The Law of Tanking, Part Two

After part one of this series, many of you began debating whether, under Major League Rule 21(a), tanking — that is, deliberately conceding a season for the purposes of experiencing success in later seasons — was barred by the same Rule which bars deliberately losing a game. I’d like to address that matter here.

To refresh our memories, Rule 21(a) says this:

(a) MISCONDUCT IN PLAYING BASEBALL. Any player or person connected with a Club who shall promise or agree to lose, or to attempt to lose, or to fail to give his best efforts towards the winning of any baseball game with which he is or may be in any way concerned, or who shall intentionally lose or attempt to lose, or intentionally fail to give his best efforts towards the winning of any such baseball game, or who shall solicit or attempt to induce any player or person connected with a Club to lose or attempt to lose, or to fail to give his best efforts towards the winning of any baseball game with which such other player or person is or may be in any way concerned, or who, being solicited by any person, shall fail to inform the Commissioner (in the case of a player or person associated with a Major League Club) or the President of the Minor League Association (in the case of a player or person associated with an independent Minor League Club) immediately of such solicitation, and of all facts and circumstances connected therewith, shall be declared permanently ineligible.

To understand this in context, imagine (if you will) a scenario in which the 2018 Baltimore Orioles made a deal with the Devil at the All-Star break. As part of that deal, the Orioles agreed to voluntarily lose 90% of their games in the second half of the season. In exchange, Mephistopheles would agree to give the Orioles 95 wins and a playoff berth in 2021.

On the one hand, that would appear to violate the Rules, right? Indeed, we established last time that a team (including its front office, not just the players) can’t try to lose on purpose. On the other hand, this deal with the Devil isn’t all that different, practically speaking, from the efforts by a club to sell off assets at the trade deadline, is it? By trading Manny Machado, the Orioles made themselves deliberately worse — and less likely to win games in the second half — in hopes of winning in the future. But then, that can’t be right, because front offices don’t get barred from strip-mining their rosters in search of prospect gold.

The answer might be in how tanking differs from intentionally throwing a game. As attorney Mike Gilleran wrote for Santa Clara University School of Law,

[t]he process of “tanking” by a professional team in order to enhance its draft position presents an interesting ethical question. First, by tanking, I mean the situation where a professional team intentionally does not use its best available players in a contest. I am not saying that the players who actually participate in the game(s) give less than their best effort. I am saying that management and coaches make a decision that they will use relatively inferior players in a game, even though better players are healthy and available, and even though that course of action is more likely to result in a loss.

Characterized this way, a fire sale — where a front office forces its team to use inferior players in a game — becomes distinct from a scenario in which those same players refuse to put forth their best efforts. And Rule 21(a) does focus on “best efforts” repeatedly, making Gilleran’s explanation a plausible reading of the Rule. In his interpretation, Gilleran emphasizes that, while the front office’s actions make it more likely the team will lose, losing isn’t the primary goal of tanking. And that makes a certain amount of intuitive sense.

But at the same time, this answer is still unsatisfactory in certain circumstances, for two reasons. First, it doesn’t address the language in the Rule which utilizes the phrase “attempt to lose.” And second, what about preseason fire sales? You can argue persuasively that a midseason fire sale is acceptable because it allows for a scenario in which a club tried to win, failed, and then sold assets for players who would give their best efforts in future years. But if an organization strip-mines its roster before the season, is it tantamount to never trying to win at all?

I’m talking, in this case, about the erstwhile Florida Marlins. Miami’s new chief executive officer, Derek Jeter, said before the 2018 season that his administration planned to cut payroll because they couldn’t afford to pay it. That’s part of what led the MLBPA to file a grievance against the Marlins and three other teams earlier this year. As I noted then,

Derek Jeter responded to the grievance by pointing out that the Marlins have gone eight years without a winning record and haven’t made the playoffs since 2003. I’m not sure that argument helps here, though, given that last year’s Marlins won 77 games and had arguably the majors’ best outfield. Instead of building, the Fish have reportedly been trying to get their payroll to as low as $55 million and have pursued that goal with great vigor, trading Dee GordonMarcell OzunaGiancarlo StantonChristian Yelich, and others in what is — by one measure, at least — the biggest fire sale ever. The most fascinating aspect of this is that Rob Manfred and MLB may have been aware of the Marlins’ plan before approving the sale of the franchise.

MLBPA’s grievance was based on the Marlins’ allegedly improper use of revenue sharing money for purposes other than on-field improvements. But the MLBPA might have had an argument under Rule 21(a), as well. After all, the Marlins did make a concerted effort to worsen the team, and they evidently were open about doing so for financial purposes. And while some of this is armchair quarterbacking, the moves yielded underwhelming returns consistent with a team looking to slash payroll as quickly as possible rather than obtaining players for future wins. Lewis Brinson and Magneuris Sierra, the main pieces in their Ozuna and Yelich deals, haven’t hit at all. The centerpiece in the Stanton deal was Starlin Castro.

So, let’s assume that Jeter’s Marlins really did sell off assets primarily for financial reasons. Based on that, it’s entirely plausible to say that the Marlins’ front office violated Rule 21(a). Why? They intentionally failed to give their best efforts towards winning and arguably attempted to lose for financial purposes.

