- Uncategorized, Volume 2013

Dick Woodson’s Revenge: The Evolution of Salary Arbitration in Major League Baseball

Article by: Edward Silverman

2013 PEPP. L. REV. ONLINE 21 (2013)

By the time Dick Woodson was selected as the first player to go through salary arbitration, baseball’s troubled labor history was already wellestablished and was nearing a breaking point.  Amidst increasingly common player holdouts related to salary disputes and the uniformly hostile attitudes of penurious owners, players looked to unionize as a way to fight for their rights.  With unionization came collective bargaining agreements.  The first such agreement, in 1968, provided the framework for both grievance and salary arbitration.  It was not until 1974, however, that salary arbitration actually went into effect, with the Woodson arbitration.  In agreeing to this negotiation practice owners hoped to stop salary holdouts and rationalized that, in the long run, they might prevent free agency.  While the affirming vote was a near-unanimous 22-2, one notable dissenter was Dick Meyer, a brewery executive and experienced negotiator who represented the Cardinals.  Meyers said at the time, “[t]his will be baseball’s ruin.”  When asked why he was selected as the first player for salary arbitration, Dick Woodson said, “I was picked because I was the poster child of the most abused in Major League Baseball as far as contract negotiations.”  It is ironic that it was Woodson’s perceived mistreatment that led to his selection, as that dubious honor only served to exacerbate his predicament.  Woodson himself never experienced the benefits of salary arbitration.  When his playing career ended prematurely due to injury on July 8, 1974—as a member of the New York Yankees, a team he loathed12— Woodson was indignant and bitter.  As a martyr to the cause of fair player compensation, however, Woodson inadvertently ushered in an era of unprecedented player leverage, evident today in the outrageous salaries of many professional baseball players.  The present state of the business of baseball is a direct result of the implementation of what has come to be known as “baseball style arbitration,” a process that began in 1974 with Dick Woodson.  So, while Woodson himself never reaped the benefits of baseball’s arbitration system, his legacy endures to seek his revenge. Like a vengeful apparition, Woodson is there every time a flustered owner wincingly signs a multimillion dollar contract and an underpaid young player cashes in. This paper will examine the evolution of salary arbitration in professional baseball through the lens of the original 1974 Dick Woodson salary arbitration.  Part II will discuss the general development of labor relations in professional baseball, with an emphasis on how and why salary arbitration came to be implemented.  Part III will focus specifically on Dick Woodson’s salary arbitration and how that experience shaped the immediate evolution of the practice and informed the current state of affairs in Major League Baseball (“MLB”).  Part IV will discuss MLB’s salary arbitration rules and how the process actually works.  Part V will address prevailing criticisms of baseball style arbitration as it exists today—ultimately contending that it is a good system that consistently and effectively achieves its primary goal of settlement. Part VI briefly concludes.

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