Planet Money book in stores now, or you can order it online@planetmoneybook.com this episode of Planet Money was produced and fact checked by Emma Peaslee. Alex Goldmark is our executive producer.
- [32:43]
Jacob Goldstein
Also, special thanks to Gabriel, Hunter Chang and Ryan Dilley at Business History. I'm Jacob Goldstein.
- [32:49]
Keith Roemer
And I'm Keith Romer. This is npr. Thanks for listening.
- [32:56]
Jacob Goldstein
Foreign.
- [33:01]
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