To look at it a different way, let’s start with the difference in payroll between 2017 and 2018. In 2017, the Marlins had a team payroll of $110,765,599. In 2018, it was $91,817,860. That’s a difference of $18,947,739. Now, assume that the Marlins sold off no players at all and, instead, received a check for $18,947,739 to not play Gordon, Ozuna, Stanton, and Yelich at all in 2018. That’s pretty clearly a violation of Rule 21(a), isn’t it? But the only difference between these two scenarios is that, in one, the Marlins are being paid to use replacement-level players instead of stars and, in the other, the Marlins are intentionally trading stars for subpar returns so as to realize a financial gain. In other words, the primary difference is whether or not the Fish receive the money in terms of savings or via a third-party payment, and third-party payments aren’t required for a violation of Rule 21(a).

But if the Marlins’ tanking isn’t permissible and the Orioles’ tanking is, where’s the line between them? Technically, after all, you could make a convincing case that both violate Rule 21(a), but nobody is ever punished for a deadline sell-off. Perhaps the difference can be found in the team’s motivation. Rule 21(a) uses a lot of words referring to what we might call mens rea or scienter — intent or knowledge of wrongdoing. If a team’s front office acts with the intent of winning more games in the future than they are losing now, that’s probably not a violation of Rule 21(a). The 2013 Astros, for example, acted with the intention of putting the best possible future team together. On the other hand, if a team acts for financial or other off-field considerations, that probably is a violation, because they are intentionally making the team worse without a legitimate baseball-related reason for doing so.

But while that may satisfy Rule 21(a), that’s not the only Rule which governs tanking. We’ll discuss the “integrity of the game” next time.

Sheryl Ring is a litigation attorney and General Counsel at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author's. This post is intended for informational purposes only and is not intended as legal advice.

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3 years ago

Seems to me that there’s been a serious lack of context in these posts. A quick google search shows that this rule was implemented (not surprisingly) after the Black Sox scandal. Those are the sorts of incidents that this rule was intended to prevent. It takes a LOT of imagination to try to apply this rule to something like tanking..

3 years ago
Reply to  emh1969

As I think about this a bit more, here are some serious issues with this piece:

1) Teams have been engaging in some form of tanking behavior for over 100 years. And MLB has done nothing in response. So clearly they don’t see tanking as a violation of this rule. And if they did all of a sudden start using this rule and banning executives from baseball for life, they’d be overturning a century of precedence. I think we can all agree that MLB isn’t going to do that.

2) In the recent Donaldson situation, teams complained to MLB about the trade. Could something like that happen here? Highly unlikely. For one thing, every team participates in and benefits from the “tanking system” to some degree or another. Secondly, getting an executive banned for life puts every other teams’ executives at risk, particularly since there no definition of what tanking is. So this isn’t happening either.

3) Could a fan of a tanking team file a grievance? I’m no legal expert but I’m pretty sure that fans have zero legal standing when it comes to the enforcement of baseball’s internal rules.

So even if it could be argued that this rule applies to tanking, there’s simply no way to get from here to there.

About the only plausible scenario that I could see would be something like say Derek Jeter receiving secret payments from the Yankees to keep them apprised of his trade talks. But I’m sure there are other rules that would cover that sort of action so you wouldn’t need to resort to this particular rule.

Dave T
3 years ago
Reply to  emh1969

Good points. To your last hypothetical about “something like say Derek Jeter receiving secret payments from the Yankees to keep them apprised of his trade talks”, I agree with you that there are multiple avenues of not only other MLB rules but also general law (and likely terms of an employment contract) that would apply to this situation. The Marlins would obviously fire Jeter in this hypothetical situation, but I think that would be the least of his problems.

IANAL, but I think that what you describe would violate criminal statutes regarding bribes and kickbacks. In other words, it could very well end up as something like the Chris Correa situation, where the executive lost his job, was convicted of a crime, and was also banned from baseball for life.

If an executive is high enough up to be an officer of a corporate entity (Jeter almost certainly is), there’s also the concept in corporate law of a “duty of loyalty” to a corporation, which this example clearly violates. That ought to be a civil matter, not criminal, but should be another basis for the Marlins to sue Jeter for restitution.

3 years ago
Reply to  Dave T

I assume in such a situation the Yankees’ executives would also be in legal trouble for knowingly providing payment to an executive of another team?

Dave T
3 years ago
Reply to  emh1969

Yes. Again IANAL, but pretty sure that they would also face the possibility of criminal trouble (plus whatever baseball does and presumably some chance of a civil lawsuit). It is generally a crime to pay a bribe or receive a bribe.

A bit of Googling tells me that apparently not every state has laws against commercial bribery (as opposed to bribing public officials), but about 35 do, including both New York and Florida. There’s no specific federal criminal statute addressing commercial bribery, but apparently it can be prosecuted at the federal level as wire fraud and/or mail fraud depending on the circumstances.

I think that almost all U.S. Attorneys and state D.A.’s would salivate at the publicity of a wire fraud or commercial bribery prosecution of a disgraced sports executive in your hypothetical situation.

Dave T
3 years ago
Reply to  emh1969

My reply said it was awaiting moderation for no reason that I can discern.

Short answer, again subject to my caveat that IANAL: yes, paying the bribe would be a crime as well as receiving it. Apparently, based on Googling the topic, federal wire fraud and/or mail fraud statutes would pick up this activity. The laws that specifically address commercial bribery are state laws in most, but not all, states.

3 years ago
Reply to  emh1969

Originalism sucks.