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The Origin of the Reserve Clause

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  • E. Woodrow Eckard

    (University of Colorado at Denver)

Abstract

This article examines the creation of the first professional athletic labor market restriction over a century ago. In 1879, professional baseball club owners mutually agreed that each could reserve five players whom the others would not sign without permission, justifying the action by claiming that it was in the “public interest,†that is, necessary to preserve the game in the face of various alleged problems. Analysis of the relevant data reveals that these problems were either nonexistent or easily solved within the game’s existing rule structure. Given the lack of support for the public interest arguments proffered by owners, the more likely motive for the reserve rule was monopsonistic collusion.

Suggested Citation

  • E. Woodrow Eckard, 2001. "The Origin of the Reserve Clause," Journal of Sports Economics, , vol. 2(2), pages 113-130, May.
    • Handle: RePEc:sae:jospec:v:2:y:2001:i:2:p:113-130
    DOI: 10.1177/152700250100200202
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    References listed on IDEAS

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    1. Walter C. Neale, 1964. "The Peculiar Economics of Professional Sports," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(1), pages 1-14.
    2. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, June.
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    Cited by:

    1. James W. Meehan Jr. & Randy A. Nelson & Thomas V. Richardson, 2007. "Competitive Balance and Game Attendance in Major League Baseball," Journal of Sports Economics, , vol. 8(6), pages 563-580, December.
    2. Martin Schmidt, 2011. "Institutional Change and Factor Movement in Major League Baseball: An Examination of the Coase Theorem’s Invariance Principle," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 39(3), pages 187-205, November.
    3. Jennifer K. Ashcraft & Craig A. Depken, 2020. "The introduction of the reserve clause in Major League Baseball: evidence of its impact on select player salaries during the 1880s," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 14(1), pages 105-128, January.
    4. Eckard, E. Woodrow, 2005. "Team promotion in early major league baseball and the origin of the closed sports league," Explorations in Economic History, Elsevier, vol. 42(1), pages 122-152, January.
    5. E. Woodrow Eckard, 2001. "Baseball’s Blue Ribbon Economic Report," Journal of Sports Economics, , vol. 2(3), pages 213-227, August.
    6. Stefan Szymanski & Stephanie Leach, 2006. "Tilting the Playing Field (Why a sports league planner would choose less, not more, competitive balance): The case of English Football," Working Papers 0619, International Association of Sports Economists;North American Association of Sports Economists.
    7. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    8. Stefan Szymanski & Stephen F. Ross, 2007. "Governance And Vertical Integration In Team Sports," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 616-626, October.

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