A 65-page decision issued on Dec. 23, 1975 by arbitrator Peter Seitz turned baseball-and eventually all major sports-on its head.
The Decision That Changed Baseball
A lawyer with expertise in labor relations struck down Major League Baseball’s reserve clause, which had bound players to their teams since the 1870s. The 65-page ruling, issued on Dec. 23, 1975, declared that the clause was unlawful. Seitz later compared baseball owners to “the French barons of the 12th century.”
Former pitcher David Cone reflected on the impact: “The real floodgates opened after that,” he said. “Players were finally in all walks of life, in all sports, were finally able to see what, hey, 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.”
At the time of the decision, the average MLB salary was $44,676. By this year, the average had risen to about $5 million-an increase of 112-fold. Outfielder Juan Soto commanded a record $765 million deal with the New York Mets last December. Adjusted for inflation, the 1975 average would be $260,909 in current dollars according to the Consumer Price Index.
Free Agency Takes Hold
The legal battle began with Curt Flood’s lawsuit in 1972. The U.S. Supreme Court upheld baseball’s antitrust exemption and ruled that only Congress could change the status quo. In December 1974, Catfish Hunter was set free on a technicality when Seitz concluded Oakland Athletics owner Charlie Finley had failed to make a $50,000 payment into a long-term annuity fund as specified in the pitcher’s contract. Hunter then signed a five-year contract with the New York Yankees for about $3.2 million.
Steve Rogers, one of the first beneficiaries of free agency and later a union official, recalled: “We saw this huge contract, it was like reading from another world,” he said. “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 negotiated in 1970 a provision that allowed grievances to be decided by an outside arbitrator. They wanted a case to test the provision in each contract that gave the team the right to renew for an additional year in perpetuity. The language in each player agreement stated the club could “renew this contract for the period of one year on the same terms,” except that the salary could be cut by as much as 20 %. After playing the 1975 season under renewals, Andy Messersmith of the Los Angeles Dodgers and Dave McNally of the Montreal Expos maintained in a grievance that the renewal period was one year only and they should be declared free.
The three-day hearing produced an 842-page transcript and 97 exhibits. Seitz urged owners to settle the case as late as Dec. 9. Then-commissioner Bowie Kuhn urged owners to fire Seitz before a decision, but the management’s Player Relations Committee refused because it feared bad publicity. Kuhn told the Associated Press: “I predicted the decision,” he said. “I was not surprised. I had people examine his record. I thought there was a tilt to the players’ side.”
The Ripple Effect Across Sports
Seitz’s decision was followed by free-agency upheavals in the NFL, NBA, NFL again, and European soccer. Current baseball players’ association head Tony Clark noted: “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.”
Seitz ruled in favor of the union. In his written decision he stated: “This decision strikes no blow emancipating players from claimed serfdom or involuntary servitude such as was alleged in the Flood Case,” and added that it “does not condemn the reserve system presently in force on constitutional or moral grounds.” He clarified that the ruling “does not counsel or require that the system be changed to suit the predilections or preferences of an arbitrator acting as a philosopher-king intent upon imposing his own personal brand of industrial justice on the parties. It does no more than seek to interpret and apply provisions that are in the agreements of the parties.”
Management fired Seitz that afternoon and vowed to overturn the decision in federal court. Miller, speaking to the AP in 2000-twelve years before his death-said: “Their basic attitude was, ‘We are not going to change one comma of the reserve system – we like it the way it is,'” he said. “They can say on a stack of Bibles that they should have changed something. But their basic mindset was, ‘This is the way it is.’ They thought they could never lose in court. That servitude had existed for decades and decades and decades.”
Seitz’s decision was upheld in February 1976 by U.S. District Judge John W. Oliver and affirmed the following month by an 8th U.S. Circuit Court of Appeals panel of Judges Floyd Robert Gibson, Gerald Heaney and Roy Laverne Stephenson.
On July 12, players and owners agreed to a four-year collective bargaining agreement creating one-time free agency for all players after 1976 or 1977 and going forward after six seasons of major-league service. That framework remains in place. Future Hall of Famers Reggie Jackson and Rollie Fingers were among the first players to benefit from the new system.
Moss, who died last year, said after a 25th-anniversary party in 2020: “The difference between winning and losing was billions and billions of dollars, maybe tens of billions of dollars.” Seitz himself died in 1983.
Legacy and Modern Implications
Baseball has endured nine work stoppages since 1972, and another could occur when the current labor contract expires at the end of Dec. 1 next year. Bud Selig, speaking in 2000, remarked: “I think one can make a case that we’ve spent the last two-plus decades trying to re-establish some reasonable equilibrium.”
The 1975 decision not only reshaped player salaries but also set a precedent that reverberated across professional sports, ultimately making thousands of athletes multimillionaires.
Key Takeaways
- The 65-page ruling by Peter Seitz in 1975 struck down MLB’s reserve clause, launching free agency.
- Player salaries grew from $44,676 to about $5 million, a 112-fold increase, and record deals like Juan Soto’s $765 million highlight the new era.
- The decision sparked similar changes in the NFL, NBA, and European soccer, demonstrating cross-sport synergy.
The transformation began with a legal challenge and culminated in a new economic reality for athletes across the United States and beyond.
