“A Renewal of Trust”
The Birth of the Continental Baseball Association, 1966
The rumblings of unrest among minority players were not a new phenomenon in 1965. The Union lawsuit was not a surprise to ABF owners. It was, in fact, anticipated and planned for. The Continental Baseball Association existed on paper almost five months prior to the General Fund trial.
The ABF owners knew what they were facing. It is a safe bet that all of them knew their manipulation of Fund money to keep white players happy in the wake of integration could lead to a lawsuit and an adverse ruling. Ironically, their misguided efforts to avoid a serious labor stoppage created the very thing they feared. And if they believed remuneration would be the only penalty, they would have been confident that their pockets were deep enough to pay for all “current discrepancies”. But when Judge Barnhardt’s ruling included punitive damages, with interest penalties, to retired players (who no longer had contracts in force and in the owners’ minds should not have been included as plaintiffs) the price tag far exceeded the amount in the Fund itself. The actual damages depleted their available working capital and made it impossible to pay for their current expenses (remember, Fund money was loaned at very low interest rates and payments were made at the discretion of the debtor teams – a very advantageous arrangement for someone borrowing millions of dollars). Owners were, in fact, deeply indebted – to each other. As a result, this circular debt imploded the ABF and many teams were facing bankruptcy, not to mention the staggering cost of future civil suits brought against them by minority players. Under these conditions, bankruptcy was almost desirable.
But owners understood these possibilities, even if they miscalculated their impact. The first bylaws of the Continental Baseball Association were written in July 1965 on a cloth napkin in the private dining room of the Plaza Hotel in New York City. The first bylaw? “No group of Teams working in Concert shall establish a Common Fund of money.”
Arranged by New York Admirals owner J. Walker Bowen, and attended by the wealthiest members of the ABF, this clandestine meeting discussed a new national baseball league, the creation of which would solve two significant problems facing the ABF: the Union’s questioning of the use of the General Fund, and the rancor surrounding expansion.
The use of the General Fund had been a topic of labor concern before, even among white players. The use of Fund money by individual teams to augment contract offers and pay bonuses had been under scrutiny for years. Its use had been challenged during the Players’ Strike of 1950, but only as leverage against their concerns about rundown facilities and the generally poor condition of other “usable assets” like locker rooms, road accommodations and transportation (buses and trains). It was never made a serious issue because, in the owners’ minds, players making far more than the average American worker did not want to complain too loudly about any system that could potentially pay them even more money.
Nonetheless, the owners felt this new generation of Union representatives was more sophisticated, more knowledgeable, and was not going to leave the Fund alone. They would push hard for greater access to its workings and the trail of monies transferred into and from it. Even if the Fund rules were rewritten, Bowen said, no one would trust that teams were following them. Not anymore. There was only one solution: eliminate the Fund altogether. He knew this would incite the smaller market teams to even greater efforts to expand the league, creating a longer schedule and more opportunities to earn revenue.
Owners had been sharply divided on expansion for several years. They knew more teams meant more fans, and this meant more money for everyone. But many owners were reticent to authorize more franchises because, to them, more teams meant more players and more players meant the average skill level would decline. A declining skill base was not the way to attract more fans, they argued, and more teams meant increases in travel and lodging costs, insurance, and payroll. The divide was very clearly marked; small market teams with limited budgets wanted a General Fund and expansion. Rich, older teams with plenty of cash wanted to eliminate the Fund and opposed expansion. Tellingly, when J. Walker Bowen invited owners to his secret meeting, he didn’t invite the small fish.
It should be mentioned at this point that in 1965 the ABF was also negotiating the largest media contract in professional sports history. Broadcast rights in the ‘30s and ‘40s were exclusively for radio. Radio, limited by the technology of time, was a regional endeavor. In 1933, when teams first started selling broadcast rights to radio stations, there was no National Radio Network. Contracts were smaller, more localized, built more by a handshake than by pages of legal documentation. The NRN didn’t come into the discussion until after WWII. Certainly, the money NRN provided helped smaller teams compete, but the amount was not enough to threaten the wealthier teams, and that was just the way the big teams wanted it.
But in 1958, the Columbia Broadcasting System negotiated a national contract with the ABF to televise, exclusively, selected ABF games throughout multiple markets, featuring matchups selected for their regional appeal. The Television Age was here, and the ABF was at its forefront. The CBS money was divided equally among the teams, and this helped the competitive balance (smaller market teams could afford more expensive players), but it also led to the manipulation of the Fund. There was no way to hide discriminatory bonus payments to players without the Fund.
The CBS deal was renewed in 1962 for three more years. The money was flowing in. Post-war America flocked to the national game as never before. The U.S. economy bloomed, and baseball profited. In 1965, the league was poised to enter the largest media contract in history, but before they could, the PBPA vs. ABF happened. Trust in the league was shattered, and with it the credibility of ABF ownership. Unwilling to partner with an entity being sued in federal court, CBS suspended the deal. Come back to us when this is over, they said.
In the event of an adverse ruling that included punitive damages, what could ABF owners do? During the discussion that day at the Plaza one thing was clear: if punitive damages were levied, the league would have to fold. To continue professional baseball, they were going to have to create a new league, a new entity not subject to civil suits from minority players. And, Boston Rovers owner Peter McMahon added, it would have to be ready to go the instant that ruling was issued.
Bowen declared that the new league had to be markedly different. It had to be more than just a new league. It had to be a “renewal of trust”. There could be no General Fund. He praised the Fund for shoring up franchises from the economic hardships experienced in the past but added that when it had outlived its usefulness it had been expediently manipulated. To win back fans, he said, CBA teams will have to survive on their own. That meant money.
The CBS deal, if it could be revived, meant lots of money. Enough, possibly, to prevent bankruptcy for the half-dozen teams facing financial ruin. That was good, Bowen said, but the league must also limit expansion only to financially stable teams, teams that could survive without a General Fund. The original CBA model used only the wealthiest twelve teams, but Bowen was willing to consider as many as 24 teams in the new league, including any bankrupted ABF team that had enough cash to survive and could restructure in time for the 1966 season. He tentatively identified fifteen additional successful teams from regional leagues to approach, should the CBA model move forward and some ABF teams fail. Some of those regional teams, like the Phoenix Ravens and New York Scouts, had courted the ABF for expansion for years.
When the Supreme Court upheld Judge Barnhardt’s ruling, the owners incorporated the CBA and the new league was born. When negotiations with CBS concluded a month later, a mere 48 days prior to the first scheduled preseason game, the influx of media money staved off bankruptcy for most of the other teams, but not all. Some teams were sold outright to new owners with the cash to revive the franchises, but ultimately all former ABF teams survived to join the new league, albeit not in their original incarnations. The Los Angeles Stars became the Legends, for example, and Texas became the Dallas Marshals. The San Francisco Prospectors became the Gulls.
The CBA in 1966 was made up of 24 teams, 20 that survived the demise of the ABF and 4 other franchises, mostly from the very successful Pacific League in the West. Several teams changed divisions in this restructuring. The CBA retained the ABF’s playoff model, but expanded it to eight teams, the six division winners and two Wild Cards – the second-place teams (one from each League) with the best record who would play the division winner with the most losses in the first round. The new franchises were the Phoenix Ravens, New York Scouts, Oakland Mammoths, and Seattle Lumberjacks.
The new league was here, and it was no coincidence that the CBA logo featured the same colors as the New York Admirals. J. Walker Bowen was its intellectual father. His renewal of trust had begun.