Play Ball: MLB’s Gig Economy and Lessons for Other Employers
“The Dodgers are the Uber of baseball,” wrote Sports Illustrated’s Tom Verducci in the magazine’s February 11, 2019 issue. He meant that the Los Angeles Dodgers, who have represented the National League in the World Series the last two seasons, have achieved remarkable success by borrowing the idea of short-term contracts from the gig economy.
The gig economy has affected baseball teams and players in many of the same ways as it has American employers and workers. More jobs are available to more people albeit only part-time and possibly for lower wages. The Dodgers have nearly perfected the art of navigating the gig economy. For instance, during the 2017 and 2018 seasons, no Dodger started 140 games at the same position or pitched more than 175 innings while the Dodgers have employed at least 52 players at the major league level in each of the last four seasons.
The Dodgers’ shift to a gig economy approach has opened the doors to less experienced players and may mean less playing time for veteran players. The Collective Bargaining Agreement between MLB and the Major League Baseball Players Association drives this result to some extent. Players may not enter free agency until they have reached six years of service time in the big leagues. Moreover, aside from a few exceptions, players are not eligible to have their salaries determined through arbitration until they have achieved three years of service time. That means that MLB players are entitled only to the league’s minimum wage, which is $555,000 in 2019, for the first three years of their playing careers. The CBA also empowers the teams — rather than the players — to make the decisions to suppress service time, allowing teams to keep players through their prime years.
The lessons for a modern workplace appear to be that the gig economy approach allows for development of talent at a lower cost. It may, however, also mean that the veteran talent that a workforce needs is not there. Recall the Dodgers lost to the Astros in the World Series in 2017. Much was made of the new talent on both teams but a difference maker was the presence of Carlos Beltran on the Astros, a seasoned veteran upon whom many of those young players relied for advice. Bottom line is the gig economy can do a lot to promote development of talent, but don’t forget the veterans who can guide a company all the way to the ultimate goal. Also, it is great to see the veteran finally get the ring.
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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.