Did Mike Ilitch Accidentally Suggest Possibility of Collusion?

On Monday, the Detroit Tigers held a press conference to introduce their newest acquisition, Jordan Zimmermann. As has become customary on these occasions, Tigers’ owner Mike Ilitch attended the media session and fielded questions from reporters. Most of the attention following the press conference centered on Ilitch’s comments that he doesn’t “care about the money,” and instead simply “want[s] the best players.”

Of potentially greater significance, however, was a related statement Ilitch made in response to a question about whether he’d be willing to allow the Tigers’ payroll to surpass the $189 million luxury tax threshold:

“I’m supposed to be a good boy and not go over it,” Ilitch said, “but if I think there are certain players that could help us a lot, I’ll go over it. Oops, I shouldn’t have said that.”

Admittedly, there is probably nothing to this statement. Ilitch was likely just speaking casually, acknowledging that while the team’s payroll would ideally stay below the $189 million level, he could be willing to eclipse that mark for the right player.

At the same time, however, Ilitch’s choice of words was rather odd. By stating that he’s “supposed to be a good boy” and not exceed the luxury tax threshold, Ilitch’s statement would seem to suggest that he is under some sort of external pressure not to allow the team’s payroll to cross the $189 million mark. Along these lines, Ilitch then appears to quickly realize that he may have spoken a bit too loosely, leading to his “Oops, I shouldn’t have said that” line.

Again, there’s likely nothing to this. Ilitch was probably just suggesting that he’s under some form of self-imposed pressure not to exceed the luxury tax, before realizing that by acknowledging that he would be willing to cross the mark for the right player he may have undermined his team’s bargaining leverage in negotiations with other free agents.

But for the conspiracy theorists out there, Ilitch’s statement that he is “supposed to be a good boy and not go over” the luxury tax limit can also be interpreted as potentially suggesting that MLB owners have agreed in some manner – whether formally or informally – not to surpass the $189 million threshold.

Any sort of agreement along those lines would, of course, amount to collusion in violation of the league’s collective bargaining agreement. Article XX(E) of the CBA specifically states that “Clubs shall not act in concert with other Clubs” on any matter involving free agent signings. So if MLB is in fact somehow pressuring its clubs to keep their payrolls below the $189 million level, and the Major League Baseball Players Association can prove it, then the union would have the grounds for filing a successful grievance against the league. And if successful, the MLBPA could recover triple the amount of money that its members were wrongfully deprived due to MLB’s collusion.

This would admittedly be a difficult case to make. While it is true that very few teams have been willing to exceed the luxury tax threshold in recent years – with most of those that do go over the mark barely exceeding the $189 million threshold – this likely reflects nothing more than the increasingly punitive nature of the luxury tax, with MLB teams individually deciding that the cost of triggering the penalty isn’t worth the reward.

However, the fact that a few MLB teams have been willing to cross the luxury tax threshold in recent years would not, in and of itself, disprove collusion. Any agreement among two or more MLB teams not to surpass the $189 million payroll limit would violate the CBA, even if other teams refused to abide by the pact. During MLB’s infamous collusion in the 1980s, for instance, the leagues’ teams were found to have violated the CBA by agreeing not to sign each other’s free agent players, even though at least one team broke ranks by offering another team’s free agent a contract.

All in all, there probably isn’t anything to Ilitch’s comments. His statement most likely reflects nothing more than an excitable owner acknowledging that he’d personally prefer to keep his team’s payroll below the $189 million mark. But the fact that Ilitch’s rather peculiar choice of words could be read as signalling something more, along with the fact that so few MLB teams have been willing to exceed the luxury tax threshold in recent years, could give the MLBPA something to look in to, should it wish to do so.

Nathaniel Grow is an Associate Professor of Business Law and Ethics and the Yormark Family Director of the Sports Industry Workshop at Indiana University's Kelley School of Business. He is the author of Baseball on Trial: The Origin of Baseball's Antitrust Exemption, as well as a number of sports-related law review articles. You can follow him on Twitter @NathanielGrow. The views expressed are solely those of the author and do not express the views or opinions of Indiana University.

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8 years ago