It’s been 50 years since a lawyer’s decision unlocked free agency in MLB and changed sports forever

Sports were turned upside down 50 years ago Tuesday by a man who never threw or kicked a ball. Peter Seitz, an arbitrator with expertise in labor relations, struck down Major League Baseball’s reserve clause, which had bound players to their teams since the 1870s, fundamentally changing the economic landscape of professional sports forever.

The landmark 65-page decision issued on December 23, 1975, would lead to an unprecedented upheaval that transformed thousands of athletes into multimillionaires and revolutionized professional sports economics.

“The real floodgates opened after that,” former pitcher David Cone reflected. “Players in all walks of life, in all sports, were finally able to see what free agency really looks like. There was all the doom and gloom back then from one side that said: ‘This is going to ruin the game. It’s not sustainable.’ And actually, it was just the opposite. It made the game better.”

The financial impact has been staggering. Baseball’s average salary was a modest $44,676 at the time of Seitz’s decision. Today, that figure has soared to approximately $5 million – a 112-fold increase. In December 2023, outfielder Juan Soto commanded a record $765 million deal with the New York Mets, highlighting how dramatically player compensation has evolved.

For perspective, the 1975 average salary would be equivalent to about $260,909 in today’s dollars, according to the Consumer Price Index. This indicates that player salaries have far outpaced inflation.

Seitz’s ruling created a ripple effect across the sports world, with similar free agency upheavals following in the NFL, NBA, NHL, and European soccer. “The timeframes largely align to suggest that there were indeed synergies between what was happening on the baseball side and what was happening in other sports,” noted Tony Clark, current head of the baseball players’ association.

The path to free agency wasn’t straightforward. Curt Flood had previously lost a lawsuit arguing for free agency in 1972 when the U.S. Supreme Court upheld baseball’s antitrust exemption, ruling that any change would require congressional action.

A year before Seitz’s landmark decision, pitcher Catfish Hunter was set free on a technicality when Seitz determined that Oakland Athletics owner Charlie Finley had failed to make a contractually required $50,000 payment into Hunter’s long-term annuity fund. Following an intense bidding war, Hunter signed a five-year contract with the New York Yankees for approximately $3.2 million – an astronomical sum at that time.

“We saw this huge contract, it was like reading from another world,” recalled former All-Star pitcher Steve Rogers, who became one of the first beneficiaries of free agency and later a long-time union official. “The magnitude was just unheard of, the number of dollars that were guaranteed to him. It didn’t take long for us to see that there was a lot of money to be spent in buying talent and then we started seeing: My talent is worth a lot.”

Union head Marvin Miller and general counsel Dick Moss had strategically negotiated the first provision for grievances to be decided by an outside arbitrator in 1970. They sought a test case for the contract provision that allowed teams to renew player contracts for an additional year in perpetuity.

The opportunity arose when Andy Messersmith of the Los Angeles Dodgers and Dave McNally of the Montreal Expos played the 1975 season under renewed contracts. They maintained in a grievance that the renewal period was one year only, after which they should be declared free agents.

Following extensive hearings, Seitz urged owners to settle the case. Then-commissioner Bowie Kuhn pressed owners to fire Seitz before a decision, but management’s Player Relations Committee refused, fearing negative publicity.

When Seitz ruled for the union, management fired him that same afternoon and vowed to challenge the decision in federal court. “Their basic attitude was, ‘We are not going to change one comma of the reserve system — we like it the way it is,'” Miller said in a 2000 interview, 12 years before his death.

The courts upheld Seitz’s decision. In February 1976, U.S. District Judge John W. Oliver affirmed the ruling, and the following month, an 8th U.S. Circuit Court of Appeals panel did the same.

By July 12 that year, players and owners agreed to a four-year collective bargaining agreement that created immediate free agency for all players after the 1976 or 1977 seasons, and established the six-year service requirement for free agency that remains in place today. Baseball greats Reggie Jackson and Rollie Fingers were among the first players to benefit from this new system.

“The difference between winning and losing was billions and billions of dollars, maybe tens of billions of dollars,” Moss, who died last year, said after a 25th anniversary celebration in 2020.

Baseball has weathered nine work stoppages since 1972, and with the current labor contract set to expire at the end of December 1 next year, another potential disruption looms on the horizon.

Former commissioner Bud Selig reflected in 2000, “I think one can make a case that we’ve spent the last two-plus decades trying to re-establish some reasonable equilibrium.”