Johnny Beazley & Baseball in Tennessee, Business of Baseball

Professional baseball is not merely a sport; it is also big business. How big? According to Forbes magazine, the 2013 gross revenues for Major League Baseball exceeded $8 billion. And the history of the business of baseball is also frequently a history of labor disputes between the players and team owners/the league. For example, the miserliness of Charles Comiskey (owner of the Chicago White Sox) and the low wages he paid his players are frequently cited as important motivating factors for several of his players' taking bribes to throw the 1919 World Series in the infamous Black Sox Scandal. The contracts within the Beazley collection offer a window into this side of baseball history.

In its 1946 report to the league, the Major League Steering Committee argued that one of the most vital factors in maintaining the economic health of Major League Baseball was preserving the "reserve clause." Dating back to 1879, the reserve clause was a section in every player's contract that effectively tied a player to a team in perpetuity (see paragraphs 8(a) and 8(b) in Beazley's 1942 contract). Player contracts covered only one season but when the contract ended, unless a team sold a player's contract to another team, the team reserved the rights to the player (hence the term "reserve clause"). This meant that the player could only negotiate his next contract with that team and could not enter into negotiations with any other team. Since players were not "free agents" and could not sell their services to the highest bidder among the other teams, the reserve clause kept player salaries artificially low. The reserve clause was challenged unsuccessfully in court several times, most notably in the 1972 U. S. Supreme Court case Flood v. Kuhn, before it was finally overturned in arbitration by the 1975 Seitz decision. In ending the reserve clause, the Seitz decision ushered in the current era of free agency and multi-year, multi-million-dollar contracts.

The Major League Steering Committee's 1946 report also stressed what the committee saw as the league's economic interests in preventing the players from unionizing. Attempts among baseball players to unionize began as early as 1885 with the creation of the Brotherhood of Professional Base Ball Players. The Brotherhood even created its own league, the Players' National League of Professional Base Ball Clubs, in an attempt to challenge the power of the National League's team owners, but the Players' League would only last for the 1890 season. The Brotherhood, itself, only survived until 1891 and, over the years, several other equally unsuccessful attempts at unionizing were made. It would take the advent of the Major League Baseball Players Association (MLBPA) for professional baseball players to finally successfully unionize. The MLBPA was founded in 1953 but was mostly ineffectual until it hired Marvin Miller of the United Steelworkers of America to be its executive director in 1966. Under Miller's leadership, the union negotiated the first collective bargaining agreement (CBA) with the league in 1968, and the 1970 CBA included a provision to use arbitration to resolve disputes.

While the Southern League was a minor league, the Federal League was a third major league that operated for only two seasons (1914-1915). Despite its brief existence, the impact of the Federal League on professional baseball is still felt to this day. In January 1915, the Federal League filed an antitrust lawsuit against the National and American Leagues, alleging that they had monopolized and conspired to monopolize the business of baseball. The suit was filed in the Northern District of Illinois in the court of Judge Kenesaw Mountain Landis (who would later become the first Commissioner of Baseball as a result of the Black Sox Scandal). Landis heard the case but delayed issuing a ruling in the hopes that the parties would reach an agreement. As the end of 1915 drew near with still no ruling by Landis, the dire financial situation of the Federal League forced it to cut a deal with the other leagues before it eventually folded. In the settlement that was reached, all but three of the Federal League team owners received some sort of compensation (either being bought out or being allowed to buy teams in the other leagues). The publicly owned team in Baltimore was one of the three teams that received nothing.

So, in 1916, the Baltimore team filed an antitrust suit against the National and American Leagues — and other Federal League team owners — for conspiring to monopolize baseball. The case went all the way to the U. S. Supreme Court. In 1922, the court issued their ruling in Federal Baseball Club v. National League, which stated that baseball games were not a form of interstate commerce and that, therefore, major league baseball was exempt from the Sherman Antitrust Act (the 1890 Federal law used to break up monopolies such as Standard Oil). While subsequent lawsuits have curtailed portions of baseball's antitrust exemption, the exemption has never been entirely removed.

The other lasting legacy of the Federal League is Wrigley Field. Now the home of the Chicago Cubs, Wrigley Field was originally built in 1914 to be the home of the Federal League's Chicago Whales.