It was Christmas 1975, and Santa Claus dressed up as Peter Seitz, an arbitrator called into action to settle an argument between the players and the owners. Seitz came down the chimney and left baseball a decision that would change the game forever.

The decision involved a couple of veterans fighting to survive in the majors: Dave McNally and Andy Messersmith. McNally was one of the game's premiere pitchers with the Orioles but was traded after the 1974 season. He retired after the decision. Messersmith had pitched for the Braves and felt underpaid, and he was probably right.   

Neither man benefited much from free agency, but they did challenge the rule and won in the courts.   

For almost a hundred years, baseball had operated under what they called "the reserve clause:"    

Until Peter Seitz came along, Major League Baseball interpreted the reserve clause to renew itself "for the period of one year" indefinitely, since even the renewed contract contained the clause. 

This effectively bound a player to a team until the front office decided otherwise. Once a player signed his first professional contract, he could not negotiate with another team until his original team let him go. This system gave teams little incentive to pay competitive wages, and so they didn't. 

In 1930, Babe Ruth signed a two-year contract with the New York Yankees for $80,000 per season (adjusted for inflation, the contract would be worth $1.1 million today). 

Ruth's salary was a record at the time and, in today's dollars, would remain so for more than forty years. 

Yes, in today's dollars, players like Ted Williams, Mickey Mantle, Hank Aaron, and Willie Mays were all paid less than Ruth in 1930.

The owners said that the "clause" provided payroll stability. The players said that it limited their ability to earn money and look out for their interests. 

Both sides were right. However, there is no question that major leaguers had zero negotiating options, other than sit out spring training like Don Drysdale and Sandy Koufax used to do.   

The rules were so arbitrary. Tony Oliva had to win three batting titles to earn $100,000, what they used to call "superstar status." Three batting titles to earn superstar money?

The real free agent class came after the 1976 season, when Reggie Jackson, Joe Rudi, Don Baylor and others negotiated their own contracts. Over time, Nolan Ryan became the first $1 million player, Rickey Henderson the first $3 million, Albert Belle the first $10 million and so on.

Where are we now on the 42nd anniversary of that fateful decision? The game is doing well and the players can't complain. At the same time, big payrolls have not necessarily bought pennants, as the Astros proved in 2017 and the Cubs and Indians showed with player development in 2016.

On the other hand, big payrolls have made the game too dependent on TV revenues. Baseball is not a good TV game and there is too much time between pitches, dragging out games over three hours!

Merry Christmas, baseball. I hope that every player remembers Curt Flood (the man who sat out a season to protest free agency) and the veterans like McNally and Messersmith who fought for what they enjoy now.

P.S. You can listen to my show (Canto Talk) and follow me on Twitter.