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How MLB Profits From Players with Addictions

Unlike other professional leagues, the salaries of suspended players in MLB go right back to ownership. History shows why this is a terrible idea.

by Jack Moore
Mar 17 2015, 1:42pm

Kevin Jairaj-USA TODAY Sports

Josh Hamilton is scheduled to make $23 million from the Los Angeles Angels this season. He also may be disciplined by Major League Baseball for his recent cocaine relapse. These things shouldn't be related, any more than a diabetic person's salary should be related to forgetting to take an insulin shot.

Only that's now how things work—or, at the very least, can work—within baseball.

After a single, ill-advised night in a strip club over Super Bowl weekend, Hamilton faces a suspension of up to one year. If that happens, Angels owner Arte Moreno could find himself $23 million richer than he expected. See the potential problem? As currently constructed, MLB's drug policy—whether for performance-enhancers like steroids or recreational drugs like cocaine or marijuana—places the salaries of suspended players right back in the pocketbooks of their employers. This is almost certainly why, as Jeff Passan noted this week, Moreno has yet to comment publicly on his aging former star's case. Hamilton turns 34 in May and managed just a .745 OPS and 10 home runs in 89 games last year. He does not project to be worth anywhere near $23 million.

Read More: Your Poor Baseball Team Owner Is Lying To You

For Moreno, the math could be pretty simple.

This is a conflict of interest. Plain and simple. Moreno probably isn't a terrible guy. He almost certainly has a genuine interest in looking out for the health and well-being of his employees. On the other hand, $23 million is $23 million. MLB's drug policy gives owners a direct monetary incentive to snitch on their players the moment they stop producing at the level their fully-guaranteed contracts call for. While the policy has protections in place for players who are first-time offenders, those who are eligible for suspensions become vulnerable. On the flip side of the coin, players with drug addictions—a serious health issue that requires treatment, support and patience, and often means multiple relapses—also have a skewed incentive to hide their problems and avoid help.

Image via Robert Hanashiro-USA TODAY Sports

Hamilton self-reported his relapse. Doing so was smart, reasonable, and could cost him a year's pay. What kind of message does that send to other players struggling with sobriety?

Again, none of this is necessarily a problem, provided everyone involved does the right thing. Only that doesn't always happen. Conflicts of interest are frowned upon for a reason. Consider the case of former New York Yankees owner George Steinbrenner and slugger Dave Winfield. Infuriated by Winfield's lack of playoff production, $23 million contract, and ability to veto any trade, a desperate Steinbrenner famously turned to Howard Spira—an even more desperate man with massive gambling debts—to dig up dirt on Winfield and his charitable foundation.

The goal? Find something that could be used to void Winfield's contract. Oh, and perhaps sue his charity, too.

Steinbrenner's behavior was extremely vindictive—and frankly, a bit nuts—but it illustrates how far an owner can be willing to go to recoup money on an unfortunate contract. If an owner has a way out, he'll be tempted to use it. Even if someone like Moreno isn't actively sabotaging players, MLB's drug policy gives him little incentive to protect anyone.

Not coincidentally, this is exactly why the Major League Baseball Player's Association fought so hard against mandatory drug testing in the 1980s.

Image via The Star-Ledger-USA TODAY Sports

Let's go back in time. Like most other sports and the country as a whole, baseball was overwhelmed by cocaine. In 1985, four Kansas City Royals players were jailed for cocaine use and possession after super fan and team hookup Mark Liebl snitched. In a prison interview with MLB commissioner Bowie Kuhn, Liebl claimed he used cocaine with players from as many as five teams and said, "[Cocaine is] all over baseball." That same year also marked the beginning of the Pittsburgh cocaine trials, which led to six Pirates players being called before a grand jury and the eventual suspension of 11 major leaguers.

Peter Ueberroth took over as MLB commissioner in 1985. Caught up in the Just Say No moral panic of the era, he announced that eradicating drugs from baseball would be one of his top priorities. During a Game of the Week telecast in 1985, Ueberroth said the original 1984 drug agreement between the union and the league was unacceptable precisely because it lacked mandatory random testing. Prior to the 1986 season, Ueberroth told reporters at a press conference, "Baseball is going to, this year, put on the field of play a virtually drug-free sport. We will flat get rid of it."

