It seems as if everyone has something to say about the salaries in baseball: newscasters, congressmen, Johnny Carson, Penthouse, even political columnists. Why should anyone, they say, who hits a ball with a stick around a grass field earn more than the president of the United States? College graduates ought to pass up law, medicine, and business, and head for the baseball diamond. With all due respect to the fans, commentators, columnists, and owners who utter cries of indignation at those fat contracts and predict the demise of the game, there are a number of justifications for the players' present bargaining position.

While accounts of the lucrative salaries abound, few of these examine the background of the issue or consider the possible justification for such remunerations. The issue, of course, is the reserve clause, a term that has been bandied about on the sports pages with nearly the same frequency as Watergate has on the news pages. Similar to the name of that famous Washington building, the phrase "reserve clause" has been so overshadowed by subsequent events that no one remembers its actual meaning.

The reserve clause is a term used to define the set of provisions pertaining to player retention. The baseball player reservation the set of provisions pertaining to player retention. The baseball player reservation system, established in 1879, granted to the team with which an athlete first signs, the exclusive perpetual rights to that player's services for his playing lifetime through the mechanism of automatic contract renewal. If the player was traded or sold, these rights were transferred with the contract. From the moment an amateur baseball player signed a contract, he relinquished all rights to control his location of employ and agreed to negotiate only with his assigned club. This was the framework for baseball's reserve system, which remained in effect until December 1975.

In 1922, the Supreme Court freed major league baseball from charges of illegal anti-competitive practices by granting the sport an exemption from the antitrust laws. Since that ruling, the legality of the perpetual reserve system has been the subject of constant court cases.

In 1949, Judge T.S. Frank of the N.Y. District Court issued an electrifying opinion in the case of Danny Gardella v. Commissioner of Baseball Chandler:

the reserve clause results in something resembling peonage of the baseball player...it is shockingly repugnant to moral principles that, at least since the War Between the States, have been basic in America.

This opinion struck the core of all subsequent reserve system disputes. Regardless of whether baseball depends on the reserve clause for its existence, and even if baseball players receive substantial wages, should the courts condone their exploitation and the infringement of their right to offer their services on the open market? Organized baseball, frightened by the prospect of legal defeat, offered the plaintiff $60,000 to settle out of court. Gardella dropped the charges, and the reserve rules remained unaltered.

The issue was brought to public attention again in the Curt Flood case. Flood, a star outfielder for the St. Louis Cardinals, challenged the right of that team to trade him against his wishes. The Supreme Court voted 5-3 in favour of the owners, on the grounds that if the reserve clause was an anti-competitive measure, it was up to Congress to legislate the inclusion of professional baseball under the Sherman Antitrust Act.

Finally, in 1975, the perpetual reserve clause was abolished by baseball arbitrator Peter Seitz. He ruled that Andy Messersmith and Dave McNally were no longer bound to their respective teams upon termination of their contract plus one additional renewal year. After that year, the players became free agents, able to offer their skills to the highest bidder. Seitz declared that the Uniform Players Contract did not grant a club a perennial option to an athlete's services. It is no wonder that this sweeping judgement, which obliterated the binding labor rules that had persisted for nearly one hundred years, thrust the major leagues into an unprecedented uproar.

Since the 1920s, owners have arduously maintained that the reserve clause was necessary to insure an equal distribution of skill among teams. Otherwise, they argued, the big-city clubs, who can profit more from fielding a winner, would hoard all the talent. The player retention system protected player assets of all franchises in the league.

However, one look at a list of pennant winners through this century reveals anything but an equal division of league titles. Between 1900 and 1960 the New York Yankees totally dominated the American League, carrying home for 25 pennants. Obviously, the reserve clause was not fulfilling its expected function.

Restrictive labor rules could not balance relative team strengths because players still ended up working for the club for whom they were most valuable, with or without the reserve clause. Although an athlete could not offer his services to the highest bidder, one team would bargain with another to purchase a player's contract. Today negotiations take place directly with the ballplayer in question, allowing him to accrue the fruits of his labor rather than the employer.

The return to investment in player skills varies widely among teams, depending on a number of factors, including market size and intensity of fan loyalty. Clubs blessed with large potential audiences, like Los Angeles and New York, or diehard fans, like Boston, generally find it more advantageous to secure a stronger squad than their competitors, reserve clause or not.

Essentially, the effect of a prohibitive labor market was not to evenly distribute skill, but to lower salaries. If a player wanted to remain in the profession, he had no alternative but to work at the salary offered him from the franchise possessing his contract. If he was not satisfied, well, he could sell used cars.

In the wake of the Seitz ruling, the roles have been reversed. Upon termination of his contract, a player can renegotiate for a new pact or decide to become a free agent, potentially available to every franchise. This past year, 26 major league players became free agents, including such celebrities as Reggie Jackson, Sal Bando, and Bobby Grich. During the frenzied bidding war most major newspapers ran front page stories on the latest developments, following the bargaining sessions as closely as the Paris Peace Talks. Daily, the media announced the most lucrative contract offer ever made in the sport, only to be surpassed the very next day.