Twenty years ago this week, the seeds for baseball’s economic revolution were planted, first in a suite of law offices in New York City and then in a small town in rural North Carolina.
The financial landscape of the game changed forever when arbitrator Peter Seitz declared Catfish Hunter, the best pitcher in baseball, a free agent.
In the summer of 1974, Hunter was on his way to the Cy Young Award, pitching the Oakland A’s to their third straight world championship and working on a good-not-great $100,000 contract. It was a well-known fact among the A’s that they’d never get rich playing for penurious Charles O. Finley. Hunter, however, would change all that.
Hunter’s Oakland contract was exceedingly simple. He would be paid $50,000 by Finley. The other $50,000 was to be sent to a North Carolina bank in monthly payments on an insurance annuity. The pitcher’s paychecks arrived punctually. The annuity payments, however, did not.
Periodically, the bank sent out late notices and Hunter would confront Finley. Each time, he said he got the classic response. “Charley would say, ‘Oh yeah, the check’s in the mail.”’
They were not.
By season’s end, the A’s were in the American League playoffs, due in no small measure to Hunter’s 25-12 season and 2.49 ERA. Press reports were speculating on the broken contract and its possible implications when the pitcher was summoned to Finley’s office. Commissioner Bowie Kuhn was there as the owner reached into his desk drawer.
“Charley said, ‘Here’s the money.”’ Hunter said. For an instant, the pitcher reached for it. Then he stopped himself. “I told him, ‘I don’t want it that way. Pay the insurance like the contract read.’ ”
In New York, the annuity affair had caught the attention of Marvin Miller, executive director of the players’ association, and union attorney Dick Moss, who prepared to file a grievance.
“We saw this as an open and shut case, a real winner,” Miller said. “The contract language wasn’t even negotiated language. It was there before me, put in there by the owners and their lawyers. Any ambiguity would go against you in that circumstance. This language was clear cut.
“If there is a violation of the contract, the player has the right to send notice to the club, calling attention to the violation. Hunter did that. The club has 10 days to correct the violation. If the club does that, that’s the end of it. The Oakland club did not correct the violation.”
Miller viewed the arbitration as a cut-and-dried matter.
“One thing worried me,” he said. “The remedy was free agency. That was drastic. I thought it might be too drastic for an arbitrator.”
This, remember, was two years before players would be freed from the restrictions of the reserve clause that tied them to their clubs in perpetuity, unless traded, sold or released. Granting a player free agency, especially one at the zenith of his career, was revolutionary stuff.
Still, the union pressed ahead, hopeful that the arbitrator would rule according to the evidence and the letter of the contract. “He would either find a violation or he wouldn’t,” Miller said. “If he did, the remedy was right there in the contract.”
Arbitrator Seitz was a pipe-smoking lawyer, a labor veteran. He had served on the National Wage Stabilization Board and been both counsel and assistant to the director of the Federal Mediation and Conciliation Service. He also was director of industrial relations for the Defense Department. This was no rookie.
“My confidence grew as the hearing developed,” Miller said. “Seitz was a perceptive, acute man. It was clear he was not buying Finley’s story when Charley said he knew nothing about this and claimed he did not understand the deferred payments.”
During his cross-examination of Finley, Miller cornered the A’s owner. The union boss glanced over at the arbitrator and noticed him shake his head. “I knew then Seitz knew what he was hearing,” Miller said.
Ten days after the hearing, on Dec. 16, Seitz rendered his decision. “The grievance is upheld,” he wrote. There was, however, no mention of the remedy. Miller was alarmed. “I pointed it out to Seitz. He said it was understood. I asked that he include it in the opinion.”
For 15 nervous minutes, Seitz considered Miller’s request in a private office. Then he returned and agreed. The remedy would be spelled out in the opinion. There could be no question. Hunter was a free agent.
When the pitcher got word of the decision, he was a little shaken. “I hung up the phone, turned to my wife and said, ‘We don’t belong to anybody.’ I was scared. I didn’t have a job. I didn’t realize the implications.”
They would become clear in a hurry.
Hunter lived a farm in rural North Carolina. His contract negotiations would be handled by J. Carlton Cherry, a country lawyer whose offices were in nearby Ahoskie, N.C. This is not exactly a major metropolis, but if the barons of baseball were interested in signing the best pitcher in the game, that was where they would find him and that was where they would have to come.
One by one, they trumped through the law offices of Cherry, a peanut and tobacco lawyer, bearing offers. “Cherry didn’t know what he had,” Miller said. “He called me to say Finley had offered to forgive a loan and give Hunter a three-year guaranteed contract. He thought that was pretty good. As politely as I could, I explained that Hunter was the first free agent superstar. I told him, ‘You haven’t seen anything, yet.’ ”
And, indeed, he hadn’t.
Cleveland came through with a $2 million offer, stunning Hunter. It may have been Monopoly money, though, because the Indians rarely had many dollars to toss around in those days.