According to Marvin Miller's autobiography A Whole Different Ball Game, Ueberroth also sent players a letter urging them to submit to "totally confidential" drug testing during the season, free of penalties. He knew the union had the power to reject mandatory drug testing and was willing to use it, but kept probing for a way around it. He met with Don Fehr, Miller's successor at the helm of the players union, and asked if the union head would agree to drug testing, "even if it was just for the sake of public relations." Fehr asked, "Whose PR?" and the issue of mandatory testing was quickly dropped.

Still, with the ammunition provided by the Pittsburgh cocaine trials, Ueberroth was able to discipline multiple players. Red Sox co-owner Haywood Sullivan gave his support for the suspensions to the Associated Press, saying "without fear, nothing works. I think this is a good decision, a positive step in the right direction." Ueberroth said his comments on eradicating steroids to the game was in part "a self-fulfilling prophecy," and the culture of fear created through the suspensions was a huge part of it.

Charitable interpretation? The owners were pushing for a drug program in order to keep players—and the game's image—safe, and felt "NARC"-style deterrence was the answer. Uncharitable interpretation? The owners didn't give a damn about players with health problems, and simply wanted another avenue of control over their employees.

Without pushback from the union, cocaine and other drug offenses in baseball likely would have been treated as we've seen steroid offenses treated in the 21st century: with heavy suspensions, or even bans for early offenses. Red Sox owner Sullivan suggested many wanted the players involved in the Pittsburgh trials banned from the game. Steinbrenner told the AP, "If they don't praise the Lord for this second chance, they don't deserve to be in the sport of baseball and held up as heroes by young Americans."

Intentional or not, MLB's steroid policy has been a massive money-saver for owners. In the Biogenesis case alone, $31 million in salaries were saved by teams. MLB even went so far as to threaten Alex Rodriguez with a lifetime suspension from the game, which would have saved the Yankees at least another $60 million on top of the $22 million the club retained in 2014—all before potential eight-figure luxury tax savings are accounted for. While suspensions without pay are far easier to justify for performance-enhancing drugs than they are for drugs of abuse, MLB and the Yankees attempted to go above and beyond the joint drug agreement in an attempt to bilk Rodriguez out of money he's contractually-owed.

MLB needs to fix its incentives. It shouldn't be hard. Just look at what the rest of the major sports leagues do with their suspension and fine money. Section 6 of Article VI of the NBA's collective bargaining agreement lays out a policy in which all fines and pay lost through suspensions are channeled to charity, with one half going to charities selected by the NBA Players Association and the other half going to charities selected by the league. The NHL directs its player fines to the Players' Emergency Assistance Fund, with a mission to help former NHL players who have fallen into poor health or dire financial straits. Similarly, all NFL on-field fines go to the NFL Player Care Foundation.

As for how things work in baseball? After 60 days in the drug program—according to the Los Angeles Times, it's unclear if Hamilton exhausted these 60 days during his time with the Devil Rays in the early 2000s or not—a player is no longer entitled to salary retention even if he is in treatment. As such, a year-long suspension for Hamilton would save the Angels anywhere from just under $17 million to the full $23 million if MLB determines his treatment days have already been used up.

Baseball contracts are fully guaranteed. Owners are prepared to pay player salaries if the player is unable to play out his contract due to injury. They have signed these contracts, we assume, because they can afford them, and with baseball setting multibillion-dollar revenue records on a yearly basis, crying poor shouldn't work. If the owners believe these suspensions and fines are necessary to keep the players drug-free, they should put their money where their mouth is. Prove they aren't becoming narcs just to recoup some paychecks they think they'll regret. Prove this drug program isn't just about saving money and saving face.

If owners were at least forced to invest suspension money in charity, the conflict of interest surrounding cases like that of Moreno and Hamilton would disappear.

In the meantime, it's possible the MLBPA will win a ruling preventing MLB commissioner Rob Manfred from disciplining Hamilton. It's also possible that Manfred will choose to be lenient given Hamilton's self-reporting of the relapse. Good will and good intentions can still carry the day. Only history shows they're seldom sufficient. Manfred's decision will be an important one for baseball's drug policy. If Hamilton is suspended and his salary returns to Moreno's coffers, the message will be clear: MLB's players, no matter how much help they may need, cannot expect it from their employers.

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