Kansas City’s bid included an offer to fly attorney Cherry’s daughter home from college in the midwest each weekend. A nice touch. Hunter recalled the Royals offering him $50,000 a year for the rest of his life. “What if I die?” he asked. “They said, ‘The contract is for you, not your wife and not your family.’ They were out of it after that.”
Watching all this was Peter Bavasi, general manager of the San Diego Padres. He had checked into the Tomahawk Motel -- there was no Hyatt and no Hilton in Ahoskie -- and plotted his strategy. His orders from owner Ray Kroc were simple: Bring back Hunter.
“Ray asked what I thought it would cost,” Bavasi said., “I told him Catfish made $100,000 the year before and from all indications, he wanted a long-term, guaranteed contract. I thought it would take $400,000.”
He was off. Quite a bit off.
Bavasi thought his best chance was to let other teams make their offers first. He got a late appointment and arrived in a new gray suit, purchased especially for the occasion.
Hunter, tiring of the talks, also showed up, dressed in hunting togs. “It was the last day of the hunting season,” Bavasi said. “He had his dogs in the truck, ready to go.”
As the conversations began, Hunter was chewing tobacco. At various intervals he would spit the juice into a Styrofoam cup.
Soon, the cup overflowed, right on to the sleeve of Bavasi’s new suit. The GM never wavered. The stakes were too high to be deterred by a little tobacco juice. He could clean the suit.
While Bavasi glanced furtively at the stain, Cherry, who by now knew what he had, presented Hunter’s demands. “He wanted a variety of things that added up to $3,750,000,” Bavasi said. “It was almost $4 million, a far cry from our $400,000.”
Cherry said, “Now, young man, does that scare you?”
“It sure doesn’t,” the GM said.
Others in the room, however, were shaken. Bavasi had brought along manager John McNamara and pitching coach Bill Poesdel, both old pals of Hunter’s. They slumped in their seats when they heard Cherry’s price.
Bavasi staged a strategic retreat, asking for a 90-minute recess. Back at the Tomahawk, Poesdel told the GM, “You’ll get us all fired.” Bavasi, though, was cool. “I didn’t say I would pay, I just said I wasn’t scared,” he replied.
Next, Bavasi called Kroc, who was on a cruise with his wife, Joan. A ship-to-shore line was established and through the static, Bavasi delivered the news.
“Mr. Kroc, there’s an offer on the table,” he said.
“How much will it cost?” Kroc answered.
Bavasi gulped and as the telephone line crackled, he said, “Four million.”
“That’s great,” Kroc said. “You brought it in right where you said. Four hundred thousand.”
“No, Mr. Kroc. The price is $4 million.”
When Joan Kroc heard her husband say that, it triggered what might best be described as a spirited domestic discussion. The bottom line was it was Kroc’s money and he’d spend however he chose. And at that moment, he chose to spend it on Catfish Hunter.
Bavasi had the go-ahead. He told Cherry the contract was acceptable and to start drafting the papers. The deal was done.
“And then,” Bavasi said dryly, “from Wilson, N.C., here comes Clyde Klutz.”
Klutz was an old catcher and longtime scout who had signed Hunter to his first contract. By 1974, he was working for the New York Yankees and he was dispatched by Gabe Paul, president of the club. His arrival meant trouble for the Padres.
“He was a key player,” Paul said. “He talked to Catfish and convinced him he’d be better off in New York.”
Yankee owner George Steinbrenner was under suspension at the time but Paul admits the boss was kept appraised of the Hunter negotiations. “Sure, I talked to George,” he said. “No parameters were set but as the talks went along, we knew we were in the ballgame.”
The Yankees were not scared off by Hunter’s demand and offered him $3.75 million. “The competition was so fierce,” Paul said, “We knew it would take that much.”
When Bavasi checked in with Cherry, he noticed a distinct reduction in enthusiasm. Finally, the lawyer told him, “Things have changed.”
As lawyers for both sides reviewed the deal line by line, it seemed nothing had changed. And then, Kroc’s attorneys said they wanted one more thing, for Hunter to serve as a spokesman for McDonald’s in the southeast.
“That’s impossible!” Cherry raged. “My client doesn’t smoke, drink or dissipate! We don’t have a deal!”
“Cherry seized the opportunity to get out,” Bavasi said. “Kroc went ballistic. I thought I would be fired. The lawyers understood what was going on, though.
“Gabe was a savvy old guy. He stayed in the weeds until the end and then he played his trump card with Klutz.”
On New Year’s Eve, the Yankees unveiled their prize pitcher. It was a defining moment in modern baseball history, a turning point in what would become an economic revolution.
The teams had been bidding blind, with no idea what the competition was offering. They were falling over each other, trying to sweeten the pot for Hunter. The price just kept on escalating.
Bavasi, now out of the game after running the Toronto and Cleveland franchises as well as the Padres, puts it this way:
“Isolate that signing and it tells you all you need to know about how baseball got in the mess it is in. All of this was created and sustained by the owners themselves. It was simply a complete lack of self-restraint.
“I saw Catfish Hunter with a Styrofoam cup in his hand. He didn’t have a gun to my head.”